Aim Variable Insurance Funds N-CSR Certified annual shareholder report (management investment company)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-07452

AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

(Exact name of registrant as specified in charter)

11 Greenway Plaza, Suite 2500 Houston, Texas 77046

(Address of principal executive offices) (Zip code)

Philip A. Taylor 11 Greenway Plaza, Suite 2500 Houston, Texas 77046

(Name and address of agent for service)

Registrant’s telephone number, including area code: (713) 626-1919

Date of fiscal year end: 12/31

Date of reporting period: 12/31/10

Item 1. Reports to Stockholders.

Invesco V.I. Basic Balanced Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VIBBA-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the 12 months ended December 31, 2010, Invesco V.I. Basic Balanced Fund underperformed its broad market and style-specific indexes. Because the Fund uses a bottom-up stock selection approach, stock selection in various sectors was the primary driver of the Fund’s relative performance.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	8.06	%
Series II Shares	7.77
S&P 500 Index▼ (Broad Market Index)	15.08
Custom Basic Balanced Index§ (Style-Specific Index)	12.39
Lipper VUF Mixed-Asset Target Allocation Moderate Funds Index▼ (Peer Group Index)	11.58

^▼Lipper Inc.; ^■Invesco, Lipper Inc.

How we invest

We call our investment philosophy “value with a catalyst.” We believe that undervalued companies which are experiencing positive changes (i.e., “catalysts”) have the potential to generate long-term stock price growth for shareholders. We generally seek to identify companies that are out of favor with investors, underearning relative to their potential and attractively valued. For these companies, we attempt to identify catalysts that may improve the financial results and/or correct the undervaluation. Examples of catalysts typically include improved operational efficiency, changing industry dynamics and/or a change in management.

     We initially identify potential investments through a series of quantitative screens including, but not limited to, return on capital and enterprise value to sales metrics. We then conduct fundamental research on the most attractive opportunities. The research process includes a thorough review of a company’s financial statements, an evaluation

of its competitive position and stability and meetings with its executives. During the research process, we also value the company under various scenarios to determine if the investment is an attractive opportunity relative to its risks. This is also where we typically identify the positive catalyst, a pre-requisite for potential investment. Finally, we generally set a price target for a stock based on normalized earnings and historical valuation multiples.

     In short, our objective is to exploit negative sentiment toward a company’s stock by analyzing the company’s operations in the context of a cyclical environment and identifying one or more catalysts that may improve the company’s financial performance. Improved financial performance, in turn, has the potential to drive the company’s stock price higher.

     We typically sell an investment when it reaches our estimate of fair value or when we identify a more attractive investment opportunity.

     The Fund also invests in investment grade corporate bonds and U.S.

government-issued bonds. The fixed income portion of the portfolio has the potential to reduce volatility compared to an equity-only portfolio and the potential to provide some downside protection during periods of stock market volatility.

Market conditions and your Fund

Equity markets were choppy during the fiscal year as investors weighed the competing issues of solid corporate profits and soft macroeconomic data. Corporate earnings were largely positive but often were overshadowed by concerns about high unemployment, weak consumer spending, soft housing data and the possibility of additional U.S. Federal Reserve accommodation. After rising through April, major equity indexes sold off precipitously in May as the sovereign debt crisis unfolded in the eurozone while U.S. economic indicators remained weak, prompting fears of a “double-dip” recession. Uncertainty created by the debt crisis – combined with subdued employment, consumer spending and housing data – added to concerns that the recovery was slowing. Just as abruptly, however, the markets reversed course starting in September and rallied through the end of the year on modestly better economic news.

     Major equity indexes produced positive returns for the fiscal year, and all 10 sectors of the S&P 500 Index posted gains. More economically sensitive sectors such as consumer discretionary and industrials had the highest returns, while less economically sensitive sectors such as health care had some of the lowest returns.

     The broad U.S. bond market, as measured by the Barclays Capital U.S. Aggregate Index, generated positive total returns for the 12 months ended December 31, 2010. At the beginning of the year, falling interest rates across maturities combined with tighter credit spreads (the difference between the yields of U.S. Treasuries and other types of fixed income securities that carry credit risk) caused bond prices to rise. Conversely, during the fourth quarter, a marked rise in interest rates negatively affected bond prices, particularly U.S. Treasuries.

     Stock selection in the health care sector contributed to the Fund’s relative performance. The Fund owned Genzyme, a biotechnology company that received a takeover offer from Sanofi-aventis (not a Fund holding). As a result, Genzyme rose significantly on the news and we sold our position.

Portfolio Composition

By security type, based on net assets

Common Stocks & Other Equity Interests	69.6	%
Bonds & Notes	10.9
U.S. Treasury Securities	8.1
U.S. Government Sponsored
Mortgage-Backed Securities	2.5
U.S. Government Sponsored
Agency Securities	0.4
Asset-Backed Securities	0.2
Money Market Funds
Plus Other Assets Less Liabilities	8.3

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.

Invesco V.I. Basic Balanced Fund

Top 10 Equity Holdings*

1.	JPMorgan Chase & Co.	3.3	%
2.	General Electric Co.	2.7
3.	Marsh & McLennan Cos., Inc.	2.4
4.	Viacom Inc.-Class B	2.0
5.	Occidental Petroleum Corp.	1.8
6.	Anadarko Petroleum Corp.	1.6
7.	eBay Inc.	1.6
8.	American Electric Power Co., Inc.	1.4
9.	Tyco International Ltd.	1.4
10.	Royal Dutch Shell PLC-ADR	1.4

Total Net Assets	$31.3 million
Total Number of Holdings*	192

     The utilities sector was also a positive contributor. The Fund was underweight this sector versus its benchmark index and we avoided many deregulated utility companies, which performed poorly.

     Offsetting these positive results was the negative impact of the information technology (IT) and financials sectors.

     The Fund was overweight in technology stocks throughout the reporting period, and most of our exposure was to hardware and equipment and software services stocks. Stock selection in hardware and equipment detracted the most from relative performance. Fund holding Hewlett Packard sold off on the news its chief executive officer was leaving the company due to expense-related improprieties. At the end of the reporting period, the Fund continued to own the stock.

     Although the Fund was underweight in the financials sector relative to its style-specific index during the reporting period, we cautiously increased our exposure to some banks and capital markets companies that we believed had improved their balance sheets and were better capitalized. Also, real estate was a strong performing asset class during the reporting period. The Fund had no exposure to this asset class, however, and therefore did not benefit from real estate’s strong performance.

     The Fund’s fixed income holdings produced positive returns for the reporting period, despite a marked rise in interest rates late in the year that caused bond prices to fall. Fixed income performance was mainly due to a sustained overweight position in investment grade corporate bonds. A consistent underweight position in U.S. government securities also aided both the Fund’s absolute and relative performance as investor preference for credit risk and rising interest rates late in the year dampened returns for U.S. government bonds.

     The Fund used active duration and yield curve positioning to manage risk and generate outperformance versus its benchmark index. U.S. Treasury futures were the main tool used in managing the portfolio’s duration. The contribution to relative performance from both duration and yield curve positioning was, overall, negligible for the fiscal year.

     Equity markets experienced a strong recovery during the period covered by this report. We believe that the market volatility that occurred during 2010 will continue to create opportunities to invest in companies with attractive valuations

and strong fundamentals. We believe that ultimately those valuations and fundamentals may be reflected in those companies’ stock prices.

     As always, we would like to caution investors against making investment decisions based on short-term performance. We recommend that you consult a financial adviser to discuss your individual financial program.

     Thank you for your investment in Invesco V.I. Basic Balanced Fund and for sharing our long-term investment horizon.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Thomas Bastian

Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Basic Balanced Fund. He joined Invesco in 2010. Mr. Bastian earned a B.A. in accounting from St. John’s University and an M.B.A. in finance from the University of Michigan.

Cynthia Brien

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Basic Balanced Fund. She joined Invesco in 1996. Ms. Brien earned a B.B.A. from The University of Texas at Austin.

Chuck Burge

Portfolio manager, is manager of Invesco V.I. Basic Balanced Fund. He joined Invesco in 2002. Mr. Burge earned a B.S. in economics from Texas A&M University and an M.B.A. in finance and accounting from Rice University.

John Craddock

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Basic Balanced Fund. He joined Invesco in 1999. Mr. Craddock earned a B.S. with honors in mechanical engineering from Clemson University and an M.B.A. from Georgia Tech’s Dupree School of Management with a concentration in finance.

Mark Laskin

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Basic Balanced Fund. He joined Invesco in 2010. Mr. Laskin earned a B.A. in history from Swarthmore College and an M.B.A. and an M.A. from the Wharton School and the Lauder Institute, respectively, of the University of Pennsylvania.

Mary Jayne Maly

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Basic Balanced Fund. She joined Invesco in 2010. Ms. Maly earned a B.A. from the University of Pittsburgh and an M.B.A. from the American Graduate School of International Management.

Sergio Marcheli

Portfolio manager, is manager of Invesco V.I. Basic Balanced Fund. He joined Invesco in 2010. Mr. Marcheli earned a B.B.A. from the University of Houston and an M.B.A. from the University of St. Thomas.

James Roeder

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Basic Balanced Fund. He joined Invesco in 2010. Mr. Roeder earned a B.S. in accounting from Clemson University and an M.B.A. in economics and finance from the University of Chicago Graduate School of Business. He is also a Certified Public Accountant.

Invesco V.I. Basic Balanced Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception

Index data from 4/30/98, Fund data from 5/1/98

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (5/1/98)	1.84	%
10 Years	-0.25
5 Years	0.16
1 Year	8.06
Series II Shares
10 Years	-0.50	%
5 Years	-0.09
1 Year	7.77

Series II shares incepted on January 24, 2002. Performance shown prior to that date is that of Series I shares, restated to reflect the higher 12b-1 fees applicable to Series II. Series I performance reflects any applicable fee waivers or expense reimbursements. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial

adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.92% and 1.17%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.51% and 1.76%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Basic Balanced Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing

variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2012. See current prospectus for more information.

Invesco V.I. Basic Balanced Fund

Invesco V.I. Basic Balanced Fund’s investment objective is long-term growth of capital and, secondarily, current income.

n Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.

n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

     Interest rate risk refers to the risk that bond prices generally fall as interest rates rise; conversely, bond prices generally rise as interest rates fall. Specific bonds differ in their sensitivity to changes in interest rates depending on their individual characteristics, including duration.

     The Fund’s foreign investments may be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

     Value stocks can react differently to issuer, political, market and economic developments than the market as a whole and other types of stocks. Value stocks can continue to be undervalued for long periods of time and may not ever realize their full value. Value stocks tend to be currently out of favor with many investors.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Custom Basic Balanced Index, created by Invesco to serve as a benchmark for Invesco Basic Balanced Fund, is composed of the following indexes: Russell 1000^® Value (60%) and Barclays Capital U.S. Aggregate (40%). The Russell 1000 Value Index is a trademark/ service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Lipper VUF Mixed-Asset Target Allocation Moderate Funds Index is an unmanaged index considered representative of mixed-asset target allocation moderate variable insurance underlying funds tracked by Lipper.

     The Barclays Capital U.S. Aggregate Index is an unmanaged index considered representative of the U.S. investment-grade, fixed-rate bond market.

     The Russell 1000^® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     CPA^® and Certified Public Accountant^® are trademarks owned by the American Institute of Certified Public Accountants.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Basic Balanced Fund

rSchedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–69.61%
Air Freight & Logistics–0.37%
FedEx Corp.		1,249	$	116,169
Asset Management & Custody Banks–0.77%
State Street Corp.		5,182		240,134
Automobile Manufacturers–1.16%
Ford Motor Co.(b)		11,776		197,719
General Motors Co.(b)		4,514		166,386
				364,105
Cable & Satellite–2.24%
Comcast Corp.,–Class A		18,096		397,569
Time Warner Cable Inc.		4,563		301,295
				698,864
Communications Equipment–0.73%
Cisco Systems, Inc.(b)		11,294		228,478
Computer Hardware–1.94%
Dell Inc.(b)		19,922		269,943
Hewlett-Packard Co.		8,029		338,021
				607,964
Consumer Electronics–0.82%
Sony Corp.–ADR (Japan)		7,206		257,326
Data Processing & Outsourced Services–0.77%
Western Union Co. (The)		12,905		239,646
Diversified Banks–1.16%
US Bancorp		5,416		146,070
Wells Fargo & Co.		6,999		216,899
				362,969
Diversified Chemicals–1.34%
Dow Chemical Co. (The)		6,035		206,035
PPG Industries, Inc.		2,540		213,538
				419,573
Diversified Support Services–0.39%
Cintas Corp.		4,313		120,591
Drug Retail–1.05%
Walgreen Co.		8,400		327,264
Electric Utilities–2.82%
American Electric Power Co., Inc.		12,527		450,722
Edison International		3,628		140,041
Entergy Corp.		1,916		135,710
FirstEnergy Corp.		4,218		156,150
				882,623
Food Distributors–0.65%
Sysco Corp.		6,927		203,654
Health Care Distributors–0.48%
Cardinal Health, Inc.		3,921		150,213
Health Care Equipment–0.89%
Covidien PLC (Ireland)		6,082		277,704
Home Improvement Retail–1.00%
Home Depot, Inc. (The)		8,930		313,086
Household Products–1.32%
Procter & Gamble Co. (The)		6,431		413,706
Human Resource & Employment Services–0.86%
Manpower Inc.		2,424		152,130
Robert Half International, Inc.		3,807		116,494
				268,624
Hypermarkets & Super Centers–0.69%
Wal-Mart Stores, Inc.		4,025		217,068
Industrial Conglomerates–4.14%
General Electric Co.		46,241		845,748
Tyco International Ltd.		10,835		449,002
				1,294,750
Industrial Machinery–1.19%
Dover Corp.		1,995		116,608
Ingersoll-Rand PLC (Ireland)		5,391		253,862
				370,470
Insurance Brokers–2.36%
Marsh & McLennan Cos., Inc.		27,018		738,672
Integrated Oil & Gas–5.80%
ConocoPhillips		2,559		174,268
Exxon Mobil Corp.		3,241		236,982
Hess Corp.		4,965		380,021
Occidental Petroleum Corp.		5,874		576,239
Royal Dutch Shell PLC–ADR (United Kingdom)		6,692		446,892
				1,814,402
Integrated Telecommunication Services–0.79%
Verizon Communications Inc.		6,928		247,884

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Basic Balanced Fund

	Shares		Value
Internet Software & Services–2.42%
eBay Inc.(b)		18,038	$	501,997
Yahoo! Inc.(b)		15,238		253,408
				755,405
Investment Banking & Brokerage–2.06%
Charles Schwab Corp. (The)		18,896		323,311
LPL Investment Holdings, Inc.(b)		671		24,404
Morgan Stanley		10,931		297,432
				645,147
IT Consulting & Other Services–0.63%
Amdocs Ltd.(b)		7,220		198,333
Life & Health Insurance–0.62%
Principal Financial Group, Inc.		5,917		192,658
Managed Health Care–1.29%
UnitedHealth Group Inc.		11,162		403,060
Movies & Entertainment–3.30%
Time Warner Inc.		12,286		395,241
Viacom Inc.–Class B		16,076		636,770
				1,032,011
Office Services & Supplies–0.47%
Avery Dennison Corp.		3,463		146,623
Oil & Gas Equipment & Services–1.46%
Cameron International Corp.(b)		1,766		89,589
Schlumberger Ltd.		4,398		367,233
				456,822
Oil & Gas Exploration & Production–2.77%
Anadarko Petroleum Corp.		6,690		509,511
Devon Energy Corp.		3,032		238,042
Noble Energy, Inc.		1,389		119,565
				867,118
Oil & Gas Storage & Transportation–0.22%
Williams Cos., Inc. (The)		2,805		69,340
Other Diversified Financial Services–5.65%
Bank of America Corp.		31,974		426,533
Citigroup Inc.(b)		63,922		302,351
JPMorgan Chase & Co.		24,470		1,038,018
				1,766,902
Packaged Foods & Meats–1.90%
Kraft Foods Inc.–Class A		9,903		312,044
Unilever N.V. New York Shares (Netherlands)		8,948		280,967
				593,011
Personal Products–1.10%
Avon Products, Inc.		11,827		343,693
Pharmaceuticals–4.14%
Abbott Laboratories		3,085		147,802
Bristol-Myers Squibb Co.		13,104		346,994
Merck & Co., Inc.		5,443		196,166
Pfizer Inc.		22,468		393,415
Roche Holdings AG–ADR (Switzerland)		5,716		210,034
				1,294,411
Property & Casualty Insurance–0.53%
Chubb Corp.		2,780		165,799
Regional Banks–2.11%
BB&T Corp.		4,824		126,823
Fifth Third Bancorp		8,652		127,011
PNC Financial Services Group, Inc.		6,698		406,703
				660,537
Semiconductors–0.67%
Intel Corp.		10,028		210,889
Soft Drinks–0.89%
Coca-Cola Co. (The)		2,562		168,503
Coca-Cola Enterprises, Inc.		4,326		108,280
				276,783
Specialty Chemicals–0.29%
LyondellBasell Industries N.V.–Class A (Netherlands)(b)		2,624		90,266
Systems Software–0.18%
Microsoft Corp.		2,003		55,924
Wireless Telecommunication Services–1.18%
Vodafone Group PLC–ADR (United Kingdom)		14,010		370,284
Total Common Stocks & Other Equity Interests (Cost $18,237,670)				21,770,955
	Principal
	Amount
Bonds & Notes–10.86%
Aerospace & Defense–0.03%
Raytheon Co., Sr. Unsec. Notes, 1.63%, 10/15/15	$	10,000		9,610
Agricultural Products–0.05%
Corn Products International Inc., Sr. Unsec. Notes, 6.63%, 04/15/37		15,000		15,689
Airlines–0.40%
Continental Airlines Inc., Series 2010-1, Class A, Sec. Pass Through Ctfs., 4.75%, 01/12/21		20,000		20,037
Delta Air Lines, Inc., Series 2001-1, Class A-2, Sr. Sec. Pass Through Ctfs., 7.11%, 09/18/11		100,000		103,875
				123,912

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Basic Balanced Fund

	Principal
	Amount		Value
Automotive Retail–0.24%
Advance Auto Parts Inc., Sr. Unsec. Gtd. Notes, 5.75%, 05/01/20	$	10,000	$	10,388
AutoZone Inc., Sr. Unsec. Notes, 5.88%, 10/15/12		60,000		64,469
				74,857
Brewers–0.27%
Anheuser-Busch InBev Worldwide Inc., Sr. Unsec. Gtd. Global Notes,
2.50%, 03/26/13		10,000		10,219
3.63%, 04/15/15		20,000		20,706
5.38%, 01/15/20		50,000		54,536
				85,461
Broadcasting–0.36%
CBS Corp., Sr. Unsec. Gtd. Global Notes, 5.75%, 04/15/20		50,000		53,218
COX Communications Inc., Sr. Unsec. Bonds, 8.38%, 03/01/39(c)		30,000		38,768
Sr. Unsec. Global Notes, 5.45%, 12/15/14		20,000		22,004
				113,990
Cable & Satellite–0.17%
DIRECTV Holdings LLC/DIRECTV Financing Co. Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 05/15/16		25,000		27,813
Time Warner Cable Inc., Sr. Unsec. Gtd. Notes, 5.88%, 11/15/40		25,000		24,851
				52,664
Department Stores–0.22%
Macy’s Retail Holdings Inc., Sr. Unsec. Gtd. Notes, 5.35%, 03/15/12		65,000		67,437
Diversified Banks–0.79%
Barclays Bank PLC (United Kingdom), Sr. Unsec. Global Notes, 5.13%, 01/08/20		60,000		61,827
Royal Bank of Scotland PLC (The) (United Kingdom), Sr. Unsec. Gtd. Global Notes, 4.88%, 03/16/15		25,000		25,468
Standard Chartered PLC (United Kingdom), Sr. Unsec. Notes, 5.50%, 11/18/14(c)		100,000		107,890
Wells Fargo & Co., Sr. Unsec. Global Notes, 3.63%, 04/15/15		50,000		52,011
				247,196
Diversified Metals & Mining–0.05%
Freeport-McMoRan Copper & Gold Inc., Sr. Unsec. Notes, 8.38%, 04/01/17		15,000		16,570
Electric Utilities–0.66%
Carolina Power & Light Co., Sec. First Mortgage Bonds, 5.30%, 01/15/19		15,000		16,693
Ohio Power Co., Series M, Sr. Unsec. Notes, 5.38%, 10/01/21		50,000		53,364
PPL Electric Utilities Corp., Sec. First Mortgage Bonds, 6.25%, 05/15/39		50,000		56,354
Progress Energy Inc., Sr. Unsec. Notes, 6.85%, 04/15/12		60,000		64,409
Virginia Electric & Power Co., Sr. Unsec. Notes, 5.00%, 06/30/19		15,000		16,289
				207,109
Environmental & Facilities Services–0.07%
Waste Management Inc., Sr. Unsec. Gtd. Notes, 5.00%, 03/15/14		20,000		21,630
Food Retail–0.12%
Safeway Inc., Sr. Unsec. Global Notes, 3.95%, 08/15/20		40,000		37,977
Health Care Equipment–0.10%
Boston Scientific Corp., Sr. Unsec. Notes, 6.00%, 01/15/20		30,000		31,413
Health Care Services–0.28%
Express Scripts Inc., Sr. Unsec. Gtd. Global Notes, 6.25%, 06/15/14		70,000		78,250
Medco Health Solutions Inc., Sr. Unsec. Notes, 2.75%, 09/15/15		10,000		9,945
				88,195
Hotels, Resorts & Cruise Lines–0.31%
Hyatt Hotels Corp., Sr. Unsec. Notes, 5.75%, 08/15/15(c)		70,000		73,617
Wyndham Worldwide Corp., Sr. Unsec. Notes, 7.38%, 03/01/20		20,000		22,025
				95,642
Industrial Conglomerates–0.06%
NBC Universal, Inc., Sr. Unsec. Notes,
2.10%, 04/01/14(c)		10,000		9,998
5.95%, 04/01/41(c)		10,000		10,045
				20,043
Integrated Telecommunication Services–0.45%
AT&T Inc., Sr. Unsec. Global Notes, 2.50%, 08/15/15		20,000		19,995
Cellco Partnership/Verizon Wireless Capital LLC, Sr. Unsec. Global Notes, 3.75%, 05/20/11		60,000		60,662
Windstream Georgia Communications Corp., Sr. Unsec. Notes, 6.50%, 11/15/13		59,000		59,559
				140,216
Internet Retail–0.10%
Expedia Inc., Sr. Unsec. Gtd. Global Notes, 5.95%, 08/15/20		30,000		30,203
Investment Banking & Brokerage–0.37%
Goldman Sachs Group Inc. (The), Sr. Global Notes, 3.70%, 08/01/15		65,000		66,328

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Basic Balanced Fund

	Principal
	Amount		Value
Investment Banking & Brokerage–(continued)
Macquarie Group Ltd. (Australia), Sr. Unsec. Notes, 6.00%, 01/14/20(c)	$	50,000	$	50,439
				116,767
Life & Health Insurance–0.42%
Aflac Inc., Sr. Unsec. Notes, 6.45%, 08/15/40		20,000		20,763
Monumental Global Funding II, Sr. Sec. Notes, 5.65%, 07/14/11(c)		25,000		25,463
Prudential Financial Inc., Series D, Sr. Unsec. Medium-Term Notes, 3.88%, 01/14/15		50,000		51,379
7.38%, 06/15/19		30,000		35,274
				132,879
Managed Health Care–0.24%
UnitedHealth Group Inc., Sr. Unsec. Notes, 5.25%, 03/15/11		45,000		45,418
WellPoint Inc, Sr. Unsec. Notes, 4.35%, 08/15/20		30,000		29,747
				75,165
Mortgage Backed Securities–0.25%
U.S. Bank N.A., Sr. Unsec. Medium-Term Global Notes, 5.92%, 05/25/12		74,878		77,894
Multi-Line Insurance–0.15%
Liberty Mutual Group Inc., Sr. Unsec. Notes, 5.75%, 03/15/14(c)		45,000		46,599
Office Electronics–0.27%
Xerox Corp., Sr. Unsec. Notes, 6.88%, 08/15/11		40,000		41,497
4.25%, 02/15/15		40,000		41,853
				83,350
Office REIT’s–0.15%
Digital Realty Trust L.P., Sr. Unsec. Gtd. Global Notes, 5.88%, 02/01/20		45,000		46,015
Oil & Gas Exploration & Production–0.13%
Petrobras International Finance Co. (Cayman Islands), Sr. Unsec. Gtd. Global Notes, 6.88%, 01/20/40		15,000		15,786
Petroleos Mexicanos (Mexico), Sr. Unsec. Gtd. Global Notes, 5.50%, 01/21/21		25,000		25,408
				41,194
Oil & Gas Refining & Marketing–0.13%
Premcor Refining Group Inc. (The), Sr. Unsec. Gtd. Global Notes, 6.75%, 02/01/11		40,000		40,182
Oil & Gas Storage & Transportation–0.49%
Enterprise Products Operating LLC, Sr. Unsec. Gtd. Notes, 5.20%, 09/01/20		25,000		25,942
6.45%, 09/01/40		25,000		27,099
Spectra Energy Capital LLC, Sr. Unsec. Gtd. Notes, 5.65%, 03/01/20		50,000		53,429
Transcontinental Gas Pipe Line Co. LLC, Series B, Sr. Unsec. Global Notes, 7.00%, 08/15/11		45,000		46,685
				153,155
Other Diversified Financial Services–1.62%
Citigroup Inc., Sr. Unsec. Global Notes, 6.01%, 01/15/15		65,000		71,485
Sr. Unsec. Notes, 4.75%, 05/19/15		75,000		78,941
Countrywide Home Loans Inc., Series L, Sr. Unsec. Gtd. Medium-Term Global Notes, 4.00%, 03/22/11		15,000		15,112
ERAC USA Finance LLC, Sr. Unsec. Gtd. Notes, 2.75%, 07/01/13(c)		20,000		20,346
General Electric Capital Corp., Sr. Unsec. Global Notes, 5.90%, 05/13/14		75,000		82,913
JPMorgan Chase & Co., Sr. Unsec. Global Notes, 4.75%, 05/01/13		65,000		69,620
Unsec. Sub. Global Notes, 5.13%, 09/15/14		70,000		74,638
Merrill Lynch & Co., Inc., Sr. Unsec. Medium-Term Notes, 6.88%, 04/25/18		85,000		92,973
Twin Reefs Pass-Through Trust, Sec. Floating Rate Pass Through Ctfs., 1.39% (Acquired 10/07/04; Cost $90,000)(c)(d)(e)(f)		90,000		0
				506,028
Packaged Foods & Meats–0.01%
Kraft Foods Inc., Sr. Unsec. Global Notes, 5.63%, 11/01/11		4,000		4,163
Paper Packaging–0.14%
Bemis Co. Inc., Sr. Unsec. Notes, 5.65%, 08/01/14		40,000		43,639
Paper Products–0.09%
International Paper Co., Sr. Unsec. Global Bonds, 7.50%, 08/15/21		25,000		29,496
Property & Casualty Insurance–0.12%
CNA Financial Corp., Sr. Unsec. Notes, 7.35%, 11/15/19		25,000		27,446
Travelers Cos., Inc. (The), Sr. Unsec. Notes, 5.35%, 11/01/40		10,000		9,826
				37,272
Publishing–0.05%
Reed Elsevier Capital Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 08/01/11		14,000		14,501
Railroads–0.09%
CSX Corp., Sr. Unsec. Notes, 5.50%, 04/15/41		30,000		29,485
Regional Banks–0.13%
PNC Funding Corp., Sr. Unsec. Gtd. Global Notes, 3.63%, 02/08/15		40,000		41,296

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Basic Balanced Fund

	Principal
	Amount		Value
Specialized Finance–0.16%
NASDAQ OMX Group Inc. (The), Sr. Unsec. Notes, 5.55%, 01/15/20	$	50,000	$	50,302
Specialized REIT’s–0.17%
Healthcare Realty Trust Inc., Sr. Unsec. Notes, 6.50%, 01/17/17		50,000		53,981
Specialty Properties–0.08%
Health Care REIT Inc., Sr. Unsec. Notes, 4.95%, 01/15/21		25,000		24,157
Steel–0.35%
ArcelorMittal (Luxembourg), Sr. Unsec. Global Bonds, 9.00%, 02/15/15		15,000		17,863
Sr. Unsec. Global Notes, 3.75%, 08/05/15		20,000		20,172
7.00%, 10/15/39		40,000		41,439
Vale Overseas Ltd., Sr. Unsec. Gtd. Global Notes, 4.63%, 09/15/20		20,000		19,924
6.88%, 11/10/39		10,000		10,909
				110,307
Technology Distributors–0.16%
Avnet Inc., Sr. Unsec. Notes, 5.88%, 06/15/20		50,000		50,250
Tobacco–0.12%
Altria Group Inc., Sr. Unsec. Gtd. Global Notes, 4.13%, 09/11/15		35,000		36,662
Trading Companies & Distributors–0.07%
GATX Corp., Sr. Unsec. Notes, 4.75%, 10/01/12		20,000		20,986
Wireless Telecommunication Services–0.17%
American Tower Corp., Sr. Unsec. Global Notes, 4.63%, 04/01/15		30,000		31,386
Vodafone Group PLC (United Kingdom), Sr. Unsec. Global Notes, 5.50%, 06/15/11		20,000		20,441
				51,827
Total Bonds & Notes (Cost $3,343,077)				3,397,366
U.S. Treasury Securities–8.10%
U.S. Treasury Bills–0.06%
0.19%, 01/20/11(g)(h)		20,000		19,998
U.S. Treasury Notes–6.92%
0.75%, 05/31/12		800,000		803,688
1.50%, 12/31/13		85,000		86,209
2.13%, 05/31/15		680,000		690,412
2.63%, 11/15/20		600,000		565,875
3.88%, 08/15/40		20,000		18,419
				2,164,603
U.S. Treasury Bonds–1.12%
5.38%, 02/15/31		195,000		227,510
4.50%, 08/15/39		40,000		41,063
4.38%, 05/15/40		80,000		80,375
				348,948
Total U.S. Treasury Securities (Cost $2,550,614)				2,533,549
U.S. Government Sponsored Mortgage-Backed Securities–2.53%
Federal Home Loan Mortgage Corp. (FHLMC)–0.27%
Pass Through Ctfs., 7.00%, 06/01/15 to 06/01/32		58,571		66,521
7.50%, 12/01/30 to 05/01/31		10,912		12,528
6.50%, 08/01/32		3,316		3,729
5.50%, 02/01/37		749		799
				83,577
Federal National Mortgage Association (FNMA)–1.17%
Pass Through Ctfs., 7.50%, 11/01/15 to 03/01/31		62,802		73,328
7.00%, 02/01/16 to 09/01/32		15,489		17,321
6.50%, 07/01/16 to 10/01/35		51,598		58,242
6.00%, 01/01/17 to 03/01/37		187,634		204,553
5.50%, 03/01/21		735		792
8.00%, 08/01/21 to 12/01/23		11,065		12,750
				366,986
Government National Mortgage Association (GNMA)–1.09%
Pass Through Ctfs., 7.50%, 06/15/23 to 10/15/31		27,187		31,488
8.50%, 11/15/24		27,730		33,110
8.00%, 08/15/25		5,813		6,862
6.50%, 03/15/29 to 01/15/37		235,178		269,868
				341,328
Total U.S. Government Sponsored Mortgage-Backed Securities (Cost $723,123)				791,891
U.S. Government Sponsored Agency Securities–0.43%
Federal National Mortgage Association (FNMA)–0.43%
Unsec. Global Notes, 2.63%, 11/20/14 (Cost $129,316)		130,000		134,759
Asset-Backed Securities–0.22%
Countrywide Asset-Backed Ctfs., Series 2007-4, Class A1B, Pass Through Ctfs., 5.81%, 09/25/37		35,066		34,504
Option One Mortgage Securities Corp., Series 2007-4A, Floating Rate Notes, 0.36%, 04/25/12 (Acquired 5/11/07; Cost $47,228)(c)(e)		47,228		34,198
Total Asset-Backed Securities (Cost $81,593)				68,702

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Basic Balanced Fund

	Shares		Value
Money Market Funds–8.31%
Liquid Assets Portfolio–Institutional Class(i)		1,300,171	$	1,300,171
Premier Portfolio–Institutional Class(i)		1,300,171		1,300,171
Total Money Market Funds (Cost $2,600,342)				2,600,342
TOTAL INVESTMENTS–100.06% (Cost $27,665,735)				31,297,564
OTHER ASSETS LESS LIABILITIES–(0.06)%				(19,180	)
NET ASSETS–100.00%			$	31,278,384

Investment Abbreviations:

ADR	– American Depositary Receipt
Ctfs.	– Certificates
Gtd.	– Guaranteed
REIT	– Real Estate Investment Trust
Sec.	– Secured
Sr.	– Senior
Sub.	– Subordinated
Unsec.	– Unsecured

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2010 was $417,363, which represented 1.33% of the Fund’s Net Assets.
(d)	Perpetual bond with no specified maturity date.
(e)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2010.
(f)	Defaulted security. Currently, the issuer is partially or fully in default with respect to interest payments. The value of this security at December 31, 2010 represented 0.00% of the Fund’s Net Assets.
(g)	All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1L and Note 4.
(h)	Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund.
(i)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Basic Balanced Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $25,065,393)	$	28,697,222
Investments in affiliated money market funds, at value and cost		2,600,342
Total investments, at value (Cost $27,665,735)		31,297,564
Foreign currencies, at value (Cost $25)		27
Receivable for:
Variation margin		3,031
Fund shares sold		24,815
Dividends and interest		89,656
Investment for trustee deferred compensation and retirement plans		31,210
Other assets		20
Total assets		31,446,323
Liabilities:
Payable for:
Fund shares reacquired		42,424
Accrued fees to affiliates		45,916
Accrued other operating expenses		39,634
Trustee deferred compensation and retirement plans		39,965
Total liabilities		167,939
Net assets applicable to shares outstanding	$	31,278,384
Net assets consist of:
Shares of beneficial interest	$	37,003,019
Undistributed net investment income		415,151
Undistributed net realized gain (loss)		(9,762,035	)
Unrealized appreciation		3,622,249
	$	31,278,384
Net Assets:
Series I	$	28,768,738
Series II	$	2,509,646
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		3,125,787
Series II		273,660
Series I:
Net asset value per share	$	9.20
Series II:
Net asset value per share	$	9.17

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $7,848)	$	369,094
Dividends from affiliated money market funds		2,084
Interest		358,589
Total investment income		729,767
Expenses:
Advisory fees		238,363
Administrative services fees		111,885
Custodian fees		18,197
Distribution fees — Series II		6,542
Transfer agent fees		9,483
Trustees’ and officers’ fees and benefits		16,802
Professional services fees		41,223
Other		17,348
Total expenses		459,843
Less: Fees waived		(167,421	)
Net expenses		292,422
Net investment income		437,345
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains from securities sold to affiliates of $258,919)		9,754
Foreign currencies		14,720
Futures contracts		(16,845	)
		7,629
Change in net unrealized appreciation (depreciation) of:
Investment securities		1,942,112
Foreign currencies		67
Futures contracts		(16,642	)
		1,925,537
Net realized and unrealized gain		1,933,166
Net increase in net assets resulting from operations	$	2,370,511

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Basic Balanced Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	437,345		$	632,897
Net realized gain (loss)		7,629			(5,065,105	)
Change in net unrealized appreciation		1,925,537			13,494,233
Net increase in net assets resulting from operations		2,370,511			9,062,025
Distributions to shareholders from net investment income:
Series I		(564,110	)		(1,432,717	)
Series II		(42,169	)		(137,986	)
Total distributions from net investment income		(606,279	)		(1,570,703	)
Share transactions–net:
Series I		(4,089,731	)		(3,151,421	)
Series II		(832,085	)		(329,105	)
Net increase (decrease) in net assets resulting from share transactions		(4,921,816	)		(3,480,526	)
Net increase (decrease) in net assets		(3,157,584	)		4,010,796
Net assets:
Beginning of year		34,435,968			30,425,172
End of year (includes undistributed net investment income of $415,151 and $565,392, respectively)	$	31,278,384		$	34,435,968

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Basic Balanced Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital and secondarily, current income.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an

Invesco V.I. Basic Balanced Fund

	independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.

Invesco V.I. Basic Balanced Fund

F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Dollar Roll and Forward Commitment Transactions — The Fund may engage in dollar roll and forward commitment transactions with respect to mortgage-backed securities issued by GNMA, FNMA and FHLMC. These transactions are often conducted on a to be announced (“TBA”) basis. In a TBA mortgage-backed transaction, the seller does not specify the particular securities to be delivered. Rather, a Fund agrees to accept any security that meets specified terms, such as an agreed upon issuer, coupon rate and terms of the underlying mortgages. TBA mortgage-backed transactions generally settle once a month on a specific date.
	In a dollar roll transaction, the Fund sells a mortgage-backed security held in the Fund to a financial institution such as a bank or broker-dealer, and simultaneously agrees to purchase a substantially similar security (same type, coupon and maturity) from the institution at an agreed upon price and future date. The mortgage-backed securities to be purchased will bear the same coupon as those sold, but generally will be collateralized by different pools of mortgages with different prepayment histories. Based on the typical structure of dollar roll transactions by the Fund, the dollar roll transactions are accounted for as financing transactions in which the Fund receives compensation as either a “fee” or a “drop”. “Fee” income which is agreed upon amongst the parties at the commencement of the dollar roll and the “drop” which is the difference between the selling price and the repurchase price of the mortgage-backed securities are amortized to income. During the period between the sale and purchase settlement dates, the Fund will not be entitled to receive interest and principal payments on securities purchased and not yet settled. Proceeds of the sale may be invested in short-term instruments, and the income from these investments, together with any additional fee income received on the sale, could generate income for the Fund exceeding the yield on the security sold. Dollar roll transactions are considered borrowings under the 1940 Act.
	Forward commitment transactions involve commitments by the Fund to acquire or sell TBA mortgage-backed securities from/to a financial institution, such as a bank or broker-dealer at a specified future date and amount. The TBA mortgage-backed security is marked to market until settlement and the unrealized appreciation or depreciation is recorded in the statement of operations.
	At the time the Fund enters into the dollar roll or forward commitment transaction, mortgage-backed securities or other liquid assets held by the Fund having a dollar value equal to the purchase price or in an amount sufficient to honor the forward commitment will be segregated.
	Dollar roll transactions involve the risk that the market value of the securities retained by the Fund may decline below the price of the securities that the Fund has sold but is obligated to purchase under the agreement. In the event that the buyer of securities in a dollar roll transaction files for bankruptcy or becomes insolvent, the Fund’s use of the proceeds from the sale of the securities may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s obligation to purchase the securities. The return earned by the Fund with the proceeds of the dollar roll transaction may not exceed the return on the securities sold.
	Forward commitment transactions involve the risk that a counter-party to the transaction may fail to complete the transaction. If this occurs, the Fund may lose the opportunity to purchase or sell the security at the agreed upon price. Settlement dates of forward commitment transactions may be a month or more after entering into these transactions and as a result the market values of the securities may vary from the purchase or sale prices. Therefore, forward commitment transactions may increase the Fund’s overall interest rate exposure.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and

Invesco V.I. Basic Balanced Fund

	reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
L.	Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities.
M.	Collateral — To the extent the Fund has pledged or segregated a security as collateral and that security is subsequently sold, it is the Fund’s practice to replace such collateral no later than the next business day.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $150 million		0	.75%
Over $150 million		0	.50%

  Through at least April 30, 2012, the Adviser has contractually agreed to waive advisory fees to the extent necessary so that the advisory fees payable by the Fund (based on the Fund’s average daily net assets) do not exceed the annual rate of:

Average Net Assets	Rate
First $250 million		0	.62%
Next $250 million		0	.605%
Next $500 million		0	.59%
Next $1.5 billion		0	.575%
Next $2.5 billion		0	.56%
Next $2.5 billion		0	.545%
Next $2.5 billion		0	.53%
Over $10 billion		0	.515%

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 0.91% and Series II shares to 1.16% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

Invesco V.I. Basic Balanced Fund

  For the year ended December 31, 2010, the Adviser waived advisory fees of $167,421.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $61,885 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1			Level 2		Level 3		Total
Equity Securities	$	24,161,263		$	210,034	$	—	$	24,371,297
U.S. Treasury Securities		—			2,533,549		—		2,533,549
U.S. Government Sponsored Securities		—			926,650		—		926,650
Corporate Debt Securities		—			3,397,366		0		3,397,366
Asset Backed Securities		—			34,504		34,198		68,702
	$	24,161,263		$	7,102,103	$	34,198	$	31,297,564
Futures*		(9,581	)		—		—		(9,581	)
Total Investments	$	24,151,682		$	7,102,103	$	34,198	$	31,287,983

*  Unrealized appreciation (depreciation).

NOTE 4—Derivative Investments

The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their

Invesco V.I. Basic Balanced Fund

effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Value of Derivative Instruments at Period-End

The Table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2010:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Interest rate risk
Futures contracts(a)	$	17,058	$	(26,639	)

^(a) Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets & Liabilities.

Effect of Derivative Instruments for the year ended December 31, 2010

The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on
	Statement of Operations
	Futures*
Realized Gain (loss)
Interest rate risk	$	(16,845	)
Change in Unrealized Appreciation (Depreciation)
Interest rate risk		(16,642	)
Total	$	(33,487	)

*  The average value of futures outstanding during the period was $1,995,245.

Open Futures Contracts at Period-End
								Unrealized
	Number of		Month/					Appreciation
Contract	Contracts		Commitment		Value			(Depreciation)
U.S. Treasury 5 Year Notes		7		March-2011/Long	$	824,031		$	(12,429	)
U.S. Treasury 30 Year Bonds		3		March-2011/Long		366,375			(14,210	)
Subtotal					$	1,190,406		$	(26,639	)
U.S. Treasury 2 Year Notes		1		March-2011/Short		(218,906	)	$	389
U.S. Treasury 10 Year Notes		5		March-2011/Short		(602,188	)		16,669
Subtotal					$	(821,094	)	$	17,058
Total								$	(9,581	)

NOTE 5—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $2,329,121 and securities sales of $1,746,361, which resulted in net realized gains of $258,919.

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $2,558 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

Invesco V.I. Basic Balanced Fund

NOTE 7—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary Income	$	606,279	$	1,570,703

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	452,302
Net unrealized appreciation — investments		3,354,164
Temporary book/tax differences		(37,151	)
Post-October deferrals		(36,110	)
Capital loss carryforward		(9,457,840	)
Shares of beneficial interest		37,003,019
Total net assets	$	31,278,384

  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 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 December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	3,766,236
December 31, 2017		5,167,583
December 31, 2018		524,021
Total capital loss carryforward	$	9,457,840

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $25,728,191 and $33,071,349, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	3,642,740
Aggregate unrealized (depreciation) of investment securities		(288,576	)
Net unrealized appreciation of investment securities	$	3,354,164
Cost of investments for tax purposes is $27,943,400.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforward, on December 31, 2010, undistributed net investment income was increased by $18,693, undistributed net realized gain (loss) was increased by $10,495,882 and shares of beneficial interest decreased by $10,514,575. This reclassification had no effect on the net assets of the Fund.

Invesco V.I. Basic Balanced Fund

NOTE 11—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		94,546		$	831,052			349,171		$	2,595,538
Series II		19,448			169,361			32,625			248,311
Issued as reinvestment of dividends:
Series I		65,824			564,110			168,555			1,432,717
Series II		4,938			42,169			16,291			137,986
Reacquired:
Series I		(629,541	)		(5,484,893	)		(972,587	)		(7,179,676	)
Series II		(118,335	)		(1,043,615	)		(98,463	)		(715,402	)
Net increase (decrease) in share activity		(563,120	)	$	(4,921,816	)		(504,408	)	$	(3,480,526	)

^(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. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																					Ratio of			Ratio of
																					expenses			expenses
					Net gains (losses)																to average			to average net			Ratio of net
	Net asset				on securities						Dividends										net assets			assets without			investment
	value,		Net		(both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	8.69	$	0.12	$	0.57		$	0.69		$	(0.18	)	$	9.20		8.06	%	$	28,769		0.90	%(d)		1.43	%(d)		1.40	%(d)		96	%
Year ended 12/31/09		6.81		0.15		2.14			2.29			(0.41	)		8.69		33.84			31,253		0.90			1.50			2.06			57
Year ended 12/31/08		11.81		0.31		(4.84	)		(4.53	)		(0.47	)		6.81		(38.32	)		27,596		0.91			1.35			3.11			50
Year ended 12/31/07		11.92		0.28		(0.01	)		0.27			(0.38	)		11.81		2.20			59,000		0.91			1.18			2.31			47
Year ended 12/31/06		10.99		0.25		0.91			1.16			(0.23	)		11.92		10.55			84,212		0.91			1.15			2.16			44
Series II
Year ended 12/31/10		8.66		0.10		0.56			0.66			(0.15	)		9.17		7.77			2,510		1.15	(d)		1.68	(d)		1.15	(d)		96
Year ended 12/31/09		6.78		0.13		2.13			2.26			(0.38	)		8.66		33.54			3,183		1.15			1.75			1.81			57
Year ended 12/31/08		11.73		0.28		(4.79	)		(4.51	)		(0.44	)		6.78		(38.46	)		2,829		1.16			1.60			2.86			50
Year ended 12/31/07		11.84		0.25		(0.01	)		0.24			(0.35	)		11.73		1.94			5,295		1.16			1.43			2.06			47
Year ended 12/31/06		10.91		0.22		0.91			1.13			(0.20	)		11.84		10.36			5,878		1.16			1.40			1.91			44

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s) of $29,165 and $2,617 for Series I and Series II shares, respectively.

NOTE 13—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco Van Kampen V.I. Equity and Income Fund (the “Acquiring Fund”) in exchange for shares of the Acquiring Fund. The Agreement requires approval of the Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

Invesco V.I. Basic Balanced Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Basic Balanced Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Basic Balanced Fund (formerly known as AIM V.I. Basic Balanced Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Basic Balanced Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,160.80	$	4.90	$	1,020.67	$	4.58		0.90	%
Series II		1,000.00		1,159.40		6.26		1,019.41		5.85		1.15

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Basic Balanced 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	42.59%
U.S. Treasury Obligations*	4.34%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Basic Balanced Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Basic Value Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VIBVA-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

On June 25, 2010, the team of Jason Leder, Devin Armstrong, Kevin Holt, Matthew Seinsheimer and James Warwick took over management of the Fund from the prior management team. A listing of your Fund’s managers appears later in this report.

     For the year ended December 31, 2010, Invesco V.I. Basic Value Fund underperformed its style-specific benchmark, the Russell 1000 Value Index. The Fund’s underperformance was largely due to holdings in the information technology (IT) sector. Alternatively, holdings in health care contributed to the Fund’s relative performance versus its style-specific benchmark.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	7.35	%
Series II Shares	6.94
S&P 500 Index▼ (Broad Market Index)	15.08
Russell 1000 Value Index▼ (Style-Specific Index)	15.51
Lipper VUF Large-Cap Value Funds Index▼ (Peer Group Index)	13.75

^▼ Lipper Inc.

How we invest

As noted above, the Fund’s management team changed during the reporting period. The new team seeks to exploit market inefficiencies by investing in companies that appear undervalued relative to the overall market. Ultimately, we believe that the market will recognize the value in these companies and will sell them as their stock price begins to reflect their intrinsic value. We feel that stock picking, as compared to making sector bets, provides a more consistent path to potential success. In addition, we may be able to take advantage of pricing anomalies by purchasing undervalued stocks before a recognizable catalyst arises.

     The Fund’s primary investable universe includes all U.S. denominated equities. In order to distill the investment universe, we filter for companies with sufficient liquidity. We filter the remaining securities on valuation metrics depending upon the growth or cyclical nature of their business. The result of this filtering process is a pool of securities that we believe are

statistically inexpensive relative to the broader market. Companies identified in the filtering process are thoroughly analyzed to assess intrinsic value and their ability to achieve fair value.

     We will purchase a security only if we believe the potential for stock price appreciation outweighs potential downside risk. To be eligible for inclusion in the Fund, a stock must meet the following criteria:

n	If the security is statistically cheap on the basis of its primary valuation criteria, which depends on the cyclical or growth nature of its business.
n	If rigorous fundamental analysis shows that the company is undervalued and possesses potential financial strength and improved quality of management for future growth.

     We maintain an intense focus on the quality of a company’s accounting and on financial statement analysis. Portfolio construction is bottom-up and stock specific, concentrating on individual company fundamental analysis and

valuations. Therefore, while we monitor and are aware of our positions relative to the benchmark, it does not play a major role in the construction of the Fund.

     We look to manage risk through portfolio construction, chiefly diversification across most major sectors, and through the assistance of an independent quantitative risk control group. Risk management is continuous. The Fund is regularly reviewed to ensure it is optimally constructed on a risk/reward basis. We have the final say on construction of the Fund and a collegial relationship exists between the risk management team and the Fund teams.

     Our sell discipline is just as important as the buy decision and is based on the same principles: relative value and fundamentals. While no sale is automatic, a security is typically sold if it meets one or more of the following criteria:

n	When we believe the target price has been realized, and if we no longer consider the company undervalued.
n	If we determine that a better value opportunity can be found elsewhere.
n	If our research shows that a company is experiencing deteriorating fundamentals beyond what we feel to be a tolerable level and the trend is likely to be a long term issue.

Market conditions and your Fund

Equity markets were choppy during the fiscal year as investors weighed the competing issues of solid corporate profits and soft macroeconomic data. Corporate earnings were largely positive but often were overshadowed by concerns about high unemployment, weak consumer spending, soft housing data and the possibility of additional U.S. Federal Reserve accommodation. After rising through April, major equity indexes sold off precipitously in May as the sovereign debt crisis unfolded in the eurozone while U.S. economic indicators

Portfolio Composition

By sector

Financials	30.5	%
Consumer Discretionary	20.3
Energy	12.7
Consumer Staples	9.2
Information Technology	9.2
Industrials	7.1
Health Care	5.2
Telecommunication Services	1.5
Materials	1.2
Money Market Funds
Plus Other Assets Less Liabilities	3.1

Top 10 Equity Holdings*

1.	Omnicom Group Inc.	5.0	%
2.	Chubb Corp.	4.6
3.	JPMorgan Chase & Co.	4.2
4.	Royal Dutch Shell PLC-ADR	3.7
5.	Time Warner Cable Inc.	3.6
6.	Molson Coors Brewing Co.-Class B	3.6
7.	Chevron Corp.	3.2
8.	Hewlett-Packard Co.	3.1
9.	Wal-Mart Stores, Inc.	3.1
10.	Comcast Corp.-Class A	3.0

Total Net Assets	$313.8 million
Total Number of Holdings*		44

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.

Invesco V.I. Basic Value Fund

remained weak, prompting fears of a “double-dip” recession. Uncertainty created by the debt crisis – combined with subdued employment, consumer spending and housing data – added to concerns that the recovery was slowing. Just as abruptly, however, the markets reversed course starting in September and rallied through the end of the year on modestly better economic news.

     Major equity indexes produced positive returns for the fiscal year, and all 10 sectors of the S&P 500 Index posted gains. More economically sensitive sectors such as consumer discretionary and industrials had the highest returns, while less economically sensitive sectors such as health care had some of the lowest returns.

     The IT sector was the largest detractor from relative and absolute Fund performance. More specifically, the Fund’s holdings in Nokia and Microsoft detracted from performance during the first half of the year. Soon after taking over management of the Fund in June, we sold the Fund’s positions in these two companies.

     Select holdings in the financials sector were also among the largest detractors from Fund returns. Moody’s and State Street detracted from performance during the first half of the year and we also eliminated these two holdings from the Fund. Energy holding BP was the single largest detractor from Fund performance; we sold our position in BP after taking over management of the Fund.

     Stock selection combined with an underweight position in the health care sector contributed to Fund performance relative to the Russell 1000 Value Index. Within health care, our holdings in Pfizer and UnitedHealth Group performed particularly well during the year.

     In absolute terms, the Fund’s holdings in consumer discretionary and financials contributed the most to performance. Media companies Omnicom and Time Warner were strong performers as was financial services company Chubb.

     Select holdings in the energy sector also made significant contributions to returns during the year. Since we assumed management of the Fund in June, we took advantage of weakness in select energy holdings to build our exposure to the sector. The stock price weakness was driven by the Mocondo offshore oil well incident and subsequent Gulf of Mexico drilling moratorium. Currently, the majority of the Fund’s

energy holdings are in the integrated oil industry, an area that has become more attractively priced.

     We believe that market volatility, and the market correction that occurred during the second quarter of 2010, created opportunities to invest in companies with attractive valuations. Our contrarian philosophy and deep value approach of buying extremely undervalued companies may capitalize on market volatility and down markets as value is created for new investment opportunities.

     Thank you for your investment in Invesco V.I. Basic Value Fund and for sharing our long-term investment horizon.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Jason Leder
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Basic Value Fund. He joined Invesco in 2010. Mr. Leder earned a B.A. from The University of Texas and an M.B.A. from Columbia University.

Devin Armstrong
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Basic Value Fund. He joined Invesco in 2010. Mr. Armstrong earned a B.S. in psychology and finance from the University of Illinois and an M.B.A. in finance from Columbia University.

Kevin Holt
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Basic Value Fund. He joined Invesco in 2010. Mr. Holt earned a B.A. from the University of Iowa and an M.B.A. from the University of Chicago.

Matthew Seinsheimer
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Basic Value Fund. He joined Invesco in 1992. Mr. Seinsheimer earned a B.B.A. from Southern Methodist University and an M.B.A. from The University of Texas at Austin.

James Warwick
Portfolio specialist, is manager of Invesco V.I. Basic Value Fund. He joined Invesco in 2010. Mr. Warwick earned a B.B.A. from Stephen F. Austin State University and an M.B.A. from the University of Houston.

Invesco V.I. Basic Value Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Classes since Inception

Index data from 8/31/01, Fund data from 9/10/01

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (9/10/01)		1.07	%
5 Years		-2.50
1 Year		7.35
Series II Shares
Inception	(9/10/01)	0.83	%
5 Years		-2.75
1 Year		6.94

The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end

variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.00% and 1.25%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Basic Value Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered

through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

Invesco V.I. Basic Value Fund

Invesco V.I. Basic Value Fund’s investment objective is long-term growth of capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

     Value stocks may react differently to issuer, political, market and economic developments than the market as a whole and other types of stocks. Value stocks tend to be inexpensive relative to their earnings or assets compared to other types of stocks and may never realize their full value. Value stocks tend to be currently out-of-favor with many investors.

     The Fund’s foreign investments may be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     The Fund may invest a large percentage of its assets in a limited number of securities or other instruments, which could negatively affect the value of the Fund.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Russell 1000^® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Lipper VUF Large-Cap Value Funds Index is an unmanaged index considered representative of large-cap value variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Basic Value Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–96.94%
Advertising–4.96%
Omnicom Group Inc.		339,615	$	15,554,367
Aerospace & Defense–2.42%
Honeywell International Inc.		142,549		7,577,905
Apparel Retail–1.22%
TJX Cos., Inc. (The)		86,083		3,821,224
Asset Management & Custody Banks–2.09%
Bank of New York Mellon Corp.		216,964		6,552,313
Brewers–3.64%
Molson Coors Brewing Co.–Class B		227,579		11,422,190
Cable & Satellite–6.67%
Comcast Corp.–Class A		431,546		9,481,066
Time Warner Cable Inc.		173,398		11,449,470
				20,930,536
Casinos & Gaming–1.55%
International Game Technology		275,303		4,870,110
Computer Hardware–4.40%
Dell Inc.(b)		297,376		4,029,445
Hewlett-Packard Co.		232,420		9,784,882
				13,814,327
Data Processing & Outsourced Services–1.45%
Western Union Co.		245,052		4,550,616
Department Stores–2.30%
Macy’s, Inc.		285,829		7,231,474
Diversified Banks–4.65%
Comerica Inc.		13,382		565,256
US Bancorp		191,034		5,152,187
Wells Fargo & Co.		286,305		8,872,592
				14,590,035
General Merchandise Stores–1.54%
Target Corp.		80,562		4,844,193
Household Products–2.49%
Procter & Gamble Co. (The)		121,283		7,802,135
Hypermarkets & Super Centers–3.11%
Wal-Mart Stores, Inc.		181,166		9,770,282
Industrial Conglomerates–2.87%
General Electric Co.		254,979		4,663,566
Tyco International Ltd.		104,684		4,338,105
				9,001,671
Industrial Machinery–1.80%
Illinois Tool Works Inc.		105,741		5,646,569
Integrated Oil & Gas–11.04%
Chevron Corp.		108,572		9,907,195
Exxon Mobil Corp.		89,017		6,508,923
Petroleo Brasileiro S.A.–ADR (Brazil)		173,739		6,574,284
Royal Dutch Shell PLC–ADR (United Kingdom)		174,677		11,664,930
				34,655,332
Investment Banking & Brokerage–3.11%
Goldman Sachs Group, Inc. (The)		28,486		4,790,206
Morgan Stanley		182,596		4,968,437
				9,758,643
IT Consulting & Other Services–1.58%
Accenture PLC–Class A (Ireland)		102,399		4,965,328
Life & Health Insurance–3.24%
MetLife, Inc.		125,798		5,590,463
Torchmark Corp.		76,596		4,575,845
				10,166,308
Managed Health Care–1.49%
UnitedHealth Group Inc.		129,202		4,665,484
Movies & Entertainment–2.05%
Time Warner Inc.		199,485		6,417,433
Oil & Gas Drilling–1.64%
Noble Corp.(b)		144,031		5,151,989
Other Diversified Financial Services–6.76%
Bank of America Corp.		614,393		8,196,002
JPMorgan Chase & Co.		307,123		13,028,158
				21,224,160
Pharmaceuticals–3.76%
Bristol-Myers Squibb Co.		206,284		5,462,400
Pfizer Inc.		361,639		6,332,299
				11,794,699
Property & Casualty Insurance–10.67%
Allied World Assurance Co. Holdings, Ltd.		80,516		4,785,871
Aspen Insurance Holdings Ltd.		202,630		5,799,271

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Basic Value Fund

	Shares		Value
Property & Casualty Insurance–(continued)
Chubb Corp. (The)		241,937	$	14,429,123
Travelers Cos., Inc. (The)		152,160		8,476,833
				33,491,098
Semiconductors–1.72%
Intel Corp.		257,348		5,412,028
Steel–1.22%
POSCO–ADR (South Korea)		35,652		3,839,364
Wireless Telecommunication Services–1.50%
Vodafone Group PLC–ADR (United Kingdom)		178,096		4,707,077
Total Common Stocks & Other Equity Interests (Cost $255,005,075)				304,228,890
Money Market Funds–3.02%
Liquid Assets Portfolio–Institutional Class(c)		4,732,799		4,732,799
Premier Portfolio–Institutional Class(c)		4,732,799		4,732,799
Total Money Market Funds (Cost $9,465,598)				9,465,598
TOTAL INVESTMENTS–99.96% (Cost $264,470,673)				313,694,488
OTHER ASSETS LESS LIABILITIES–0.04%				118,608
NET ASSETS–100.00%			$	313,813,096

Investment Abbreviation:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Basic Value Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $255,005,075)	$	304,228,890
Investments in affiliated money market funds, at value and cost		9,465,598
Total investments, at value (Cost $264,470,673)		313,694,488
Receivable for:
Investments sold		501,857
Fund shares sold		27,850
Dividends		458,935
Investment for trustee deferred compensation and retirement plans		24,068
Total assets		314,707,198
Liabilities:
Payable for:
Fund shares reacquired		310,496
Accrued fees to affiliates		457,304
Accrued other operating expenses		43,352
Trustee deferred compensation and retirement plans		82,950
Total liabilities		894,102
Net assets applicable to shares outstanding	$	313,813,096
Net assets consist of:
Shares of beneficial interest	$	346,274,947
Undistributed net investment income		1,919,672
Undistributed net realized gain (loss)		(83,605,338	)
Unrealized appreciation		49,223,815
	$	313,813,096
Net Assets:
Series I	$	181,514,836
Series II	$	132,298,260
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		28,448,910
Series II		20,861,466
Series I:
Net asset value per share	$	6.38
Series II:
Net asset value per share	$	6.34

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $124,214)	$	5,346,216
Dividends from affiliated money market funds		10,504
Total investment income		5,356,720
Expenses:
Advisory fees		2,237,405
Administrative services fees		861,228
Custodian fees		25,327
Distribution fees — Series II		323,976
Transfer agent fees		39,639
Trustees’ and officers’ fees and benefits		25,300
Other		58,630
Total expenses		3,571,505
Less: Fees waived and expense offset arrangement(s)		(12,121	)
Net expenses		3,559,384
Net investment income		1,797,336
Realized and unrealized gain from:
Net realized gain from:
Investment securities (includes net gains (losses) from securities sold to affiliates of $(391,829))		1,761,304
Foreign currencies		211,281
		1,972,585
Change in net unrealized appreciation of investment securities		17,975,887
Net realized and unrealized gain		19,948,472
Net increase in net assets resulting from operations	$	21,745,808

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Basic Value Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	1,797,336		$	1,541,745
Net realized gain (loss)		1,972,585			(33,121,862	)
Change in net unrealized appreciation		17,975,887			158,453,793
Net increase in net assets resulting from operations		21,745,808			126,873,676
Distributions to shareholders from net investment income:
Series I		(1,104,262	)		(3,201,037	)
Series II		(467,104	)		(1,368,809	)
Total distributions from net investment income		(1,571,366	)		(4,569,846	)
Share transactions–net:
Series I		(56,488,740	)		(1,497,408	)
Series II		(10,025,853	)		(45,220,456	)
Net increase (decrease) in net assets resulting from share transactions		(66,514,593	)		(46,717,864	)
Net increase (decrease) in net assets		(46,340,151	)		75,585,966
Net assets:
Beginning of year		360,153,247			284,567,281
End of year (includes undistributed net investment income of $1,919,672 and $1,482,421, respectively)	$	313,813,096		$	360,153,247

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Basic Value Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as

Invesco V.I. Basic Value Fund

	institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the

Invesco V.I. Basic Value Fund

	financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
J.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.695%
Next $250 million		0	.67%
Next $500 million		0	.645%
Next $1.5 billion		0	.62%
Next $2.5 billion		0	.595%
Next $2.5 billion		0	.57%
Next $2.5 billion		0	.545%
Over $10 billion		0	.52%

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, 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 Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

Invesco V.I. Basic Value Fund

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $12,010.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $84,661 for accounting and fund administrative services and reimbursed $776,567 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	313,694,488	$	—	$	—	$	313,694,488

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $38,964,918 and securities sales of $4,128,486, which resulted in net realized gains (losses) of $(391,829).

Invesco V.I. Basic Value Fund

NOTE 5—Expense Offset Arrangement(s)

The expense offset arrangement is comprised of custodian credits which result from periodic overnight cash balances at the custodian. For the year ended December 31, 2010, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $111.

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $3,317 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 7—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	1,571,366	$	4,569,846

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	2,000,450
Net unrealized appreciation — investments		46,447,867
Temporary book/tax differences		(80,778	)
Capital loss carryforward		(80,829,390	)
Shares of beneficial interest		346,274,947
Total net assets	$	313,813,096

  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 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 December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	40,544,207
December 31, 2017		32,409,899
December 31, 2018		7,875,284
Total capital loss carryforward	$	80,829,390

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

Invesco V.I. Basic Value Fund

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $270,971,564 and $337,120,962, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	48,395,390
Aggregate unrealized (depreciation) of investment securities		(1,947,523	)
Net unrealized appreciation of investment securities	$	46,447,867
Cost of investments for tax purposes is $267,246,621.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, on December 31, 2010, undistributed net investment income was increased by $211,281 and undistributed net realized gain was decreased by $211,281. This reclassification had no effect on the net assets of the Fund.

NOTE 11—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		1,839,415		$	11,111,452			7,249,578		$	36,341,584
Series II		4,402,680			25,876,503			6,780,957			32,543,999
Issued as reinvestment of dividends:
Series I		188,763			1,104,262			550,953			3,201,037
Series II		80,258			467,104			236,818			1,368,809
Reacquired:
Series I		(11,391,121	)		(68,704,454	)		(8,478,204	)		(41,040,029	)
Series II		(6,127,464	)		(36,369,460	)		(15,711,336	)		(79,133,264	)
Net increase (decrease) in share activity		(11,007,469	)	$	(66,514,593	)		(9,371,234	)	$	(46,717,864	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 61% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Basic Value Fund

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																											Ratio of			Ratio of
																											expenses			expenses
					Net gains																						to average			to average net			Ratio of net
	Net asset				(losses) on						Dividends			Distributions													net assets			assets without			investment
	value,		Net		securities (both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			Distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	5.98	$	0.04	$	0.40		$	0.44		$	(0.04	)	$	—		$	(0.04	)	$	6.38		7.35	%	$	181,515		1.00	%(d)		1.00	%(d)		0.65	%(d)		86	%
Year ended 12/31/09		4.10		0.03		1.94			1.97			(0.09	)		—			(0.09	)		5.98		48.00			226,282		0.98			0.99			0.59			23
Year ended 12/31/08		12.73		0.10		(6.68	)		(6.58	)		(0.09	)		(1.96	)		(2.05	)		4.10		(51.77	)		157,693		1.03			1.03			0.99			58
Year ended 12/31/07		13.35		0.07		0.17			0.24			(0.08	)		(0.78	)		(0.86	)		12.73		1.62			399,974		0.96			0.99			0.52			25
Year ended 12/31/06		12.37		0.07		1.54			1.61			(0.05	)		(0.58	)		(0.63	)		13.35		13.12			489,352		0.97			1.02			0.54			15
Series II
Year ended 12/31/10		5.95		0.02		0.39			0.41			(0.02	)		—			(0.02	)		6.34		6.94			132,298		1.25	(d)		1.25	(d)		0.40	(d)		86
Year ended 12/31/09		4.07		0.02		1.92			1.94			(0.06	)		—			(0.06	)		5.95		47.74			133,872		1.23			1.24			0.34			23
Year ended 12/31/08		12.62		0.07		(6.61	)		(6.54	)		(0.05	)		(1.96	)		(2.01	)		4.07		(51.90	)		126,874		1.28			1.28			0.74			58
Year ended 12/31/07		13.24		0.04		0.16			0.20			(0.04	)		(0.78	)		(0.82	)		12.62		1.36			303,628		1.21			1.24			0.27			25
Year ended 12/31/06		12.26		0.04		1.54			1.58			(0.02	)		(0.58	)		(0.60	)		13.24		12.94			339,457		1.22			1.27			0.29			15

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s) of $195,022 and $129,590 for Series I and Series II shares, respectively.

Invesco V.I. Basic Value Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Basic Value Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Basic Value Fund (formerly known as AIM V.I. Basic Value Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Basic Value Fund

Calculating your Ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,204.40	$	5.67	$	1,020.06	$	5.19		1.02	%
Series II		1,000.00		1,202.90		7.05		1,018.80		6.46		1.27

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Basic Value 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Basic Value Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Capital Appreciation Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VICAP-AR-1

NOT FDIC INSURED   MAY LOSE VALUE   NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2010, Invesco V.I. Capital Appreciation Fund had positive returns but underperformed versus its style-specific index, the Russell 1000 Growth Index. Much of the Fund’s underperformance was due to stock selection in several sectors. The Fund performed in-line with the broad market, represented by the S&P 500 Index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	15.49	%
Series II Shares	15.21
S&P 500 Index▼ (Broad Market Index)	15.08
Russell 1000 Growth Index▼ (Style-Specific Index)	16.71
Lipper VUF Multi-Cap Growth Funds Category Average▼ (Peer Group)	19.45

^▼ Lipper Inc.

How we invest

We believe a growth investment strategy is an essential component of a diversified portfolio. Our investment process seeks to identify companies that generate sustainable revenue, earnings and cash flow growth that is not fully reflected in investor expectations or equity valuations.

     We begin with a quantitative model that ranks companies based on a set of growth, quality and valuation factors. This proprietary model provides an objective approach to identifying new investment opportunities.

Portfolio Composition

By sector

Information Technology	28.6	%
Consumer Discretionary	16.7
Industrials	15.8
Health Care	11.2
Energy	9.5
Consumer Staples	7.8
Financials	6.4
Materials	1.3
Money Market Funds Plus Other Assets
Less Liabilities	2.7

Top 10 Industries

1.	Systems Software	7.0	%
2.	Computer Hardware	5.5
3.	Integrated Oil & Gas	4.8
4.	Data Processing & Outsourced
	Services	4.2
5.	Oil & Gas Equipment & Services	4.0
6.	Industrial Machinery	3.6
7.	Hypermarkets & Super Centers	3.1
8.	Biotechnology	3.0
9.	Soft Drinks	2.9
10.	Aerospace & Defense	2.8

     Our stock selection process is based on a rigorous three-step process that includes fundamental, valuation and timeliness analysis. Importantly, we search for compelling growth companies in all areas of the market, including many sectors that are not traditionally identified as growth sectors.

     Our fundamental analysis focuses on identifying industries and companies with strong fundamental drivers of high-quality growth in revenues, earnings and cash flow. Our valuation analysis focuses on identifying attractively valued

Top 10 Equity Holdings*

1.	Apple Inc.	4.6	%
2.	Check Point Software
	Technologies Ltd.	4.1
3.	Occidental Petroleum Corp.	3.6
4.	Kohl’s Corp.	2.6
5.	MasterCard, Inc.	2.5
6.	Amazon.com, Inc.	2.3
7.	Microsoft Corp.	2.3
8.	Comcast Corp.	2.2
9.	Cooper Industries PLC	2.1
10.	Ingersoll-Rand PLC	2.0

Total Net Assets	$683.7 million
Total Number of Holdings*		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.

stocks based on their growth potential over a two- to three-year time horizon. Our timeliness analysis employs moving average analysis and other selected factors to identify the timeliness of a stock transaction.

     We carefully construct the Fund with a goal to minimize unnecessary risk. We seek to accomplish this goal by diversifying Fund holdings across countries, sectors, industries and market capitalizations. Additionally, we avoid building concentrated position sizes and expect to hold numerous stocks in the Fund. Our target holding period is two to three years for each stock.

     We consider selling a stock when it no longer meets our investment criteria, based on:

n	Deteriorating fundamental business prospects.
n	Declining quantitative rank.
n	Negative changes to the investment thesis.
n	Finding a more attractive opportunity.

Market conditions and your Fund

The U.S. economy provided signs of improvement during the Fund’s fiscal year, potentially indicating that the economy has transitioned from a contraction phase into an expansionary phase. Nevertheless, the pace of recovery remained modest and the transition from government stimulus-induced growth to private economic recovery was uncertain.

     The U.S. Federal Reserve’s (the Fed) federal funds target rate remained low in a range of zero to 0.25%.¹ Real gross domestic product (GDP) registered positive growth during the reporting period with quarterly increases of 3.7%, 1.7% and 2.6% for the first, second and third quarters of 2010, respectively.² Inflation, measured by the seasonally-adjusted Consumer Price Index, remained relatively benign. While labor markets improved as layoffs moderated, new hiring remained quite weak. Unemployment, after climbing steadily throughout 2009, fell slightly during 2010 to a rate of 9.4% nationwide as of December 2010.³

     While stock market volatility increased significantly during the fiscal year, indexes measuring the performance of large-, mid- and small-cap stocks finished the period with positive, double-digit returns. In terms of investment style, growth stocks generally outperformed value stocks. The sectors with the highest returns in the Russell 1000 Growth Index included more

Invesco V.I. Capital Appreciation Fund

economically sensitive sectors such as consumer discretionary, industrials and materials, as well as the telecommunications sector. Conversely, the health care and utilities sectors had the lowest returns but were still in positive territory.

     The Fund had positive returns but underperformed the Russell 1000 Growth Index. Underperformance was driven primarily by stock selection in several sectors, including health care, financials and consumer staples. An underweight position in the materials sector and the Fund’s cash position also detracted from performance.

     Over the course of the fiscal year, the Fund underperformed by the widest margin in the health care sector, largely due to stock selection. The leading detractor from overall Fund performance was pharmaceutical product maker Gilead Sciences. This holding had weak performance following an announcement earlier in the year that revenues and earnings would be negatively impacted from costs related to U.S. healthcare reform legislation. An overweight position in the sector was also a detractor from relative performance, as the health care sector was one of the weakest performing sectors in the Russell 1000 Growth Index during the reporting period.

     Another area of weakness for the Fund during the fiscal year was the financials sector. Within this sector, underperformance was driven primarily by stock selection. Examples of holdings that detracted from performance included financial services firm Charles Schwab and insurance provider Ace. Charles Schwab and Ace are no longer held by the Fund.

     The Fund also underperformed in the consumer staples sector, due to stock selection. Within this sector, drugstore operator Walgreens had weak performance and detracted from returns. Walgreens is no longer held by the Fund.

     Some of this underperformance was offset by outperformance in other sectors, including consumer discretionary, industrials and information technology (IT). The Fund outperformed by the widest margin in the consumer discretionary sector, due to both stock selection and an overweight position. Two holdings were among the Fund’s top contributors to performance during the period: discount retailer Dollar Tree and online retailer Amazon.com.

     Outperformance in the industrials sector was also due to stock selection and an overweight position. Examples of

holdings that contributed to performance included airline holding company UAL, which merged with Continental Airlines and became United Continental Holdings, as well as heavy machinery and commercial products maker Ingersoll-Rand. UAL is no longer held by the Fund.

     The Fund outperformed in the IT sector due to stock selection. The leading contributor to Fund performance was Apple. Apple continued to benefit from strong consumer demand for its innovative technology products, including the iPad tablet computer as well as a new version of the iPhone. Network security software provider Checkpoint Software was also one of the leading contributors to Fund performance.

     During the fiscal year, the most significant changes to Fund positioning included a reduction in exposure in the IT, telecommunications, health care and materials sectors. Proceeds from the sale of holdings in these sectors were used to add exposure in other sectors, including industrials, consumer staples and energy.

     As we’ve discussed, the stock market experienced heavy volatility during the last 12 months. We would like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult a financial adviser to discuss your individual financial program. We thank you for your commitment to Invesco V.I. Capital Appreciation Fund.

1	U.S. Federal Reserve
2	Bureau of Economic Analysis
3	U.S. Bureau of Labor Statistics

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Robert Lloyd
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Capital Appreciation Fund. Mr. Lloyd joined Invesco in 2000. He earned a B.B.A. from the University of Notre Dame and an M.B.A. from the University of Chicago.

Ryan Amerman
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Capital Appreciation Fund. Mr. Amerman joined Invesco in 1996. He earned a B.B.A. from Stephen F. Austin State University and an M.B.A. with an emphasis in finance from the University of St. Thomas.

Invesco V.I. Capital Appreciation Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 4/30/93, Fund data from 5/5/93

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (5/5/93)			6.10	%
	10	Years	-1.78
	5	Years	-0.86
	1	Year	15.49
Series II Shares
	10	Years	-2.03	%
	5	Years	-1.11
	1	Year	15.21

Series II shares incepted on August 21, 2001. Performance shown prior to that date is that of Series I shares, restated to reflect the higher 12b-1 fees applicable to Series II. Series I performance reflects any applicable fee waivers or expense reimbursements. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results;

current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.92% and 1.17%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Capital Appreciation Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered

through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on this Invesco automated information line, 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

Invesco V.I. Capital Appreciation Fund

Invesco V.I. Capital Appreciation Fund’s investment objective is long-term growth of capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

Stocks of small and mid-sized companies tend to be more vulnerable to adverse developments in the above factors and may have little or no operating history or track record of success, and limited product lines, markets, management and financial resources. The securities of small and mid-sized companies may be more volatile due to less market interest and less publicly available information about the issuer. They also may be illiquid or restricted as to resale, or may trade less frequently and in smaller volumes, all of which may cause difficulty when establishing or closing a position at a desirable price.

     The Fund’s foreign investments may be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

     The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Russell 1000^® Growth Index is an unmanaged index considered representative of large-cap growth stocks. The Russell 1000 Growth Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Lipper VUF Multi-Cap Growth Funds Category Average represents an average of all of the variable insurance underlying funds in the Lipper Multi-Cap Growth Funds category.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry classifications used in this report are generally classified 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Capital Appreciation Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–97.25%
Aerospace & Defense–2.80%
Goodrich Corp.		56,818	$	5,003,961
Honeywell International Inc.		67,525		3,589,629
Rockwell Collins, Inc.		81,122		4,726,168
United Technologies Corp.		73,603		5,794,028
				19,113,786
Air Freight & Logistics–0.35%
Expeditors International of Washington, Inc.		43,302		2,364,289
Airlines–1.82%
Delta Air Lines, Inc.(b)		518,976		6,539,098
United Continental Holdings Inc.(b)		248,287		5,914,196
				12,453,294
Apparel Retail–0.46%
Men’s Wearhouse, Inc. (The)		126,009		3,147,705
Apparel, Accessories & Luxury Goods–1.20%
Coach, Inc.		147,879		8,179,187
Asset Management & Custody Banks–0.41%
Ameriprise Financial, Inc.		48,716		2,803,606
Auto Parts & Equipment–1.71%
Autoliv, Inc. (Sweden)		79,318		6,261,363
Johnson Controls, Inc.		142,156		5,430,359
				11,691,722
Automobile Manufacturers–0.36%
Toyota Motor Corp. (Japan)		62,600		2,463,926
Biotechnology–2.97%
Amgen Inc.(b)		143,324		7,868,488
Gilead Sciences, Inc.(b)		225,347		8,166,575
Human Genome Sciences, Inc.(b)		177,980		4,251,942
				20,287,005
Broadcasting–1.24%
Scripps Networks Interactive Inc.–Class A		163,602		8,466,403
Cable & Satellite–2.17%
Comcast Corp.–Class A		676,690		14,866,879
Communications Equipment–2.18%
Cisco Systems, Inc.(b)		340,020		6,878,605
JDS Uniphase Corp.(b)		308,623		4,468,861
QUALCOMM, Inc.		72,051		3,565,804
				14,913,270
Computer Hardware–4.60%
Apple Inc.(b)		97,426		31,425,731
Computer Storage & Peripherals–1.00%
EMC Corp.(b)		299,806		6,865,557
Construction & Engineering–0.57%
Fluor Corp.		59,186		3,921,664
Construction, Farm Machinery & Heavy Trucks–1.20%
Komatsu Ltd. (Japan)		105,500		3,191,106
Navistar International Corp.(b)		86,250		4,994,737
				8,185,843
Consumer Finance–0.45%
American Express Co.		72,142		3,096,335
Data Processing & Outsourced Services–4.22%
MasterCard, Inc.–Class A		76,326		17,105,420
Visa Inc.–Class A		166,681		11,731,009
				28,836,429
Department Stores–2.57%
Kohl’s Corp.(b)		322,822		17,542,147
Diversified Banks–0.63%
Banco Bradesco S.A.–ADR (Brazil)		213,799		4,337,982
Electrical Components & Equipment–2.06%
Cooper Industries PLC (Ireland)		242,209		14,118,363
Electronic Components–0.87%
Corning Inc.		308,068		5,951,874
Electronic Manufacturing Services–1.54%
Flextronics International Ltd. (Singapore)(b)		793,514		6,229,085
Tyco Electronics Ltd. (Switzerland)		120,914		4,280,355
				10,509,440
Fertilizers & Agricultural Chemicals–0.68%
Monsanto Co.		66,449		4,627,508
General Merchandise Stores–1.06%
Dollar Tree, Inc.(b)		128,907		7,229,105
Health Care Distributors–0.82%
Cardinal Health, Inc.		146,467		5,611,151
Health Care Equipment–1.16%
Hospira, Inc.(b)		90,627		5,047,017
Thoratec Corp.(b)		102,596		2,905,519
				7,952,536

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Capital Appreciation Fund

	Shares		Value
Health Care Services–1.55%
Medco Health Solutions, Inc.(b)		173,533	$	10,632,367
Home Improvement Retail–1.01%
Lowe’s Cos., Inc.		275,242		6,903,069
Homefurnishing Retail–0.91%
Bed Bath & Beyond Inc.(b)		126,624		6,223,570
Hotels, Resorts & Cruise Lines–0.94%
Carnival Corp.(c)		138,945		6,406,754
Household Products–0.99%
Procter & Gamble Co. (The)		105,240		6,770,089
Hypermarkets & Super Centers–3.11%
Costco Wholesale Corp.		177,613		12,825,435
Wal-Mart Stores, Inc.		156,136		8,420,414
				21,245,849
Industrial Gases–0.59%
Praxair, Inc.		42,564		4,063,585
Industrial Machinery–3.62%
Illinois Tool Works Inc.		104,717		5,591,888
Ingersoll-Rand PLC (Ireland)		295,646		13,921,970
Kennametal Inc.		132,111		5,213,100
				24,726,958
Integrated Oil & Gas–4.77%
Exxon Mobil Corp.		107,707		7,875,536
Occidental Petroleum Corp.		252,343		24,754,848
				32,630,384
Internet Retail–2.29%
Amazon.com, Inc.(b)		86,963		15,653,340
Internet Software & Services–2.30%
Google Inc.–Class A(b)		18,027		10,707,497
VeriSign, Inc.		153,864		5,026,737
				15,734,234
Investment Banking & Brokerage–2.15%
Goldman Sachs Group, Inc. (The)		42,001		7,062,888
Jefferies Group, Inc.		288,108		7,672,316
				14,735,204
IT Consulting & Other Services–2.09%
Accenture PLC–Class A (Ireland)		47,420		2,299,396
International Business Machines Corp.		39,649		5,818,887
Teradata Corp.(b)		150,106		6,178,363
				14,296,646
Life Sciences Tools & Services–0.52%
Life Technologies Corp.(b)		63,762		3,538,791
Managed Health Care–1.52%
UnitedHealth Group, Inc.		287,446		10,379,675
Oil & Gas Equipment & Services–4.05%
Baker Hughes Inc.		62,836		3,592,334
Cameron International Corp.(b)		143,910		7,300,554
Halliburton Co.		86,450		3,529,754
Schlumberger Ltd.		158,528		13,237,088
				27,659,730
Oil & Gas Exploration & Production–0.70%				��
Apache Corp.		40,199		4,792,927
Other Diversified Financial Services–1.22%
JPMorgan Chase & Co.		196,465		8,334,045
Packaged Foods & Meats–0.74%
Green Mountain Coffee Roasters, Inc.(b)		154,648		5,081,733
Pharmaceuticals–2.67%
Abbott Laboratories		178,022		8,529,034
Pfizer Inc.		371,198		6,499,677
Shire PLC (United Kingdom)		132,961		3,202,637
				18,231,348
Railroads–1.23%
Union Pacific Corp.		90,421		8,378,410
Regional Banks–0.50%
PNC Financial Services Group, Inc.		56,486		3,429,830
Restaurants–0.00%
Krispy Kreme Doughnuts Inc.–Wts., expiring 03/02/12(b)(d)		1,194		370
Semiconductor Equipment–0.44%
ASML Holding N.V. (Netherlands)		76,919		2,981,491
Semiconductors–2.09%
Cree, Inc.(b)		120,647		7,949,431
PMC-Sierra, Inc.(b)		411,256		3,532,689
Xilinx, Inc.		97,214		2,817,262
				14,299,382
Soft Drinks–2.93%
Coca-Cola Co. (The)		112,615		7,406,689
Hansen Natural Corp.(b)		13,258		693,128
PepsiCo, Inc.		183,140		11,964,536
				20,064,353
Specialized Consumer Services–0.33%
Coinstar, Inc.(b)		40,429		2,281,813

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Capital Appreciation Fund

	Shares		Value
Specialized Finance–1.03%
CME Group, Inc.		7,643	$	2,459,135
IntercontinentalExchange Inc.(b)		38,231		4,555,224
				7,014,359
Specialty Stores–0.45%
Dick’s Sporting Goods, Inc.(b)		81,274		3,047,775
Systems Software–7.04%
Check Point Software Technologies Ltd. (Israel)(b)		614,824		28,441,758
Microsoft Corp.		558,081		15,581,622
Oracle Corp.		131,890		4,128,157
				48,151,537
Technology Distributors–0.25%
Avnet, Inc.(b)		52,400		1,730,772
Trading Companies & Distributors–1.35%
W.W. Grainger, Inc.		66,751		9,218,981
Trucking–0.77%
J.B. Hunt Transport Services, Inc.		129,034		5,265,878
Total Common Stocks & Other Equity Interests (Cost $504,691,284)				664,867,986
Money Market Funds–2.96%
Liquid Assets Portfolio–Institutional Class(e)		10,125,559		10,125,559
Premier Portfolio–Institutional Class(e)		10,125,559		10,125,559
Total Money Market Funds (Cost $20,251,118)				20,251,118
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.21% (Cost $524,942,402)				685,119,104
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–0.29%
Liquid Assets Portfolio–Institutional Class (Cost $2,000,700)(e)(f)		2,000,700		2,000,700
TOTAL INVESTMENTS–100.50% (Cost $526,943,102)				687,119,804
OTHER ASSETS LESS LIABILITIES–(0.50)%				(3,422,774	)
NET ASSETS–100.00%			$	683,697,030

Investment Abbreviations:

ADR	– American Depositary Receipt
Wts.	– Warrants

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	Each unit represents one common share with paired trust share.
(d)	Non-income producing security acquired through a corporate action.
(e)	The money market fund and the Fund are affiliated by having the same investment adviser.
(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.

Invesco V.I. Capital Appreciation Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $504,691,284)	$	664,867,986
Investments in affiliated money market funds, at value and cost		22,251,818
Total investments, at value (Cost $526,943,102)		687,119,804
Cash		5,478
Receivables for:
Fund shares sold		43,886
Dividends		552,390
Investment for trustee deferred compensation and retirement plans		139,326
Other assets		388
Total assets		687,861,272
Liabilities:
Payable for:
Investments purchased		345,031
Fund shares reacquired		595,812
Collateral upon return of securities loaned		2,000,700
Accrued fees to affiliates		876,131
Accrued other operating expenses		57,196
Trustee deferred compensation and retirement plans		289,372
Total liabilities		4,164,242
Net assets applicable to shares outstanding	$	683,697,030
Net assets consist of:
Shares of beneficial interest	$	811,755,287
Undistributed net investment income		379,618
Undistributed net realized gain (loss)		(288,614,576	)
Unrealized appreciation		160,176,701
	$	683,697,030
Net Assets:
Series I	$	498,492,889
Series II	$	185,204,141
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		21,397,218
Series II		8,079,968
Series I:
Net asset value per share	$	23.30
Series II:
Net asset value per share	$	22.92

*  At December 31, 2010, securities with an aggregate value of $1,961,427 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $4,192)	$	7,130,077
Dividends from affiliated money market funds (includes securities lending income of $16,450)		52,197
Total investment income		7,182,274
Expenses:
Advisory fees		4,094,480
Administrative services fees		1,695,726
Custodian fees		38,718
Distribution fees:
Series II		451,268
Transfer agent fees		83,006
Trustees’ and officers’ fees and benefits		34,319
Other		90,544
Total expenses		6,488,061
Less: Fees waived, expenses reimbursed and expense offset arrangement(s)		(41,171	)
Net expenses		6,446,890
Net investment income		735,384
Realized
Net realized gain (loss) from:
Investment securities (includes net gains (losses) from securities sold to affiliates of ($431,879))		45,432,536
Foreign currencies		(39,646	)
		45,392,890
Change in net unrealized appreciation of:
Investment securities		47,561,475
Foreign currencies		—
		47,561,475
Net realized and unrealized gain		92,954,365
Net increase in net assets resulting from operations	$	93,689,749

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Capital Appreciation Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	735,384		$	4,829,676
Net realized gain (loss)		45,392,890			(94,066,494	)
Change in net unrealized appreciation		47,561,475			214,294,752
Net increase in net assets resulting from operations		93,689,749			125,057,934
Distributions to shareholders from net investment income:
Series I		(3,537,619	)		(2,958,538	)
Series II		(915,129	)		(485,149	)
Total distributions from net investment income		(4,452,748	)		(3,443,687	)
Share transactions–net:
Series I		(78,894,363	)		(68,162,037	)
Series II		(32,232,888	)		(16,738,294	)
Net increase (decrease) in net assets resulting from share transactions		(111,127,251	)		(84,900,331	)
Net increase (decrease) in net assets		(21,890,250	)		36,713,916
Net assets:
Beginning of year		705,587,280			668,873,364
End of year (includes undistributed net investment income of $379,619 and $4,136,629, respectively)	$	683,697,030		$	705,587,280

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Capital Appreciation Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as

Invesco V.I. Capital Appreciation Fund

	institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the

Invesco V.I. Capital Appreciation Fund

	financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.65%
Over $250 million		0	.60%

  Under the terms of master intergroup sub-advisory contracts between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 1.30%

Invesco V.I. Capital Appreciation Fund

and Series II shares to 1.45% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $41,171.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $162,163 for accounting and fund administrative services and reimbursed $1,533,563 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	678,471,750	$	8,648,054	$	—	$	687,119,804

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price.

Invesco V.I. Capital Appreciation Fund

Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $933,281 and securities sales of $2,636,693, which resulted in net realized gains (losses) of $(431,879).

NOTE 5—Expense Offset Arrangement(s)

The expense offset arrangement is comprised of custodian credits which result from periodic overnight cash balances at the custodian. For the year ended December 31, 2010, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $25.

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $4,136 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 7—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

Distributions to Shareholders:

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	4,452,748	$	3,443,686

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	656,404
Net unrealized appreciation — investments		156,378,867
Net unrealized appreciation (depreciation) — other investments		(125,976	)
Temporary book/tax differences		(276,785	)
Capital loss carryforward		(284,690,766	)
Shares of beneficial interest		811,755,286
Total net assets	$	683,697,030

  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 utilized $44,077,954 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2011	$	56,312,952
December 31, 2017		228,377,814
Total capital loss carryforward	$	284,690,766

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

Invesco V.I. Capital Appreciation Fund

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $354,112,518 and $466,172,524, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	159,564,695
Aggregate unrealized (depreciation) of investment securities		(3,185,828	)
Net unrealized appreciation of investment securities	$	156,378,867
Cost of investments for tax purposes is $530,740,937.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforwards and foreign currency transactions, on December 31, 2010, undistributed net investment income (loss) was decreased by $39,647, undistributed net realized gain (loss) was increased by $96,496,960 and shares of beneficial interest decreased by $96,457,313. This reclassification had no effect on the net assets of the Fund.

NOTE 11—Share Information

	Summary of Share Activity
	Years ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		587,627		$	12,238,362			1,264,061		$	22,171,261
Series II		512,761			10,258,765			874,710			15,048,701
Issued as reinvestment of dividends:
Series I		170,899			3,537,619			149,045			2,958,538
Series II		44,903			915,129			24,828			485,149
Reacquired:
Series I		(4,572,413	)		(94,670,344	)		(5,328,522	)		(93,291,836	)
Series II		(2,127,908	)		(43,406,782	)		(1,893,167	)		(32,272,144	)
Net increase (decrease) in share activity		(5,384,131	)	$	(111,127,251	)		(4,909,045	)	$	(84,900,331	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 51% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Capital Appreciation Fund

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																						Ratio of			Ratio of
						Net gains																expenses			expenses
						(losses) on																to average			to average net			Ratio of net
	Net asset		Net			securities						Dividends										net assets			assets without			investment
	value,		investment			(both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income			realized and			investment			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)			unrealized)			operations			income			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/10	$	20.33	$	0.04	(c)	$	3.09		$	3.13		$	(0.16	)	$	23.30		15.49	%	$	498,493		0.90	%(d)		0.91	%(d)		0.19	%(d)		56	%
Year ended 12/31/09		16.89		0.14	(c)		3.42			3.56			(0.12	)		20.33		21.08			512,540		0.90	(d)		0.91	(d)		0.79	(d)		85
Year ended 12/31/08		29.37		0.09	(c)		(12.57	)		(12.48	)		—			16.89		(42.49	)		492,079		0.91			0.91			0.37			103
Year ended 12/31/07		26.22		0.01			3.14			3.15			—			29.37		12.01			1,086,677		0.88			0.88			0.03			71
Year ended 12/31/06		24.67		0.01			1.55			1.56			(0.01	)		26.22		6.34			1,204,559		0.91			0.91			0.06			120
Series II
Year ended 12/31/10		20.00		(0.01	)(c)		3.04			3.03			(0.11	)		22.92		15.21			185,204		1.15	(d)		1.16	(d)		(0.06	)(d)		56
Year ended 12/31/09		16.61		0.09	(c)		3.35			3.44			(0.05	)		20.00		20.72			193,047		1.15	(d)		1.16	(d)		0.54	(d)		85
Year ended 12/31/08		28.95		0.03	(c)		(12.37	)		(12.34	)		—			16.61		(42.63	)		176,794		1.16			1.16			0.12			103
Year ended 12/31/07		25.91		(0.07	)		3.11			3.04			—			28.95		11.73			349,294		1.13			1.13			(0.22	)		71
Year ended 12/31/06		24.43		(0.05	)		1.53			1.48			—			25.91		6.06			371,316		1.16			1.16			(0.19	)		120

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Calculated using average shares outstanding.
(d)	Ratios are based on average daily net assets (000’s) of $481,073 and $180,507 for Series I and Series II shares, respectively

Invesco V.I. Capital Appreciation Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco V.I. Variable Insurance Funds)

and Shareholders of Invesco V.I. Capital Appreciation Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Capital Appreciation Fund (formerly known as AIM V.I. Capital Appreciation Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Capital Appreciation Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
			ACTUAL				(5% annual return before expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,263.70	$	5.14	$	1,020.67	$	4.58		0.90	%
Series II		1,000.00		1,261.80		6.56		1,019.41		5.85		1.15

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Capital Appreciation 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Capital Appreciation Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Capital Development Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VICDV-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the fiscal year ended December 31, 2010, Invesco V.I. Capital Development Fund had positive double-digit returns but underperformed the Fund’s style-specific benchmark, the Russell Midcap Growth Index. Underperformance was driven primarily by stock selection in several sectors. The Fund outperformed the broad market as represented by the S&P 500 Index, as mid-cap stocks generally outperformed large-cap stocks.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	18.78	%
Series II Shares	18.47
S&P 500 Index▼ (Broad Market Index)	15.08
Russell Midcap Growth Index▼ (Style-Specific Index)	26.38
Lipper VUF Mid-Cap Growth Funds Index▼ (Peer Group Index)	27.62

^▼ Lipper Inc.

How we invest

We believe a growth investment strategy is an essential component of a diversified portfolio.

     Our investment process combines fundamental and quantitative analysis to uncover companies exhibiting long-term, sustainable revenue, earnings and cash flow growth that is not yet reflected by the stock’s market price.

     Our quantitative model ranks companies based on a set of fundamental, valuation and timeliness factors. This quantitative model is designed to identify

stocks with the highest probability of meeting our team’s investment criteria. Stocks that are ranked highest by our quantitative model are the focus of our fundamental research efforts.

     Our fundamental analysis focuses on identifying companies and industries with strong drivers of growth. To accomplish this goal, we develop a fully integrated financial model to gain a more complete understanding of the financial health of each investment candidate. Additionally, our research involves due diligence of the company, which includes a detailed

Portfolio Composition

By sector

Information Technology	22.6	%
Industrials	20.8
Consumer Discretionary	19.0
Health Care	11.7
Energy	8.3
Financials	6.4
Materials	4.6
Consumer Staples	2.3
Telecommunication Services	1.6
Utilities	0.9
Money Market Funds Plus Other Assets
Less Liabilities	1.8

Total Net Assets	$175.7 million
Total Number of Holdings*		97

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.

Top 10 Equity Holdings*

1.	Concho Resources Inc.	1.8	%
2.	Marriott International Inc.	1.8
3.	AGCO Corp.	1.6
4.	Albemarle Corp.	1.6
5.	Affiliated Managers Group, Inc.	1.6
6.	Universal Health Services, Inc.	1.5
7.	Coach, Inc.	1.5
8.	Rovi Corp.	1.5
9.	Borg Warner, Inc.	1.5
10.	Discover Financial Services	1.5

Top 10 Industries

1.	Oil & Gas Exploration & Production	5.4	%
2.	Semiconductors	4.3
3.	Hotels, Resorts & Cruise Lines	3.8
4.	Industrial Machinery	3.5
5.	Specialty Chemicals	2.9
6.	Department Stores	2.8
7.	Systems Software	2.7
8.	Application Software	2.6
9.	Construction, Farm Machinery & Heavy Trucks	2.6
10.	IT Consulting & Other Services	2.6

analysis of the strategic plans of the company’s management team. We also analyze key competitors, customers and suppliers to assess the overall attractiveness and growth potential of the industry.

     Risk management plays an important role in portfolio construction, as our target portfolio attempts to limit volatility and downside risk. We seek to accomplish this goal by investing in sectors, industries and companies with attractive fundamental prospects. We limit the Fund’s sector exposure and also seek to minimize stock-specific risk by building a diversified portfolio.

     We consider selling a stock for any of the following reasons:

n	There is a change in fundamentals, market capitalization or deterioration in the timeliness profile.
n	The price target set at purchase has been reached.
n	The investment thesis is no longer valid.
n	Insider selling indicates potential issues.

Market conditions and your Fund

The U.S. economy provided signs of improvement during the Fund’s fiscal year, potentially indicating that the economy has transitioned from a contraction phase into an expansionary phase. Nevertheless, the pace of recovery remained modest and the transition from government stimulus-induced growth to private economic recovery was uncertain.

     The U.S. Federal Reserve’s (the Fed) federal funds target rate remained low in a range from zero to 0.25%.¹ Real gross domestic product (GDP) registered positive growth during the reporting period with quarterly increases of 3.7%, 1.7% and 2.6% for the first, second and third quarters of 2010, respectively.² Inflation, measured by the seasonally-adjusted Consumer Price Index, remained relatively benign. While labor markets improved as layoffs moderated, new hiring remained quite weak. Unemployment, after climbing steadily throughout 2009, fell slightly during 2010 to a rate of 9.4% nationwide as of December 2010.³

     While stock market volatility increased significantly during the fiscal year, indexes measuring the performance of large-, mid- and small-cap stocks finished the period with positive, double-digit returns. In terms of investment style, growth stocks generally outperformed

Invesco V.I. Capital Development Fund

value stocks. The sectors with the highest returns in the Russell Midcap Growth Index included more economically sensitive sectors such as consumer discretionary, industrials, materials and information technology (IT). Conversely, the utilities sector was the only sector with a negative return during the period.

     The Fund had double-digit absolute returns, but underperformed versus the Russell Midcap Growth Index during the fiscal year. The Fund underperformed by the widest margin in the consumer discretionary, health care and materials sectors. Some of this underperformance was offset by outperformance in other sectors, including utilities and energy.

     The Fund underperformed most significantly in the consumer discretionary sector, primarily driven by stock selection. Within this sector, key detractors from performance included for-profit education services provider ITT Educational Services and discount department store operator J.C. Penney. We sold the Fund’s position in both holdings due to deteriorating fundamentals. Despite underperforming in this sector, two holdings were among the leading contributors to performance: automotive engine and drive train parts maker BorgWarner and casino operator Las Vegas Sands.

      Underperformance in the health care sector was largely due to stock selection. Examples of holdings that detracted from performance included medical device maker NuVasive and animal hospital operator VCA Antech. While we sold the Fund’s position in VCA Antech due to deteriorating fundamentals, we continue to own NuVasive.

     Another area of weakness for the Fund was the materials sector, where the Fund’s holdings generally under-performed those of the Russell Midcap Growth Index. Within this sector, holdings that detracted from performance included glass container manufacturer Owens-Illinois and fertilizer maker Intrepid Potash. We sold the Fund’s position in both holdings due to deteriorating fundamentals.

     Some of this underperformance was offset by outperformance in other sectors. The Fund outperformed the Russell Midcap Growth Index by the widest margin in the utilities sector, due to stock selection and an underweight position. One holding that made a positive contribution to performance was electric power generation plant operator KGen Power. However, our underweight position in utilities was a benefit as this more defensive sector was the weakest

performing sector in the Russell Midcap Growth Index during the reporting period.

     Outperformance in the energy sector was driven by stock selection. Two examples of energy holdings that made positive contributions to performance included oil and gas exploration and production firms Concho Resources and Oasis Petroleum.

     As we’ve discussed, the stock market experienced significant volatility during the fiscal year. We would like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult a financial adviser to discuss your individual financial program. We thank you for your commitment to Invesco V.I. Capital Development Fund.

1	U.S. Federal Reserve
2	Bureau of Economic Analysis
3	U.S. Bureau of Labor Statistics

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Paul Rasplicka
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Capital Development Fund. Mr. Rasplicka joined Invesco in 1998. He began his investment career in 1982. Mr. Rasplicka earned a B.S. in business administration from the University of Colorado and an M.B.A. from the University of Chicago.

Brent Lium
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Capital Development Fund. Mr. Lium joined Invesco in 2001. He earned a B.B.A. from Texas A&M University and an M.B.A. from The University of Texas at Austin.

Invesco V.I. Capital Development Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception

Index data from 4/30/98, Fund data from 5/01/98

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (5/1/98)			5.06	%
	10	Years	3.66
	5	Years	2.96
	1	Year	18.78
Series II Shares
	10	Years	3.41	%
	5	Years	2.71
	1	Year	18.47

Series II shares incepted on August 21, 2001. Performance shown prior to that date is that of Series I shares, restated to reflect the higher 12b-1 fees applicable to Series II. Series I performance reflects any applicable fee waivers or expense reimbursements. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or

higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.11% and 1.36%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.12% and 1.37%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Capital Development Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Vari-

able Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial advise.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2012. See current prospectus for more information.

Invesco V.I. Capital Development Fund

Invesco V.I. Capital Development Fund’s investment objective is long-term growth of capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

     The Fund’s foreign investments will be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     Growth stocks can perform differently from the market as a whole. Growth stocks tend to be more expensive relative to their earnings or assets compared with other types of stock. As a result, they tend to be more sensitive to changes in their earnings and can be more volatile.

     Stocks of small and mid sized companies tend to be more vulnerable to adverse developments in the above factors and may have little or no operating history or track record of success, and limited product lines, markets, management and financial resources. The securities of small and mid sized companies may be more volatile due to less market interest and less publicly available information about the issuer. They also may be illiquid or restricted as to resale, or may trade less frequently and in smaller volumes, all of which may cause difficulty when establishing or closing a position at a desirable price.

     The Fund engages in frequent trading of portfolio securities. Active trading results in added expenses and may result in a lower return.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

About indexes used in this report

The S&P 500 ^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Russell Midcap ^® Growth Index is an unmanaged index considered representative of mid-cap growth stocks. The Russell Midcap Growth Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Lipper VUF Mid-Cap Growth Funds Index is an unmanaged index considered representative of mid-cap growth variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry classifications used in this report are generally classified 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Capital Development Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–98.17%
Aerospace & Defense–1.23%
Goodrich Corp.		24,594	$	2,165,994
Air Freight & Logistics–2.01%
C.H. Robinson Worldwide, Inc.		23,795		1,908,121
UTI Worldwide, Inc.		76,321		1,618,005
				3,526,126
Apparel, Accessories & Luxury Goods–1.53%
Coach, Inc.		48,587		2,687,347
Application Software–2.60%
Autodesk, Inc.(b)		44,233		1,689,701
Citrix Systems, Inc.(b)		17,714		1,211,815
TIBCO Software Inc.(b)		84,474		1,664,982
				4,566,498
Asset Management & Custody Banks–1.54%
Affiliated Managers Group, Inc.(b)		27,255		2,704,241
Auto Parts & Equipment–2.03%
BorgWarner, Inc.(b)		37,077		2,682,892
Gentex Corp.		29,745		879,262
				3,562,154
Automotive Retail–1.13%
O’Reilly Automotive, Inc.(b)		32,869		1,985,945
Biotechnology–1.77%
Human Genome Sciences, Inc.(b)		58,085		1,387,651
United Therapeutics Corp.(b)		27,368		1,730,205
				3,117,856
Broadcasting–1.05%
Discovery Communications, Inc.–Class A(b)		44,243		1,844,933
Casinos & Gaming–2.25%
Las Vegas Sands Corp.(b)		33,061		1,519,153
MGM Resorts International(b)		163,754		2,431,747
				3,950,900
Coal & Consumable Fuels–1.06%
Alpha Natural Resources, Inc.(b)		30,904		1,855,167
Communications Equipment–1.08%
Finisar Corp.(b)		52,471		1,557,864
Lantronix Inc.–Wts., expiring 02/09/11(c)		576		0
Sycamore Networks, Inc.		16,669		343,215
				1,901,079
Computer Storage & Peripherals–1.05%
NetApp, Inc.(b)		33,692		1,851,712
Construction & Engineering–0.68%
Foster Wheeler AG (Switzerland)(b)		34,740		1,199,225
Construction, Farm Machinery & Heavy Trucks–2.58%
AGCO Corp.(b)		54,740		2,773,129
Navistar International Corp.(b)		30,340		1,756,989
				4,530,118
Consumer Finance–1.49%
Discover Financial Services		141,584		2,623,552
Data Processing & Outsourced Services–1.43%
Alliance Data Systems Corp.(b)(d)		35,350		2,510,910
Department Stores–2.79%
Macy’s, Inc.		98,566		2,493,720
Nordstrom, Inc.		56,935		2,412,905
				4,906,625
Education Services–1.03%
Capella Education Co.(b)		27,312		1,818,433
Electrical Components & Equipment–1.05%
Regal-Beloit Corp.		27,563		1,840,106
Electronic Components–1.33%
Amphenol Corp.–Class A		44,373		2,342,007
Environmental & Facilities Services–1.02%
Republic Services, Inc.		60,248		1,799,005
Health Care Equipment–2.37%
American Medical Systems Holdings, Inc.(b)		72,370		1,364,898
CareFusion Corp.(b)		72,656		1,867,259
NuVasive, Inc.(b)(d)		36,549		937,482
				4,169,639
Health Care Facilities–2.09%
Brookdale Senior Living Inc.(b)		45,377		971,521
Universal Health Services, Inc.–Class B		62,073		2,695,210
				3,666,731
Health Care Services–0.94%
DaVita, Inc.(b)		11,775		818,245
Fresenius Medical Care AG & Co. KGaA–ADR (Germany)		14,422		832,005
				1,650,250

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Capital Development Fund

	Shares		Value
Hotels, Resorts & Cruise Lines–3.77%
Ctrip.com International, Ltd.–ADR (China)(b)		40,862	$	1,652,868
Marriott International Inc.–Class A		74,321		3,087,294
Starwood Hotels & Resorts Worldwide, Inc.		31,027		1,885,821
				6,625,983
Household Products–1.08%
Church & Dwight Co., Inc.		27,609		1,905,573
Human Resource & Employment Services–2.03%
Manpower Inc.		27,462		1,723,515
Robert Half International, Inc.		60,048		1,837,469
				3,560,984
Independent Power Producers & Energy Traders–0.90%
KGEN Power Corp. (Acquired 01/12/07; Cost $2,219,196)(b)(e)		158,514		1,585,140
Industrial Machinery–3.49%
Flowserve Corp.		20,178		2,405,621
Gardner Denver Inc.		23,559		1,621,330
Kennametal Inc.		53,334		2,104,560
				6,131,511
Internet Software & Services–2.11%
Akamai Technologies, Inc.(b)		19,522		918,510
MercadoLibre Inc.(b)		16,486		1,098,792
VeriSign, Inc.		51,661		1,687,765
				3,705,067
IT Consulting & Other Services–2.57%
Cognizant Technology Solutions Corp.–Class A(b)		29,529		2,164,180
Teradata Corp.(b)		57,343		2,360,238
				4,524,418
Life Sciences Tools & Services–1.90%
Life Technologies Corp.(b)		31,272		1,735,596
Pharmaceutical Product Development, Inc.		59,185		1,606,281
				3,341,877
Managed Health Care–1.50%
Aetna Inc.		55,485		1,692,847
Aveta, Inc.(b)(e)		157,251		943,506
				2,636,353
Metal & Glass Containers–1.42%
Crown Holdings, Inc.(b)		74,688		2,493,085
Oil & Gas Equipment & Services–1.81%
Oil States International, Inc.(b)		21,533		1,380,050
Weatherford International Ltd.(b)		78,930		1,799,604
				3,179,654
Oil & Gas Exploration & Production–5.46%
Concho Resources Inc.(b)		36,446		3,195,221
Continental Resources, Inc.(b)		36,870		2,169,799
Oasis Petroleum Inc.(b)		62,580		1,697,170
Pioneer Natural Resources Co.		29,153		2,531,063
				9,593,253
Packaged Foods & Meats–1.24%
Hershey Co. (The)		46,160		2,176,444
Pharmaceuticals–1.07%
Shire PLC–ADR (United Kingdom)		25,942		1,877,682
Precious Metals & Minerals–0.25%
Stillwater Mining Co.(b)		20,539		438,508
Property & Casualty Insurance–0.82%
Assured Guaranty Ltd.		81,212		1,437,452
Publishing–1.17%
McGraw-Hill Cos., Inc. (The)		56,541		2,058,658
Real Estate Services–1.34%
CB Richard Ellis Group, Inc.–Class A(b)		115,122		2,357,699
Research & Consulting Services–1.49%
IHS Inc.–Class A(b)		32,507		2,613,238
Restaurants–1.16%
Darden Restaurants, Inc.		43,981		2,042,478
Security & Alarm Services–0.94%
Corrections Corp. of America(b)		66,133		1,657,293
Semiconductor Equipment–2.07%
Lam Research Corp.(b)		34,458		1,784,235
Teradyne, Inc.(b)		132,501		1,860,314
				3,644,549
Semiconductors–4.33%
Altera Corp.		31,260		1,112,231
Avago Technologies Ltd. (Singapore)(b)		77,060		2,193,898
Broadcom Corp.–Class A		23,890		1,040,410
Cavium Networks, Inc.(b)		43,234		1,629,057
Marvell Technology Group Ltd.(b)		88,469		1,641,100
				7,616,696
Specialized Finance–1.22%
Moody’s Corp.		80,654		2,140,557
Specialty Chemicals–2.95%
Albemarle Corp.		49,398		2,755,420
Lubrizol Corp. (The)		7,993		854,292

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Capital Development Fund

	Shares		Value
Specialty Chemicals–(continued)
LyondellBasell Industries N.V.–Class A (Netherlands)(b)		45,655	$	1,570,532
				5,180,244
Specialty Stores–1.11%
Ulta Salon, Cosmetics & Fragrance, Inc.(b)		57,482		1,954,388
Systems Software–2.68%
Check Point Software Technologies Ltd. (Israel)(b)		43,639		2,018,740
Rovi Corp.(b)		43,297		2,684,847
				4,703,587
Technology Distributors–1.37%
Avnet, Inc.(b)		46,306		1,529,487
Tech Data Corp.(b)		20,049		882,557
				2,412,044
Trading Companies & Distributors–2.29%
MSC Industrial Direct Co., Inc.–Class A		27,678		1,790,490
W.W. Grainger, Inc.		6,393		882,937
WESCO International, Inc.(b)		25,566		1,349,885
				4,023,312
Trucking–1.94%
J.B. Hunt Transport Services, Inc.		56,071		2,288,258
Swift Transportation Co.(b)		89,653		1,121,559
				3,409,817
Wireless Telecommunication Services–1.56%
American Tower Corp.–Class A(b)		37,006		1,910,990
Millicom International Cellular S.A. (Luxembourg)		8,640		825,984
				2,736,974
Total Common Stocks & Other Equity Interests (Cost $127,213,006)				172,541,071
Money Market Funds–2.29%
Liquid Assets Portfolio–Institutional Class(f)		2,012,640		2,012,640
Premier Portfolio–Institutional Class(f)		2,012,640		2,012,640
Total Money Market Funds (Cost $4,025,280)				4,025,280
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.46% (Cost $131,238,286)				176,566,351
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–1.29%
Liquid Assets Portfolio–Institutional Class (Cost $2,263,765)(f)(g)		2,263,765		2,263,765
TOTAL INVESTMENTS–101.75% (Cost $133,502,051)				178,830,116
OTHER ASSETS LESS LIABILITIES–(1.75%)				(3,083,062	)
NET ASSETS–100.00%			$	175,747,054

Investment Abbreviations:

ADR	– American Depositary Receipt
Wts.	– Warrants

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	Non-income producing security acquired through a corporate action.
(d)	All or a portion of this security was out on loan at December 31, 2010.
(e)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2010 was $2,528,646, which represented 1.44% of the Fund’s Net Assets.
(f)	The money market fund and the Fund are affiliated by having the same investment adviser.
(g)	The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1I.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Capital Development Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $127,213,006)*	$	172,541,071
Investments in affiliated money market funds, at value and cost		6,289,045
Total investments, at value (Cost $133,502,051)		178,830,116
Foreign currencies, at value (Cost $99)		123
Receivable for:
Fund shares sold		7,795
Dividends		60,407
Investment for trustee deferred compensation and retirement plans		32,645
Total assets		178,931,086
Liabilities:
Payable for:
Investments purchased		441,619
Fund shares reacquired		118,772
Collateral upon return of securities loaned		2,263,765
Accrued fees to affiliates		267,681
Accrued other operating expenses		37,388
Trustee deferred compensation and retirement plans		54,807
Total liabilities		3,184,032
Net assets applicable to shares outstanding	$	175,747,054
Net assets consist of:
Shares of beneficial interest	$	183,904,337
Undistributed net investment income (loss)		(51,861	)
Undistributed net realized gain (loss)		(53,433,510	)
Unrealized appreciation		45,328,088
	$	175,747,054
Net Assets:
Series I	$	82,664,942
Series II	$	93,082,112
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		6,164,223
Series II		7,150,126
Series I:
Net asset value per share	$	13.41
Series II:
Net asset value per share	$	13.02

*  At December 31, 2010, securities with an aggregate value of $2,204,388 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $5,799)	$	1,573,408
Dividends from affiliated money market funds (includes securities lending income of $13,168)		24,411
Total investment income		1,597,819
Expenses:
Advisory fees		1,278,105
Administrative services fees		466,901
Custodian fees		13,651
Distribution fees:
Series II		227,652
Transfer agent fees		30,430
Trustees’ and officers’ fees and benefits		19,993
Other		52,772
Total expenses		2,089,504
Less: Fees waived and expense offset arrangement(s)		(21,030	)
Net expenses		2,068,474
Net investment income (loss)		(470,655	)
Realized and unrealized gain from:
Net realized gain from:
Investment securities (includes net gains from securities sold to affiliates of $634,076)		23,138,004
Foreign currencies		4,938
		23,142,942
Change in net unrealized appreciation of:
Investment securities		5,835,960
Foreign currencies		23
		5,835,983
Net realized and unrealized gain		28,978,925
Net increase in net assets resulting from operations	$	28,508,270

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Capital Development Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income (loss)	$	(470,655	)	$	(859,030	)
Net realized gain (loss)		23,142,942			(13,261,728	)
Change in net unrealized appreciation		5,835,983			69,400,458
Net increase in net assets resulting from operations		28,508,270			55,279,700
Share transactions–net:
Series I		(12,617,550	)		(5,484,404	)
Series II		(16,250,389	)		(16,147,547	)
Net increase (decrease) in net assets resulting from share transactions		(28,867,939	)		(21,631,951	)
Net increase (decrease) in net assets		(359,669	)		33,647,749
Net assets:
Beginning of year		176,106,723			142,458,974
End of year (includes undistributed net investment income (loss) of $(51,861) and $(49,367), respectively)	$	175,747,054		$	176,106,723

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Capital Development Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market

Invesco V.I. Capital Development Fund

	quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these

Invesco V.I. Capital Development Fund

	arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $350 million		0	.75%
Over $350 million		0	.625%

  Through at least April 30, 2012, the Adviser has contractually agreed to waive advisory fees to the extent necessary so that the advisory fees payable by the Fund (based on the Fund’s average daily net assets) do not exceed the annual rate of:

Average Net Assets	Rate
First $250 million		0	.745%
Next $250 million		0	.73%
Next $500 million		0	.715%
Next $1.5 billion		0	.70%
Next $2.5 billion		0	.685%
Next $2.5 billion		0	.67%
Next $2.5 billion		0	.655%
Over $10 billion		0	.64%

Invesco V.I. Capital Development Fund

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $20,923.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $416,901 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. 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.

Invesco V.I. Capital Development Fund

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	176,301,470	$	943,506	$	1,585,140	$	178,830,116

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $8,168,620 and securities sales of $3,024,129, which resulted in net realized gains of $634,076.

NOTE 5—Expense Offset Arrangement(s)

The expense offset arrangement is comprised of custodian credits which result from periodic overnight cash balances at the custodian. For the year ended December 31, 2010, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $107.

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $2,884 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 7—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

There were no ordinary income or long-term cpaital gain distributions paid during the years ended December 31, 2010 and 2009.

Tax Components of Net Assets at Period-End:

	2010
Net unrealized appreciation — investments	$	45,129,547
Net unrealized appreciation — other investments		23
Temporary book/tax differences		(51,861	)
Capital loss carryforward		(53,234,992	)
Shares of beneficial interest		183,904,337
Total net assets	$	175,747,054

  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 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.

Invesco V.I. Capital Development Fund

  The Fund utilized $23,064,574 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	26,776,236
December 31, 2017		26,458,756
Total capital loss carryforward	$	53,234,992

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $128,645,477 and $156,200,896, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	48,087,242
Aggregate unrealized (depreciation) of investment securities		(2,957,695	)
Net unrealized appreciation of investment securities	$	45,129,547
Cost of investments for tax purposes is $133,700,569.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of net operating losses, on December 31, 2010, undistributed net investment income (loss) was increased by $468,161, undistributed net realized gain (loss) was decreased by $3,857 and shares of beneficial interest decreased by $464,304. This reclassification had no effect on the net assets of the Fund.

NOTE 11—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		985,705		$	11,570,756			2,458,503		$	21,351,970
Series II		838,860			9,669,323			1,455,369			12,521,899
Reacquired:
Series I		(2,070,684	)		(24,188,306	)		(3,021,088	)		(26,836,374	)
Series II		(2,263,580	)		(25,919,712	)		(3,276,615	)		(28,669,446	)
Net increase (decrease) in share activity		(2,509,699	)	$	(28,867,939	)		(2,383,831	)	$	(21,631,951	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 72% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Capital Development Fund

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																						Ratio of			Ratio of
						Net gains																expenses			expenses
						(losses)																to average			to average net			Ratio of net
	Net asset		Net			on securities						Distributions										net assets			assets without			investment
	value,		investment			(both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income			realized and			investment			realized			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)			unrealized)			operations			gains			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/10	$	11.29	$	(0.02	)(c)	$	2.14		$	2.12		$	—		$	13.41		18.78	%	$	82,665		1.08	%(d)		1.09	%(d)		(0.14	)%(d)		79	%
Year ended 12/31/09		7.93		(0.04	)(c)		3.40			3.36			—			11.29		42.37			81,866		1.10			1.11			(0.41	)		102
Year ended 12/31/08		18.85		(0.05	)(c)		(8.88	)		(8.93	)		(1.99	)		7.93		(47.03	)		61,986		1.10			1.11			(0.38	)		99
Year ended 12/31/07		18.43		(0.10	)(c)		2.14			2.04			(1.62	)		18.85		10.84			149,776		1.05			1.06			(0.47	)		109
Year ended 12/31/06		16.09		(0.07	)		2.73			2.66			(0.32	)		18.43		16.52			148,668		1.08			1.09			(0.48	)		119
Series II
Year ended 12/31/10		10.99		(0.04	)(c)		2.07			2.03			—			13.02		18.47			93,082		1.33	(d)		1.34	(d)		(0.39	)(d)		79
Year ended 12/31/09		7.74		(0.06	)(c)		3.31			3.25			—			10.99		41.99			94,241		1.35			1.36			(0.66	)		102
Year ended 12/31/08		18.53		(0.09	)(c)		(8.71	)		(8.80	)		(1.99	)		7.74		(47.13	)		80,473		1.35			1.36			(0.63	)		99
Year ended 12/31/07		18.19		(0.15	)(c)		2.11			1.96			(1.62	)		18.53		10.55			190,815		1.30			1.31			(0.72	)		109
Year ended 12/31/06		15.92		(0.10	)		2.69			2.59			(0.32	)		18.19		16.26			128,990		1.33			1.34			(0.73	)		119

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Calculated using average shares outstanding.
(d)	Ratios are based on average daily net assets (000’s) of $79,353 and $91,061 for Series I and Series II shares, respectively.

NOTE 13—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would acquire all of the assets and liabilities of Invesco V.I. Dynamics Fund (the “Target Fund”) in exchange for shares of the Fund. The Agreement requires approval of the Target Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

Invesco V.I. Capital Development Fund

NOTE 12—Financial Highlights—(continued)

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Capital Development Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Capital Development Fund (formerly known as AIM V.I. Capital Development Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Capital Development Fund

NOTE 12—Financial Highlights—(continued)

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,268.70	$	6.23	$	1,019.71	$	5.55		1.09	%
Series II		1,000.00		1,267.80		7.66		1,018.45		6.82		1.34

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Capital Development Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Core Equity Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VICEQ-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2010, Invesco V.I. Core Equity Fund lagged the broad market, as measured by the S&P 500 Index, as well as the Fund’s style-specific benchmark, the Russell 1000 Index. The Fund’s comparative results were largely attributable to a significant underweight in the consumer discretionary sector and an overweight in the health care sector versus the benchmark. The Fund’s large cash weighting also acted as a drag on returns in a rising market. Top contributors to the Fund’s absolute return were holdings in the energy, financials, industrials and information technology (IT) sectors, while the largest detractor was the health care sector.

Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	9.56	%
Series II Shares	9.25
The S&P 500 Index▼ (Broad Market Index)	15.08
Russell 1000 Index▼ (Style-Specific Index)	16.10
Lipper VUF Large-Cap Core Funds Index▼ (Peer Group Index)	13.43

^▼ Liper Inc.

How we invest

We seek to manage your Fund as what we term a “Conservative Cornerstone” – a stable foundational component within a well-diversified portfolio of assets that provides attractive upside participation during buoyant equity markets and stronger downside protection during weak equity markets. As part of a well-diversi-fied asset allocation strategy, the Fund is intended to complement more aggressive or cyclical investment strategies.

     We conduct thorough fundamental research of companies and their businesses to gain a deeper understanding of their prospects, growth potential and return on invested capital (ROIC) characteristics. The process we use to identify potential investments for the Fund includes three phases: financial analysis, business analysis and valuation analysis.

     Financial analysis provides insights

into historical returns on invested capital, a key indicator of business quality, and historical capital allocation, a key indicator of management quality. Business analysis, which evaluates the competitive landscape and any structural or cyclical business opportunities or threats, allows us to identify key revenue, profit and return drivers of the company. Both the financial and business analyses serve as a basis to construct valuation models that help us appraise a company’s intrinsic worth. In our valuation analysis, we use three primary techniques, including discounted cash flow, traditional valuation multiples and net asset value.

     We consider selling a stock when it exceeds our target price, we have not seen a demonstrable improvement in fundamentals, or a more compelling investments opportunity exists.

Market conditions and your Fund

Equity markets fluctuated during the fiscal year as investors weighed the competing issues of solid corporate profits and soft macroeconomic data. Corporate earnings were largely positive but often were overshadowed by concerns about high unemployment, lack of consumer spending, soft housing data and the possibility of additional U.S. Federal Reserve (the Fed) accommodation. After rising through April, the major equity indexes sold off precipitously in May as the sovereign debt crisis unfolded in the eurozone. Meanwhile U.S. economic indicators remained weak, prompting concerns of a double-dip recession. Uncertainty created by the debt crisis, combined with subdued employment, consumer spending and housing data added to concerns that the recovery was slowing to a sub-normal growth rate. Just as abruptly, however, markets reversed course and rallied again during the last four months of the year on better economic news, ending the fiscal year with double-digit gains.

     All 10 sectors of the S&P 500 Index posted gains for the year. The more economically sensitive sectors such as consumer discretionary, industrials and materials had the highest returns, while the less economically sensitive sectors such as health care and utilities had some of the lowest returns.

     During the year, our IT holdings were a source of strength on an absolute basis for the Fund, and QUALCOMM, which manufactures processor chips used in mobile handset devices, was the largest contributor to returns. The company reported solid results during the year due to higher demand for its products and better pricing power. In addition, cost-cutting measures helped the company achieve stronger operating margins.

Portfolio Composition

By sector

Information Technology	18.0	%
Health Care	15.3
Financials	13.4
Industrials	13.4
Energy	11.9
Consumer Staples	8.8
Consumer Discretionary	5.4
Telecommunication Services	2.3
Utilities	2.2
Materials	1.8
Money Market Funds Plus Other Assets
Less Liabilities	7.5

Top 10 Equity Holdings*

1.	Symantec Corp.	2.9	%
2.	CVS Caremark Corp.	2.9
3.	Progressive Corp. (The)	2.9
4.	Baker Hughes Inc.	2.6
5.	American Express Co.	2.6
6.	QUALCOMM, Inc.	2.5
7.	Kroger Co. (The)	2.5
8.	ITT Corp.	2.4
9.	Berkshire Hathaway, Inc.- Class A	2.4
10.	Microsoft Corp.	2.4

Top Five Industries

1.	Communications Equipment	6.6	%
2.	Pharmaceuticals	5.4
3.	Systems Software	5.4
4.	Aerospace & Defense	5.3
5.	Property & Casualty Insurance	5.3

Total Net Assets	$1.4 billion
Total Number of Holdings*		71

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.

Invesco V.I. Core Equity Fund

     Oilfield services company BJ Services was another strong contributor to results. The company’s merger with Baker Hughes was finalized in the second quarter of 2010. We held our shares of the company through the end of the acquisition, and we are also retaining a position in Baker Hughes.

     Holdings in the financials sector also enhanced the Fund’s results for the year, with Progressive and Berkshire Hathaway among top contributors. Progressive, a low-cost provider of auto and specialty insurance serving private and commercial markets, is a long-term Fund holding that we purchased several years ago when we began to see an improvement in pricing power in the auto insurance industry. At the time, however, the market had penalized the company for a new initiative to grow and retain its client base, while increasing spending on marketing and advertising. The initiative would have lowered near-term profits, which depressed the stock. This near-term focus was, in our view, shortsighted, and we believed the company was still a leading innovator in the auto insurance business with a solid track record of profitability, growth and returns on shareholder equity. Since we purchased the stock, investors have begun recognizing the company’s inherent value. The stock traded higher following a solid first quarter in 2010, and it remained at elevated levels for much of the period.

     A number of the Fund’s key return detractors were concentrated in the health care sector, including medical device maker Boston Scientific, and Gilead Sciences, a biotechnology firm. Early in the year, Boston Scientific reported disappointing earnings results due to eroding profit margins, and management reduced its growth outlook for 2010 as a result. In addition, sales for one of the firm’s ICD (implantable cardioverter-defibrillator) devices were halted during the period, thus weighing on the company’s stock price. The sales stoppage, however, was not related to efficacy or safety, but rather to the mishandling of a Food and Drug Administration application for a change to its manufacturing process. Though the issue was subsequently resolved, the controversy created by this action negatively affected the stock.

     Another detractor from Fund results was Apollo Group, a for-profit education provider whose businesses include the widely known University of Phoenix. The company and its peers have been under

pressure as Congressional leaders turned a critical eye on the for-profit education industry due to the outsized share of government education funds that it receives. The industry has also come under scrutiny for its comparatively low graduation rates, and government officials have called for increased regulatory oversight of the industry. We eliminated this position during the year.

     Over the year, our cash weighting fluctuated as market volatility allowed us to buy on weakness and sell on strength. Markets rallied sharply in the first half of the year, providing us an opportunity to take profits; however, as market volatility increased over the summer, we used the opportunity to upgrade our portfolio by investing in high-quality companies that we believed were unduly punished. During the year we increased our exposure to the consumer discretionary, energy, industrials and utilities sectors, and reduced exposure to health care and IT. Our above-average cash position benefited the Fund during the market downturn and moderated returns during rallies.

     Maintaining a conservative approach is an enduring part of our investment strategy. During the market’s volatility, we sought judicious long-term investments in high-quality businesses. At the end of the year, the Fund’s largest sector weightings were in IT, health care, financials and industrials.

     Over the past year, we witnessed significant dissonance in the market between strong corporate earnings and weak or erratic macroeconomic data. However, at some point during this period, we believe we reached a crossroads in the current market cycle: In our view, we have likely entered a phase in which the economy is transitioning from recovery to possible expansion, or at least, economic sustainability. Historically, as part of these transitions, market leadership typically shifts from early cycle to late-cycle companies where profit stability, earnings visibility and positive – albeit modest – growth are favored. We believe this transition created good opportunities for investors to upgrade the quality of their equity exposure.

     Regardless of market conditions, our goal remains the same: To serve as a conservative cornerstone for our shareholders’ portfolios, seeking to provide upside participation with downside protection, so that over a full-market cycle the Fund has the potential to deliver solid investment results with reduced risk.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Ronald Sloan
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Core Equity Fund. Mr. Sloan has worked in the investment industry since 1971 and joined Invesco in 1998. Mr. Sloan attended the University of Missouri, where he earned both a B.S. in business administration and an M.B.A.

Tyler Dann II
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Core Equity Fund. Mr. Dann joined Invesco in 2004. He serves on the board of directors of the National Association of Petroleum Investment Analysts and is a member of the CFA Society of San Francisco. He earned an A.B. from Princeton University.

Brian Nelson
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Core Equity Fund. He began his investment career in 1988 and joined Invesco in 2004. He earned a B.A. from the University of California-Santa Barbara and is a member of the CFA Society of San Francisco.

Assisted by the Invesco U.S. Core Equity Team

Invesco V.I. Core Equity Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 4/30/94, Fund data from 5/2/94

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a

doubling, or 100% change, in the value of the investment. In other words, the space between $$5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (5/2/94)			7.63	%
	10	Years	1.43
	5	Years	4.38
	1	Year	9.56
Series II Shares
	10	Years	1.18	%
	5	Years	4.12
	1	Year	9.25

Series II shares incepted on October 24, 2001. Performance shown prior to that date is that of Series I shares, restated to reflect the higher 12b-1 fees applicable to Series II. Series I performance reflects any applicable fee waivers or expense reimbursements. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot

guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.92% and 1.17%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Core Equity Fund, a series portfolio of AIM Variable

Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

Invesco V.I. Core Equity Fund

Invesco V.I. Core Equity Fund’s investment objective is long-term growth of capital.

§	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
§	Unless otherwise noted, all data provided by Invesco.
§	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

     The Fund’s foreign investments may be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     Holding cash or cash equivalents may negatively affect performance.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

     An investment by the Fund in ETFs generally presents the same primary risks as an investment in a mutual fund. In addition, ETFs may be subject to the following: a discount of the ETF’s shares to its net asset value; failure to develop an active trading market for the ETF’s shares; the listing exchange halting trading of the ETF’s shares; failure of the ETF’s shares to track the referenced index; and holding troubled securities in the referenced index. ETFs may involve duplication of management fees and certain other expenses, as the Fund indirectly bears its proportionate share of any expenses paid by the ETFs in which it invests. Further, certain of the ETFs in which each Fund may invest are leveraged. The more a Fund invests in such leveraged ETFs, the more this leverage will magnify any losses on those investments.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Russell 1000^®Index is an unmanaged index considered representative of large-cap stocks. The Russell 1000 Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Lipper VUF Large-Cap Core Funds Index is an unmanaged index considered representative of large-cap core variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Core Equity Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–92.52%
Aerospace & Defense–5.33%
ITT Corp.		632,365	$	32,952,540
Lockheed Martin Corp.		121,864		8,519,512
Northrop Grumman Corp.		384,234		24,890,679
United Technologies Corp.		91,102		7,171,549
				73,534,280
Agricultural Products–0.96%
Archer-Daniels-Midland Co.		441,202		13,271,356
Air Freight & Logistics–0.67%
United Parcel Service, Inc.–Class B		126,674		9,193,999
Application Software–0.66%
Adobe Systems Inc.(b)		297,097		9,144,646
Asset Management & Custody Banks–3.41%
Legg Mason, Inc.		760,314		27,576,589
Northern Trust Corp.		350,584		19,425,859
				47,002,448
Automobile Manufacturers–0.65%
General Motors Co.(b)		244,981		9,030,000
Biotechnology–1.63%
Genzyme Corp.(b)		86,103		6,130,534
Gilead Sciences, Inc.(b)		452,592		16,401,934
				22,532,468
Cable & Satellite–1.17%
Comcast Corp.–Class A		736,998		16,191,846
Communications Equipment–6.58%
Cisco Systems, Inc.(b)		484,648		9,804,429
Motorola Solutions, Inc.(b)		2,983,934		27,064,281
Nokia Oyj–ADR (Finland)		1,850,989		19,102,207
QUALCOMM, Inc.		704,369		34,859,222
				90,830,139
Construction Materials–0.26%
CRH PLC (Ireland)		174,084		3,607,900
Consumer Finance–2.55%
American Express Co.		820,584		35,219,465
Data Processing & Outsourced Services–0.94%
Automatic Data Processing, Inc.		281,587		13,031,846
Department Stores–1.16%
Macy’s, Inc.		632,904		16,012,471
Diversified Banks–0.73%
U.S. Bancorp.		374,728		10,106,414
Drug Retail–3.57%
CVS Caremark Corp.		1,155,594		40,180,003
Walgreen Co.		235,235		9,164,756
				49,344,759
Electric Utilities–2.25%
Edison International		232,263		8,965,352
Exelon Corp.		531,365		22,126,038
				31,091,390
Electrical Components & Equipment–0.51%
Emerson Electric Co.		122,623		7,010,357
Electronic Manufacturing Services–1.47%
Tyco Electronics Ltd. (Switzerland)		571,169		20,219,383
Environmental & Facilities Services–1.30%
Waste Management, Inc.		487,966		17,991,306
Food Retail–2.52%
Kroger Co. (The)		1,557,128		34,817,382
Health Care Equipment–4.95%
Baxter International Inc.		315,000		15,945,300
Boston Scientific Corp.(b)		3,576,722		27,075,786
Covidien PLC (Ireland)		555,488		25,363,582
				68,384,668
Heavy Electrical Equipment–0.50%
ABB Ltd.–ADR (Switzerland)(b)		306,024		6,870,239
Home Improvement Retail–1.98%
Lowe’s Cos., Inc.		1,091,085		27,364,412
Hypermarkets & Super Centers–0.74%
Wal-Mart Stores, Inc.		189,844		10,238,287
Industrial Conglomerates–2.72%
General Electric Co.		500,773		9,159,138
Koninklijke (Royal) Philips Electronics N.V. (Netherlands)		137,868		4,225,149
Tyco International Ltd.		581,701		24,105,689
				37,489,976
Industrial Gases–1.50%
Air Products & Chemicals, Inc.		227,681		20,707,587
Industrial Machinery–0.84%
Illinois Tool Works Inc.		216,147		11,542,250
Insurance Brokers–1.05%
Marsh & McLennan Cos., Inc.		529,649		14,480,604

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Core Equity Fund

	Shares		Value
Integrated Oil & Gas–1.06%
ConocoPhillips		112,425	$	7,656,142
Exxon Mobil Corp.		94,817		6,933,019
				14,589,161
Investment Banking & Brokerage–0.45%
Charles Schwab Corp. (The)		366,600		6,272,526
Life Sciences Tools & Services–3.02%
Agilent Technologies, Inc.(b)		471,727		19,543,650
Thermo Fisher Scientific, Inc.(b)		399,814		22,133,703
				41,677,353
Managed Health Care–1.67%
WellPoint Inc.(b)		406,398		23,107,790
Oil & Gas Equipment & Services–4.26%
Baker Hughes Inc.		630,462		36,043,513
Schlumberger Ltd.		193,772		16,179,962
Tenaris S.A.–ADR (Argentina)(c)		135,638		6,643,549
				58,867,024
Oil & Gas Exploration & Production–3.26%
Apache Corp.		252,203		30,070,164
Devon Energy Corp.		134,651		10,571,450
Southwestern Energy Co.(b)		116,882		4,374,893
				45,016,507
Oil & Gas Refining & Marketing–1.31%
Valero Energy Corp.		783,303		18,109,965
Oil & Gas Storage & Transportation–2.00%
Williams Cos., Inc. (The)		1,118,698		27,654,215
Packaged Foods & Meats–0.98%
Kraft Foods, Inc.–Class A		427,241		13,462,364
Pharmaceuticals–5.40%
Johnson & Johnson		178,835		11,060,945
Pfizer, Inc.		1,188,808		20,816,028
Roche Holding AG (Switzerland)		194,381		28,515,041
Teva Pharmaceutical Industries Ltd.–ADR (Israel)		271,370		14,146,518
				74,538,532
Property & Casualty Insurance–5.26%
Berkshire Hathaway, Inc.–Class A(b)		272		32,762,400
Progressive Corp. (The)		2,005,996		39,859,140
				72,621,540
Railroads–1.57%
Union Pacific Corp.		233,511		21,637,129
Semiconductors–1.61%
Intel Corp.		307,264		6,461,762
Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan)		6,485,823		15,717,036
				22,178,798
Specialty Stores–0.46%
Staples, Inc.		280,766		6,393,042
Systems Software–5.35%
CA, Inc.		35,319		863,196
Microsoft Corp.		1,165,405		32,538,108
Symantec Corp.(b)		2,419,219		40,497,726
				73,899,030
Wireless Telecommunication Services–2.26%
Vodafone Group PLC (United Kingdom)		11,954,877		31,141,018
Total Common Stocks & Other Equity Interests (Cost $1,114,238,001)				1,277,427,872
Money Market Funds–7.53%
Liquid Assets Portfolio–Institutional Class(d)		51,997,004		51,997,004
Premier Portfolio–Institutional Class(d)		51,997,004		51,997,004
Total Money Market Funds (Cost $103,994,008)				103,994,008
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.05% (Cost $1,218,232,009)				1,381,421,880
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–0.37%
Liquid Assets Portfolio–Institutional Class (Cost $5,111,832)(d)(e)		5,111,832		5,111,832
TOTAL INVESTMENTS–100.42% (Cost $1,223,343,841)				1,386,533,712
OTHER ASSETS LESS LIABILITIES–(0.42)%				(5,850,928	)
NET ASSETS–100.00%			$	1,380,682,784

Investment Abbreviations:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	All or a portion of this security was out on loan at December 31, 2010.
(d)	The money market fund and the Fund are affiliated by having the same investment adviser.
(e)	The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1J.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Core Equity Fund

Statement of Assets and Liabilities

For the year ended December 31, 2010

Assets:
Investments, at value (Cost $1,114,238,001)*	$	1,277,427,872
Investments in affiliated money market funds, at value and cost		109,105,840
Total investments, at value (Cost $1,223,343,841)		1,386,533,712
Foreign currencies, at value (Cost $486,709)		533,359
Receivables for:
Fund shares sold		107,830
Dividends		1,900,585
Investment for trustee deferred compensation and retirement plans		139,964
Other assets		1,044
Total assets		1,389,216,494
Liabilities:
Payables for:
Fund shares reacquired		1,213,103
Foreign currency contracts outstanding		50,646
Collateral upon return of securities loaned		5,111,832
Accrued fees to affiliates		1,643,577
Accrued other operating expenses		94,086
Trustee deferred compensation and retirement plans		420,466
Total liabilities		8,533,710
Net assets applicable to shares outstanding	$	1,380,682,784
Net assets consist of:
Shares of beneficial interest	$	1,423,990,339
Undistributed net investment income		11,218,757
Undistributed net realized gain (loss)		(217,724,078	)
Unrealized appreciation		163,197,766
	$	1,380,682,784
Net Assets:
Series I	$	1,345,657,656
Series II	$	35,025,128
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		49,784,286
Series II		1,305,691
Series I:
Net asset value per share	$	27.03
Series II:
Net asset value per share	$	26.82

*  At December 31, 2010, securities with an aggregate value of $4,982,637 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $524,618)	$	23,788,219
Dividends from affiliated money market funds (includes securities lending income of $130,819)		391,853
Total investment income		24,180,072
Expenses:
Advisory fees		8,455,331
Administrative services fees		3,630,908
Custodian fees		84,029
Distribution fees — Series II		86,917
Transfer agent fees		81,026
Trustees’ and officers’ fees and benefits		55,187
Other		102,110
Total expenses		12,495,508
Less: Fees waived		(325,026	)
Net expenses		12,170,482
Net investment income		12,009,590
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains (losses) from securities sold to affiliates of $(2,573,609))		43,992,550
Foreign currencies		(382,715	)
Foreign currency contracts		1,564,960
		45,174,795
Change in net unrealized appreciation (depreciation) of:
Investment securities		66,185,831
Foreign currencies		2,917
Foreign currency contracts		(729,917	)
		65,458,831
Net realized and unrealized gain		110,633,626
Net increase in net assets resulting from operations	$	122,643,216

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Core Equity Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	12,009,590		$	12,984,133
Net realized gain(loss)		45,174,795			(118,861,783	)
Change in net unrealized appreciation		65,458,831			445,880,351
Net increase in net assets resulting from operations		122,643,216			340,002,701
Distributions to shareholders from net investment income:
Series I		(12,902,647	)		(23,923,292	)
Series II		(280,002	)		(459,176	)
Total distributions from net investment income		(13,182,649	)		(24,382,468	)
Share transactions–net:
Series I		(217,887,519	)		(182,712,672	)
Series II		(1,987,933	)		4,143,838
Net increase (decrease) in net assets resulting from share transactions		(219,875,452	)		(178,568,834	)
Net increase (decrease) in net assets		(110,414,885	)		137,051,399
Net assets:
Beginning of year		1,491,097,669			1,354,046,270
End of year (includes undistributed net investment income of $11,218,757 and $12,774,531, respectively)	$	1,380,682,784		$	1,491,097,669

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Core Equity Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as

Invesco V.I. Core Equity Fund

	institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the

Invesco V.I. Core Equity Fund

	financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.65%
Over $250 million		0	.60%

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 1.30%

Invesco V.I. Core Equity Fund

and Series II shares to 1.45% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $325,026.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $329,329 for accounting and fund administrative services and reimbursed $3,301,579 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2			Level 3		Total
Equity Securities	$	1,355,392,694	$	31,141,018		$	—	$	1,386,533,712
Foreign Currency Contracts*		—		(50,646	)		—		(50,646	)
Total Investments	$	1,355,392,694	$	31,090,372		$	—	$	1,386,483,066

*  Unrealized appreciation (depreciation).

Invesco V.I. Core Equity Fund

NOTE 4—Derivative Investments

The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Value of Derivative Instruments at Period-End

The table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2010:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Currency risk(a)
Foreign Currency Contracts(a)	$	—	$	(50,646	)

^(a) Values are disclosed on the Statement of Assets and Liabilities under the foreign currency contracts outstanding.

Effect of Derivative Instruments for the year ended December 31, 2010

The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on
	Statement of Operations
	Foreign Currency Contracts*
Realized Gain
Currency Risk	$	1,564,960
Change in Unrealized Appreciation (Depreciation)
Currency Risk		(729,917	)
Total	$	835,043

*  The average value of foreign currency contracts outstanding during the period was $13,598,708.

Open Foreign Currency Contracts
								Unrealized
Settlement		Contract to						Appreciation
Date	Counterparty	Deliver		Receive		Value		(Depreciation)
03/03/11	Citibank Capital	GPB	9,900,000	USD	15,384,402	$	15,435,048	$	(50,646	)

Currency Abbreviations:
GBP	– British Pound Sterling
USD	– U.S. Dollar

NOTE 5—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $8,514,122 and securities sales of $33,752,163, which resulted in net realized gains (losses) of $(2,573,609).

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $5,977 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

Invesco V.I. Core Equity Fund

NOTE 7—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	13,182,649	$	24,382,468

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	11,625,655
Net unrealized appreciation — investments		155,702,721
Net unrealized appreciation — other investments		58,541
Temporary book/tax differences		(406,899	)
Capital loss carryforward		(210,287,573	)
Shares of beneficial interest		1,423,990,339
Total net assets	$	1,380,682,784

  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 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 utilized $44,632,595 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2011	$	21,217,854
December 31, 2017		189,069,719
Total capital loss carryforward	$	210,287,573

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. To the extent that unrealized gains as of May 1, 2006, the date of the reorganization of AIM V.I. Core Stock Fund and AIM V.I. Premier Equity Fund, into the Fund, are realized on securities held in each Fund at such date, the capital loss carryforward may be further limited for up to five years from the date of the reorganization.

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $556,780,658 and $669,813,232, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	198,527,191
Aggregate unrealized (depreciation) of investment securities		(42,824,470	)
Net unrealized appreciation of investment securities	$	155,702,721
Cost of investments for tax purposes is $1,230,830,991.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforward, on December 31, 2010, undistributed net investment income was decreased by $382,715, undistributed net realized gain (loss) was increased by $112,934,587 and shares of beneficial interest decreased by $112,551,872. This reclassification had no effect on the net assets of the Fund.

Invesco V.I. Core Equity Fund

NOTE 11—Share Information

	Summary of Share Activity
	Years ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		1,698,343		$	42,098,514			3,599,291		$	75,638,826
Series II		351,173			8,756,793			497,105			10,793,298
Issued as reinvestment of dividends:
Series I		519,430			12,902,647			975,664			23,923,292
Series II		11,350			280,003			18,850			459,176
Reacquired:
Series I		(10,899,313	)		(272,888,680	)		(13,469,940	)		(282,274,790	)
Series II		(441,967	)		(11,024,729	)		(348,530	)		(7,108,636	)
Net increase (decrease) in share activity		(8,760,984	)	$	(219,875,452	)		(8,727,560	)	$	(178,568,834	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 55% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Core Equity Fund

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																								Ratio of			Ratio of
																								expenses			expenses
					Net gains																			to average			to average net			Ratio of net
	Net asset				(losses) on						Dividends													net assets			assets without			investment
	value,		Net		securities (both			Total from			from net						Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		investment		realized and			investment			investment			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			Distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	24.92	$	0.22	$	2.14		$	2.36		$	(0.25	)	$	(0.25	)	$	27.03		9.56	%	$	1,345,658		0.87	%(d)		0.89	%(d)		0.87	%(d)		47	%
Year ended 12/31/09		19.75		0.19		5.39			5.58			(0.41	)		(0.41	)		24.92		28.30			1,456,822		0.88			0.90			0.96			21
Year ended 12/31/08		29.11		0.33		(9.11	)		(8.78	)		(0.58	)		(0.58	)		19.75		(30.14	)		1,330,161		0.89			0.90			1.26			36
Year ended 12/31/07		27.22		0.42		1.80			2.22			(0.33	)		(0.33	)		29.11		8.12			2,298,007		0.87			0.88			1.44			45
Year ended 12/31/06		23.45		0.34		3.58			3.92			(0.15	)		(0.15	)		27.22		16.70			2,699,252		0.89			0.89			1.35			45
Series II
Year ended 12/31/10		24.75		0.15		2.12			2.27			(0.20	)		(0.20	)		26.82		9.25			35,025		1.12	(d)		1.14	(d)		0.62	(d)		47
Year ended 12/31/09		19.62		0.14		5.34			5.48			(0.35	)		(0.35	)		24.75		27.98			34,275		1.13			1.15			0.71			21
Year ended 12/31/08		28.88		0.26		(9.02	)		(8.76	)		(0.50	)		(0.50	)		19.62		(30.32	)		23,885		1.14			1.15			1.01			36
Year ended 12/31/07		27.02		0.34		1.80			2.14			(0.28	)		(0.28	)		28.88		7.88			34,772		1.12			1.13			1.19			45
Year ended 12/31/06		23.33		0.28		3.55			3.83			(0.14	)		(0.14	)		27.02		16.42			39,729		1.14			1.14			1.10			45

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s) of $1,353,622 and $34,767 for Series I and Series II shares, respectively.

Invesco V.I. Core Equity Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)
and Shareholders of Invesco V.I. Core Equity Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Core Equity Fund (formerly known as AIM V.I. Core Equity Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Core Equity Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,180.30	$	4.84	$	1,020.77	$	4.48		0.88	%
Series II		1,000.00		1,178.70		6.21		1,019.51		5.75		1.13

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Core 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Core Equity Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Diversified Income Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VIDIN-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2010, Invesco V.I. Diversified Income Fund outperformed the Fund’s broad market and style-specific indexes. Our security selection and asset allocation decisions were the largest contributors to performance relative to our style-specific index, which is primarily investment grade corporate credit in composition. Outperformance of the broad market index was due to overweight positions in non-government sectors, which outperformed government bonds.

      The Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	10.05	%
Series II Shares	9.70
Barclays Capital U.S. Aggregate Index▼(Broad Market Index)	6.54
Barclays Capital U.S. Credit Index▼(Style-Specific Index)	8.47
Lipper VUF Corporate Debt BBB-Rated Funds Index▼(Peer Group Index)	7.69

^▼Lipper Inc.

How we invest

We invest primarily in fixed-rate, U.S. dollar-denominated corporate bonds. We may invest up to 40% of total assets in foreign securities. Up to 35% of the Fund’s assets may be invested in lower quality, high yield debt securities; however, we have historically stayed closer to a 10% allocation in high yield and emerging markets on a combined basis. The Fund may invest in derivative instruments such as futures contracts and swap agreements, including but not limited to credit default swaps, and engage in mortgage dollar roll transactions, a form of repurchase agreement activity in the to-be-announced (TBA) market for agency mortgage backed securities (MBS).

      Our security selection is supported by a team of independent specialists. Team members conduct top-down macroeconomic as well as bottom-up analysis on individual securities. Recommendations are communicated to portfolio managers through proprietary technology that

allows all investment professionals to communicate in a timely manner.

     Portfolio construction begins with a well-defined Fund design that establishes the target investment vehicles for generating the desired “alpha” (the extra return above a specific benchmark) as well as the risk parameters for the Fund. Investment vehicles are evaluated for liquidity and relative value.

    Sell decisions are based on:

n	A conscious decision to alter the Fund’s macro risk exposure (such as duration, yield curve positioning, sector exposure).
n	The need to limit or reduce exposure to a particular sector or issuer.
n	Degradation of an issuer’s credit quality.
n	Realignment of a valuation target.
n	Presentation of a better relative value opportunity.

Market conditions and your Fund

In the U.S. and much of the developed world, a gradual and somewhat lackluster

recovery continued during 2010, with central banks keeping interest rates at low levels and with few of them withdrawing their quantitative easing measures. This helped private sector companies improve their balance sheets and earnings following the global financial crisis that began to dissipate in early 2009. However, investor skepticism of global governments’ abilities to retire huge amounts of debt without affecting economic growth rates caused sovereign debt distress (especially for eurozone countries) and became a focal point of investor concern.

      In the U.S., economic recovery was present, although the pace remained modest as stubbornly high unemployment and housing sector weakness continued to weigh on the economy. Real gross domestic product (GDP), the broadest measure of overall U.S. economic activity, increased at an annual rate of 3.7%, 1.7% and 2.6% for the first, second, and third quarters of 2010, respectively.¹ The U.S. Federal Reserve (the Fed) maintained a very accommodative monetary policy throughout the period, with the federal funds target rate unchanged in its range of zero to 0.25%.² The Fed recently described its view of the U.S. economy by stating: “The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated.”²

      U.S. Treasury yields for securities with maturities of two to 30 years ended the year lower than at the start, indicative of positive 12-month returns across government bond sectors.³ Treasuries performed well for the year despite a significant rise in yields for intermediate and longer maturity securities during the final three months of the year,

Portfolio Composition

By industry

Investment Banking & Brokerage	8.5	%
Other Diversified Financial Services	8.5
Diversified Banks	6.0
Other Industries, Each with Less
Than 3.0% of Total Net Assets	74.5
Money Market Funds Plus
Other Assets Less Liabilities	2.5

Top 10 Fixed Income Issuers*

1.	Citigroup Inc.	3.6	%
2.	Prudential Financial Inc.	2.0
3.	Bank of America Corp.	1.9
4.	Goldman Sachs Group Inc. (The)	1.8
5.	U.S. Treasury Bonds	1.7
6.	Hutchison Whampoa International Ltd.	1.7
7.	DIRECTV Holdings LLC/DIRECTV	1.7
8.	COX Communications Inc.	1.6
9.	Morgan Stanley	1.6
10.	Jeffries Group Inc.	1.5

Total Net Assets	$23.5 million
Total Number of Holdings*		346

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.

Invesco V.I. Diversified Income Fund

driven by rising inflation expectations and supply considerations. The broader U.S. investment grade bond market, as measured by the Barclays Capital U.S. Aggregate Index, also generated a positive total return for the 12 months ended December 31, 2010. Slow economic growth, the avoidance of a double-dip recession, a recovery in corporate financial health, strong inflows into credit related asset classes and low overall interest rates supported the performance of bonds, especially non-government sectors.

     In this environment, sector allocation and security selection were the dominate factors affecting Fund performance relative to the style-specific index.

     On the whole, sector allocation had a positive effect on Fund performance relative to the Fund’s style-specific index for the period. A sustained overweight position in financials, an underweight position in the government-related sectors and out-of-index allocations in agency MBS, agency collateralized mortgage obligations (CMOs) and commercial mortgage-backed securities (CMBS) all contributed notably to relative returns. Only U.S. Treasuries, cash and underweight positions in basic industries and consumer non-cyclicals slightly detracted from Fund returns.

     Security selection was by far the largest contributor to overall returns. The effects were broad based, with most of the contribution coming from the telecommunications/media/technology, basic industries, transportation and government-related bonds selected for the portfolio. Part of the security selection contribution to returns also can be attributed to holding a larger percentage of lower quality investment-grade (BBB/ Baa-rated) bonds than the style-specific index, along with maintaining approximately 10% in high yield and emerging market securities, combined.

     The Fund also can use active duration and yield curve positioning for risk management and for generating alpha versus its style-specific benchmark. Duration measures a portfolio’s price sensitivity to interest rate changes, with a shorter duration portfolio tending to be less sensitive to these changes. The contribution to performance versus the benchmark from duration positioning was mixed over the period, but overall it had a positive effect. We maintained a slightly shorter-than-benchmark duration position as interest rates trended lower during the first half of the year, which prevented us from fully participating in

the market rally as longer duration asset prices rose. During the third quarter, we moved to a slightly longer-than-benchmark duration position that resulted in significant benefit for our relative performance, and was only slightly offset during the fourth quarter as interest rates rose. U.S. Treasury note futures contracts were an important tool used in the management of our targeted portfolio duration.

     The Fund’s yield curve positioning (emphasizing points on the yield curve with the greatest return potential) was also mixed throughout 2010, but overall had a positive effect on performance relative to the style-specific index. The Fund benefited by favoring a flattening of the yield curve (long-term bonds expected to outperform short-term bonds).

     Thank you for your investment in Invesco V.I. Diversified Income Fund.

1	Bureau of Economic Analysis
2	U.S. Federal Reserve
3	Barclays Capital

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Cynthia Brien
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Diversified Income Fund. She joined Invesco in 1996. Ms. Brien earned a B.B.A. from The University of Texas at Austin. She is a director, and a past president, of the CFA Society of Houston.

Chuck Burge
Portfolio manager, is manager of Invesco V.I. Diversified Income Fund. He joined Invesco in 2002. Mr. Burge earned a B.S. in economics from Texas A&M University and an M.B.A. in finance and accounting from Rice University.

John Craddock
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Diversified Income Fund. He joined Invesco in 1999. Mr. Craddock earned a B.S. in mechanical engineering from Clemson University and an M.B.A. from Georgia Tech’s Dupree School of Management with a concentration in finance.

Peter Ehret
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Diversified Income Fund. Mr. Ehret joined Invesco in 2001. He graduated cum laude with a B.S. in economics from the University of Minnesota. He also earned an M.S. in real estate appraisal and investment analysis from the University of Wisconsin-Madison.

Darren Hughes
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Diversified Income Fund. He joined Invesco in 1992. Mr. Hughes earned a B.B.A. in finance and economics from Baylor University.

Invesco V.I. Diversified Income Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 4/30/93, Fund data from 5/5/93

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (5/5/93)			4.07	%
	10	Years	3.20
	5	Years	1.83
	1	Year	10.05
Series II Shares
	10	Years	2.94	%
	5	Years	1.58
	1	Year	9.70

Series II shares incepted on March 14, 2002. Performance shown prior to that date is that of Series I shares, restated to reflect the higher 12b-1 fees applicable to Series II. Series I performance reflects any applicable fee waivers or expense reimbursements. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for

the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.75% and 1.00%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.48% and 1.73%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Diversified Income Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered

through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2012. See current prospectus for more information.

Invesco V.I. Diversified Income Fund

Invesco V.I. Diversified Income Fund’s investment objective is total return comprised of current income and capital appreciation.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

     Interest rate risk refers to the risk that bond prices generally fall as interest rates rise; conversely, bond prices generally rise as interest rates fall. Specific bonds differ in their sensitivity to changes in interest rates depending on their individual characteristics, including duration.

     The issuer of instruments in which the Fund invests may be unable to meet interest and/or principal payments, thereby causing its instruments to decrease in value and lowering the issuer’s credit rating.

     The Fund may invest in mortgage and asset-backed securities that are subject to prepayment or call risk, which is the risk that the borrower’s payments may be received earlier or later than expected due to changes in prepayment rates on underlying loans. Securities may be prepaid at a price less than the original purchase value.

     The Fund’s investments in high yield securities expose it to a substantial degree of credit risk. High yield securities may be issued by companies that are restructuring, are smaller and less creditworthy or are more highly indebted than other companies, and therefore they may have more difficulty making scheduled payments of principal and interest. High yield securities may experience reduced liquidity, and sudden sand substantial decreases in price, and may have a higher incidence of default than higher-grade securities.

     The Fund’s foreign investments may be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     Securities issued by foreign companies and governments located in developing countries may be affected more nega-

tively by inflation, devaluation of their currencies, higher transaction costs, delays in settlement, adverse political developments, the introduction of capital controls, withholding taxes, nationalization of private assets, expropriation, social unrest, war or lack of timely information than those in developed countries.

     Leveraging entails risks such as magnifying changes in the value of the portfolio’s securities.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

     The Fund may engage in frequent trading of portfolio securities, which may result in added expenses, lower return and increased tax liability.

     The Fund may use enhanced investment techniques such as derivatives. The principal risk of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. Derivatives are subject to counterparty risk – the risk that the other party will not complete the transaction with the fund.

About indexes used in this report

The Barclays Capital U.S. Aggregate Index is an unmanaged index considered representative of the U.S. investment-grade, fixed-rate bond market.

     The Barclays Capital U.S. Credit Index is an unmanaged index considered representative of publicly issued, SEC-registered U.S. corporate and specified foreign debentures and secured notes.

     The Lipper VUF Corporate Debt BBB-Rated Funds Index is an unmanaged index considered representative of corporate debt BBB-rated variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Diversified Income Fund

Schedule of Investments^(a)

December 31, 2010

	Principal
	Amount		Value
Bonds & Notes–88.29%
Advertising–0.11%
Lamar Media Corp., Sr. Gtd. Sub. Global Notes, 7.88%, 04/15/18	$	25,000	$	26,594
Aerospace & Defense–0.40%
BE Aerospace, Inc., Sr. Unsec. Notes, 8.50%, 07/01/18		25,000		27,359
Bombardier Inc. (Canada), Sr. Notes, 7.50%, 03/15/18(b)		10,000		10,788
7.75%, 03/15/20(b)		15,000		16,350
Raytheon Co., Sr. Unsec. Notes, 1.63%, 10/15/15		30,000		28,829
Triumph Group, Inc., Sr. Unsec. Gtd. Sub. Global Notes, 8.00%, 11/15/17		10,000		10,575
				93,901
Agricultural Products–0.13%
Corn Products International, Inc., Sr. Unsec. Notes, 6.63%, 04/15/37		30,000		31,378
Airlines–2.37%
American Airlines–Series 2009-1A, Sec. Pass Through Ctfs., 10.38%, 07/02/19		44,381		52,980
Continental Airlines Inc., Series 2009-1, Class A, Sec. Pass Through Ctfs., 9.00%, 07/08/16		201,511		230,731
Series 2009-1, Class B, Sec. Global Pass Through Ctfs., 9.25%, 05/10/17		14,248		15,459
Delta Air Lines, Inc., Sr. Sec. Notes, 9.50%, 09/15/14(b)		9,000		9,832
Series 2002-1, Class C, Sec. Pass Through Ctfs., 7.78%, 01/02/12		6,025		6,070
Series 2009-1, Class A, Sr. Sec. Pass Through Ctfs., 7.75%, 12/17/19		43,929		49,036
Series 2010-1, Class A, Sec. Pass Through Ctfs., 6.20%, 07/02/18		40,000		42,950
Series 2010-2, Class A, Sec. Pass Through Ctfs., 4.95%, 05/23/19		60,000		60,375
UAL Corp., Series 2009-1, Sr. Sec. Gtd. Global Pass Through Ctfs., 10.40%, 11/01/16		47,215		54,888
Series 2009-2A, Sec. Gtd. Global Pass Through Ctfs., 9.75%, 01/15/17		28,552		33,120
				555,441
Aluminum–0.11%
Century Aluminum Co., Sr. Sec. Notes, 8.00%, 05/15/14		25,000		26,453
Apparel Retail–0.24%
Limited Brands Inc., Sr. Unsec. Gtd. Global Notes, 8.50%, 06/15/19		50,000		57,500
Apparel, Accessories & Luxury Goods–0.07%
Hanesbrands Inc., Sr. Unsec. Gtd. Notes, 6.38%, 12/15/20(b)		5,000		4,825
Phillips-Van Heusen Corp., Sr. Unsec. Notes, 7.38%, 05/15/20		10,000		10,625
				15,450
Auto Parts & Equipment–0.14%
Allison Transmission Inc., Sr. Unsec. Gtd. Notes, 11.00%, 11/01/15(b)		15,000		16,388
Tenneco Inc., Sr. Gtd. Notes, 6.88%, 12/15/20(b)		15,000		15,300
				31,688
Automotive Retail–1.43%
Advance Auto Parts, Inc., Sr. Unsec. Gtd. Notes, 5.75%, 05/01/20		100,000		103,875
AutoZone Inc., Sr. Unsec. Notes, 5.75%, 01/15/15		210,000		231,399
				335,274
Brewers–0.41%
Anheuser-Busch InBev Worldwide Inc., Sr. Unsec. Gtd. Global Notes, 4.13%, 01/15/15		90,000		95,069
Broadcasting–1.86%
Allbritton Communications Co., Sr. Unsec. Global Notes, 8.00%, 05/15/18		25,000		25,375
COX Communications Inc., Sr. Unsec. Bonds, 8.38%, 03/01/39(b)		75,000		96,920
Sr. Unsec. Global Notes, 5.45%, 12/15/14		95,000		104,520
Sr. Unsec. Notes, 9.38%, 01/15/19(b)		140,000		182,940
Nielsen Finance LLC/Co., Sr. Unsec. Gtd. Sub. Disc. Global Notes, 12.50%, 08/01/16(c)		25,000		26,375
				436,130
Building Products–0.54%
Building Materials Corp. of America, Sr. Gtd. Notes, 7.50%, 03/15/20(b)		25,000		25,688
Gibraltar Industries Inc.–Series B, Sr. Unsec. Gtd. Sub. Global Notes, 8.00%, 12/01/15		15,000		15,206
Ply Gem Industries Inc., Sr. Sec. Gtd. First & Second Lien Global Notes, 11.75%, 06/15/13		45,000		48,262
Roofing Supply Group LLC/Roofing Supply Finance Inc., Sr. Sec. Notes, 8.63%, 12/01/17(b)		20,000		20,850
USG Corp., Sr. Unsec. Gtd. Notes, 9.75%, 08/01/14(b)		15,000		15,938
				125,944
Cable & Satellite–2.49%
Cablevision Systems Corp., Sr. Unsec. Global Notes, 8.63%, 09/15/17		25,000		27,469
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 05/15/16		350,000		389,375

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Diversified Income Fund

	Principal
	Amount		Value
Cable & Satellite–(continued)
Hughes Network Systems LLC/HNS Finance Corp., Sr. Unsec. Gtd. Global Notes, 9.50%, 04/15/14	$	20,000	$	20,725
Sirius XM Radio Inc., Sr. Unsec. Gtd. Notes, 8.75%, 04/01/15(b)		15,000		16,256
Time Warner Cable Inc., Sr. Unsec. Gtd. Notes, 5.00%, 02/01/20		60,000		61,866
5.88%, 11/15/40		70,000		69,583
				585,274
Casinos & Gaming–0.61%
Great Canadian Gaming Corp. (Canada), Sr. Unsec. Gtd. Sub. Notes, 7.25%, 02/15/15(b)		25,000		25,750
MGM Resorts International, Sr. Sec. Global Notes, 11.13%, 11/15/17		15,000		17,362
Sr. Unsec. Gtd. Global Notes, 6.63%, 07/15/15		15,000		13,838
Pinnacle Entertainment Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 08/01/17		30,000		32,775
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., Sr. Sec. Gtd. First Mortgage Global Notes, 7.88%, 11/01/17		50,000		54,000
				143,725
Coal & Consumable Fuels–0.14%
CONSOL Energy Inc., Sr. Unsec. Gtd. Notes, 8.00%, 04/01/17(b)		15,000		16,087
8.25%, 04/01/20(b)		15,000		16,275
				32,362
Computer & Electronics Retail–0.04%
Rent-A-Center Inc./TX, Sr. Unsec. Notes, 6.63%, 11/15/20(b)		10,000		10,025
Computer Storage & Peripherals–0.04%
Seagate HDD Cayman (Cayman Islands), Sr. Unsec. Gtd. Notes, 7.75%, 12/15/18(b)		10,000		10,213
Construction Materials–0.92%
CRH America Inc., Sr. Unsec. Gtd. Notes, 4.13%, 01/15/16		80,000		79,376
Holcim U.S. Finance Sarl & Cie SCS (Switzerland), Sr. Unsec. Gtd. Notes, 6.00%, 12/30/19(b)		110,000		114,778
Texas Industries Inc., Sr. Unsec. Gtd. Notes, 9.25%, 08/15/20(b)		20,000		21,350
				215,504
Construction, Farm Machinery & Heavy Trucks–0.46%
Case New Holland Inc., Sr. Unsec. Gtd. Global Notes, 7.75%, 09/01/13		20,000		21,600
CNH America LLC, Sr. Unsec. Gtd. Notes, 7.25%, 01/15/16		25,000		27,125
Manitowoc Co. Inc. (The), Sr. Unsec. Gtd. Notes, 8.50%, 11/01/20		5,000		5,356
Navistar International Corp., Sr. Unsec. Gtd. Notes, 8.25%, 11/01/21		25,000		27,062
Titan International Inc., Sr. Sec. Gtd. Notes, 7.88%, 10/01/17(b)		25,000		26,563
				107,706
Consumer Finance–1.12%
Ally Financial Inc., Sr. Unsec. Gtd. Global Notes, 8.00%, 03/15/20		25,000		27,500
8.00%, 11/01/31		50,000		53,500
Ford Motor Credit Co. LLC, Sr. Unsec. Notes, 8.00%, 12/15/16		65,000		72,800
National Money Mart Co. (Canada), Sr. Unsec. Gtd. Global Notes, 10.38%, 12/15/16		25,000		27,250
SLM Corp., Sr. Unsec. Medium-Term Notes, 8.00%, 03/25/20		45,000		45,885
Series A, Sr. Unsec. Gtd. Medium-Term Notes, 5.00%, 10/01/13		35,000		35,332
				262,267
Data Processing & Outsourced Services–0.11%
SunGard Data Systems Inc., Sr. Unsec. Gtd. Sub. Global Notes, 10.25%, 08/15/15		25,000		26,313
Department Stores–0.10%
Sears Holdings Corp., Sr. Sec. Notes, 6.63%, 10/15/18(b)		25,000		23,625
Diversified Banks–5.95%
Bank of Nova Scotia (Canada), Sr. Unsec. Global Notes, 2.38%, 12/17/13		70,000		71,960
Barclays Bank PLC (United Kingdom), Sr. Unsec. Global Notes, 6.75%, 05/22/19		155,000		175,591
Credit Suisse AG (Switzerland), Sub. Global Medium-Term Notes, 5.40%, 01/14/20		115,000		117,675
HSBC Bank PLC (United Kingdom), Sr. Notes, 4.13%, 08/12/20(b)		235,000		230,189
ING Bank N.V. (Netherlands), Unsec. Sub. Notes, 5.13%, 05/01/15(b)		100,000		104,712
Lloyds TSB Bank PLC (United Kingdom), Sr. Unsec. Gtd. Medium-Term Notes, 4.38%, 01/12/15(b)		145,000		144,614
Royal Bank of Scotland PLC (The) (United Kingdom), Sr. Unsec. Gtd. Global Notes, 4.88%, 03/16/15		130,000		132,432
Series 2, Sr. Unsec. Gtd. Global Notes, 3.40%, 08/23/13		75,000		75,854
Societe Generale (France), Sr. Unsec. Notes, 2.50%, 01/15/14(b)		130,000		130,020
Standard Chartered PLC (United Kingdom), Sr. Unsec. Notes, 5.50%, 11/18/14(b)		55,000		59,339

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Diversified Income Fund

	Principal
	Amount		Value
Diversified Banks–(continued)
VTB Bank Via VTB Capital S.A. (Luxembourg), Sr. Unsec. Gtd. Notes, 6.55%, 10/13/20(b)	$	100,000	$	98,757
Wachovia Corp.–Series G, Sr. Unsec. Medium-Term Notes, 5.50%, 05/01/13		50,000		54,440
				1,395,583
Diversified Capital Markets–0.46%
UBS AG (Switzerland), Sr. Unsec. Medium-Term Notes, 5.75%, 04/25/18		100,000		109,009
Diversified Metals & Mining–0.47%
Freeport-McMoRan Copper & Gold Inc., Sr. Unsec. Bonds, 8.38%, 04/01/17		35,000		38,664
Rio Tinto Finance USA Ltd. (Australia), Sr. Unsec. Gtd. Global Notes, 8.95%, 05/01/14		60,000		72,587
				111,251
Drug Retail–0.74%
CVS Pass Through Trust, Sr. Unsec. Gtd. Notes, 5.77%, 01/10/33(b)		175,000		174,083
Electric Utilities–2.80%
Carolina Power & Light Co., Sec. First Mortgage Bonds, 5.30%, 01/15/19		40,000		44,514
DCP Midstream LLC, Notes, 9.70%, 12/01/13(b)		100,000		118,889
Sr. Unsec. Notes, 9.75%, 03/15/19(b)		55,000		69,763
Enel Finance International S.A. (Luxembourg), Sr. Unsec. Gtd. Notes, 3.88%, 10/07/14(b)		100,000		102,029
LSP Energy L.P./LSP Batesville Funding Corp.–Series D, Sr. Sec. Bonds, 8.16%, 07/15/25		25,000		18,125
Ohio Power Co.–Series M, Sr. Unsec. Notes, 5.38%, 10/01/21		180,000		192,112
PPL Electric Utilities Corp., Sec. First Mortgage Bonds, 6.25%, 05/15/39		45,000		50,718
Virginia Electric & Power Co., Sr. Unsec. Notes, 5.00%, 06/30/19		55,000		59,726
				655,876
Electrical Components & Equipment–0.14%
Belden Inc., Sr. Gtd. Sub. Global Notes, 9.25%, 06/15/19		25,000		27,500
Polypore International Inc., Sr. Unsec. Gtd. Notes, 7.50%, 11/15/17(b)		5,000		5,150
				32,650
Electronic Manufacturing Services–0.14%
Jabil Circuit, Inc., Sr. Unsec. Notes, 7.75%, 07/15/16		15,000		16,875
5.63%, 12/15/20		15,000		14,813
				31,688
Environmental & Facilities Services–0.30%
Waste Management, Inc., Sr. Unsec. Gtd. Notes, 5.00%, 03/15/14		65,000		70,297
Food Retail–0.72%
Kroger Co. (The), Sr. Unsec. Gtd. Notes, 5.40%, 07/15/40		25,000		23,945
Safeway, Inc., Sr. Unsec. Global Notes, 3.95%, 08/15/20		105,000		99,689
WM Wrigley Jr. Co., Sr. Sec. Gtd. Floating Rate Notes, 1.68%, 06/28/11(b)(d)		45,000		45,070
				168,704
Gas Utilities–0.09%
Ferrellgas L.P./Ferrellgas Finance Corp., Sr. Unsec. Notes, 6.50%, 05/01/21(b)		10,000		9,775
Suburban Propane Partners, L.P./Suburban Energy Finance Corp., Sr. Unsec. Notes, 7.38%, 03/15/20		10,000		10,725
				20,500
Gold–0.81%
Gold Fields Orogen Holding BVI Ltd. (Mali), Sr. Unsec. Gtd. Notes, 4.88%, 10/07/20		200,000		190,743
Health Care Equipment–1.08%
Boston Scientific Corp., Sr. Unsec. Notes, 4.50%, 01/15/15		50,000		51,034
6.00%, 01/15/20		85,000		89,004
Hospira Inc., Sr. Unsec. Notes, 5.60%, 09/15/40		115,000		113,068
				253,106
Health Care Facilities–0.52%
Community Health Systems Inc., Sr. Unsec. Gtd. Global Notes, 8.88%, 07/15/15		25,000		26,375
HCA, Inc., Sr. Sec. Gtd. Global Notes, 7.88%, 02/15/20		50,000		53,750
Healthsouth Corp., Sr. Unsec. Gtd. Notes, 7.25%, 10/01/18		15,000		15,337
7.75%, 09/15/22		15,000		15,525
Tenet Healthcare Corp., Sr. Unsec. Global Notes, 9.25%, 02/01/15		10,000		10,700
				121,687
Health Care Services–2.14%
Express Scripts Inc., Sr. Unsec. Gtd. Global Notes, 6.25%, 06/15/14		125,000		139,733
7.25%, 06/15/19		40,000		47,358
Laboratory Corp. of America Holdings, Sr. Unsec. Gtd. Notes, 3.13%, 05/15/16		145,000		142,914
Medco Health Solutions Inc., Sr. Unsec. Notes, 2.75%, 09/15/15		35,000		34,806
Orlando Lutheran Towers Inc., Putable Bonds, 7.75%, 07/01/11		15,000		15,126
8.00%, 07/01/17		125,000		122,949
				502,886

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Diversified Income Fund

	Principal
	Amount		Value
Health Care Technology–0.06%
MedAssets Inc., Sr. Unsec. Gtd. Notes, 8.00%, 11/15/18(b)	$	15,000	$	15,150
Home Improvement Retail–0.33%
Lowe’s Cos. Inc., Sr. Unsec. Notes, 3.75%, 04/15/21		80,000		77,534
Hotels, Resorts & Cruise Lines–1.74%
Hyatt Hotels Corp., Sr. Unsec. Notes, 5.75%, 08/15/15(b)		165,000		173,527
Royal Caribbean Cruises Ltd. (Trinidad), Sr. Unsec. Global Notes, 7.50%, 10/15/27		25,000		24,687
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec. Notes, 7.15%, 12/01/19		35,000		38,500
Wyndham Worldwide Corp., Sr. Unsec. Notes, 7.38%, 03/01/20		155,000		170,694
				407,408
Household Products–0.11%
Central Garden and Pet Co., Sr. Gtd. Sub. Notes, 8.25%, 03/01/18		25,000		25,688
Independent Power Producers & Energy Traders–0.46%
AES Corp. (The), Sr. Unsec. Global Notes, 9.75%, 04/15/16		50,000		56,250
NRG Energy, Inc., Sr. Unsec. Gtd. Notes, 7.38%, 02/01/16		25,000		25,625
7.38%, 01/15/17		25,000		25,625
				107,500
Industrial Conglomerates–1.99%
Hutchison Whampoa International Ltd. (Cayman Islands), Gtd. Notes, 5.75%, 09/11/19(b)		100,000		107,669
Sr. Unsec. Gtd. Notes, 7.63%, 04/09/19(b)		130,000		155,127
Unsec. Gtd. Sub. Variable Rate Notes, 6.00%(b)(d)(e)		135,000		132,975
NBC Universal, Inc., Sr. Unsec. Sub. Notes, 2.10%, 04/01/14(b)		35,000		34,994
5.95%, 04/01/41(b)		35,000		35,155
				465,920
Insurance Brokers–0.54%
Marsh & McLennan Cos. Inc., Sr. Unsec. Notes, 9.25%, 04/15/19		100,000		125,672
Integrated Telecommunication Services–1.18%
AT&T Inc., Sr. Unsec. Global Notes, 2.50%, 08/15/15		60,000		59,983
Intelsat Intermediate Holding Co. S.A. (Bermuda), Sr. Unsec. Gtd. Disc. Global Notes, 9.50%, 02/01/15(c)		35,000		36,225
Qwest Communications International Inc., Sr. Unsec. Gtd. Notes, 7.13%, 04/01/18(b)		25,000		25,875
Telemar Norte Leste S.A. (Brazil), Sr. Unsec. Notes, 5.50%, 10/23/20(b)		161,000		155,627
				277,710
Internet Retail–0.79%
Expedia Inc., Sr. Unsec. Gtd. Global Notes, 5.95%, 08/15/20		165,000		166,119
Travelport LLC, Sr. Unsec. Gtd. Global Notes, 9.88%, 09/01/14		20,000		19,600
				185,719
Internet Software & Services–0.07%
Equinix Inc., Sr. Unsec. Notes, 8.13%, 03/01/18		15,000		15,750
Investment Banking & Brokerage–8.47%
Cantor Fitzgerald L.P., Bonds, 7.88%, 10/15/19(b)		315,000		318,460
E*Trade Financial Corp., Sr. Unsec. Global Notes, 7.38%, 09/15/13		10,000		10,000
Goldman Sachs Group Inc. (The),
Sr. Global Notes, 3.70%, 08/01/15		45,000		45,919
Sr. Unsec. Global Notes, 5.13%, 01/15/15		50,000		53,861
Sr. Unsec. Medium-Term Global Notes, 5.38%, 03/15/20		175,000		183,622
Sr. Unsec. Sub. Global Notes, 6.75%, 10/01/37		140,000		144,493
Jefferies Group Inc., Sr. Unsec. Notes, 6.45%, 06/08/27		375,000		360,656
Macquarie Group Ltd. (Australia), Sr. Unsec. Notes, 7.30%, 08/01/14(b)		110,000		119,919
6.00%, 01/14/20(b)		105,000		105,921
Merrill Lynch & Co. Inc.-, Series C, Sr. Unsec. Medium-Term Global Notes, 5.45%, 02/05/13		200,000		211,353
Morgan Stanley, Sr. Unsec. Medium-Term Global Notes, 6.00%, 05/13/14		230,000		248,044
Series F, Sr. Unsec. Medium-Term Global Notes, 5.63%, 09/23/19		130,000		132,343
Schwab Capital Trust I, Jr. Unsec. Gtd. Sub. Variable Rate Notes, 7.50%, 11/15/37(d)		50,000		51,842
				1,986,433
IT Consulting & Other Services–0.41%
SAIC Inc., Sr. Unsec. Gtd. Notes, 4.45%, 12/01/20(b)		60,000		60,097
5.95%, 12/01/40(b)		35,000		35,650
				95,747
Leisure Facilities–0.11%
Universal City Development Partners Ltd./UCDP Finance Inc., Sr. Unsec. Gtd. Global Notes, 8.88%, 11/15/15		25,000		26,750
Life & Health Insurance–3.04%
Aflac Inc., Sr. Unsec. Notes, 6.45%, 08/15/40		60,000		62,290
MetLife Inc., Sr. Unsec. Notes, 6.75%, 06/01/16		155,000		179,572

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Diversified Income Fund

	Principal
	Amount		Value
Life & Health Insurance–(continued)
Prudential Financial Inc., Jr. Unsec. Sub. Variable Rate Global Notes, 8.88%, 06/15/38(d)	$	130,000	$	151,069
Series D, Sr. Unsec. Medium-Term Notes, 2.75%, 01/14/13		105,000		106,884
3.88%, 01/14/15		105,000		107,895
7.38%, 06/15/19		90,000		105,823
				713,533
Life Sciences Tools & Services–0.66%
Life Technologies Corp., Sr. Notes, 6.00%, 03/01/20		120,000		128,652
Patheon Inc. (Canada), Sr. Sec. Notes, 8.63%, 04/15/17(b)		25,000		25,062
				153,714
Managed Health Care–0.24%
UnitedHealth Group Inc., Sr. Unsec. Notes, 3.88%, 10/15/20		60,000		57,387
Metal & Glass Containers–0.02%
Ball Corp., Sr. Unsec. Gtd. Notes, 5.75%, 05/15/21		5,000		4,875
Mortgage Backed Securities–0.48%
U.S. Bank N.A., Sr. Unsec. Medium-Term Global Notes, 5.92%, 05/25/12		108,158		112,513
Movies & Entertainment–0.62%
AMC Entertainment Inc., Sr. Unsec. Gtd. Global Notes, 8.75%, 06/01/19		35,000		37,450
Cinemark USA Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 06/15/19		25,000		27,188
NAI Entertainment Holdings LLC, Sr. Sec. Notes, 8.25%, 12/15/17(b)		15,000		15,825
Time Warner Cable Inc., Sr. Unsec. Global Notes, 6.75%, 07/01/18		55,000		64,042
				144,505
Multi-Line Insurance–1.67%
American Financial Group Inc., Sr. Unsec. Notes, 9.88%, 06/15/19		180,000		216,862
American International Group Inc., Sr. Unsec. Global Notes, 3.65%, 01/15/14		60,000		60,690
Hartford Financial Services Group Inc. (The), Jr. Unsec. Sub. Variable Rate Deb., 8.13%, 06/15/38(d)		10,000		10,731
Liberty Mutual Group Inc., Sr. Unsec. Notes, 5.75%, 03/15/14(b)		100,000		103,555
				391,838
Multi-Utilities–0.28%
Pacific Gas & Electric Co., Sr. Unsec. Notes, 5.40%, 01/15/40		65,000		65,769
Office REIT’s–0.81%
Digital Realty Trust L.P., Sr. Unsec. Gtd. Global Notes, 5.88%, 02/01/20		185,000		189,172
Office Services & Supplies–0.10%
IKON Office Solutions, Inc., Sr. Unsec. Notes, 6.75%, 12/01/25		25,000		24,125
Oil & Gas Drilling–0.48%
Precision Drilling Corp. (Canada), Sr. Unsec. Gtd. Notes, 6.63%, 11/15/20(b)		5,000		5,112
Transocean Inc. (Cayman Islands), Sr. Unsec. Global Notes, 4.95%, 11/15/15		100,000		103,274
Trinidad Drilling Ltd. (Canada), Sr. Unsec. Notes, 7.88%, 01/15/19(b)		5,000		5,153
				113,539
Oil & Gas Equipment & Services–0.11%
Bristow Group, Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 09/15/17		10,000		10,500
Calfrac Holdings L.P., Sr. Unsec. Notes, 7.50%, 12/01/20(b)		5,000		5,034
Key Energy Services Inc., Sr. Unsec. Gtd. Global Notes, 8.38%, 12/01/14		10,000		10,600
				26,134
Oil & Gas Exploration & Production–2.62%
Anadarko Petroleum Corp., Sr. Unsec. Global Notes, 5.75%, 06/15/14		95,000		101,690
Sr. Unsec. Notes, 7.63%, 03/15/14		15,000		16,826
6.38%, 09/15/17		25,000		27,224
Chesapeake Energy Corp., Sr. Unsec. Gtd. Notes, 6.63%, 08/15/20		10,000		9,838
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 7.13%, 05/01/17		50,000		52,062
Concho Resources Inc., Sr. Notes, 7.00%, 01/15/21		5,000		5,150
Continental Resources Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 10/01/19		15,000		16,462
Encore Acquisition Co., Sr. Gtd. Sub. Notes, 9.50%, 05/01/16		10,000		11,138
EOG Resources Inc., Sr. Unsec. Notes, 4.10%, 02/01/21		110,000		108,834
McMoRan Exploration Co., Sr. Unsec. Gtd. Notes, 11.88%, 11/15/14		35,000		38,806
Pemex Project Funding Master Trust, Sr. Unsec. Gtd. Global Bonds, 6.63%, 06/15/35(b)		65,000		66,179
Petrobras International Finance Co. (Cayman Islands), Sr. Unsec. Gtd. Global Notes, 6.88%, 01/20/40		45,000		47,358
Petrohawk Energy Corp., Sr. Unsec. Gtd. Global Notes, 7.88%, 06/01/15		15,000		15,656
Petroleos Mexicanos (Mexico), Sr. Unsec. Global Notes, 5.50%, 01/21/21		65,000		66,060

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Diversified Income Fund

	Principal
	Amount		Value
Oil & Gas Exploration & Production–(continued)
Plains Exploration & Production Co., Sr. Unsec. Gtd. Notes, 8.63%, 10/15/19	$	15,000	$	16,463
Range Resources Corp., Sr. Unsec. Gtd. Sub. Notes, 7.50%, 10/01/17		15,000		15,863
				615,609
Oil & Gas Refining & Marketing–0.84%
Petronas Capital Ltd. (Malaysia), Unsec. Gtd. Unsub. Notes, 5.25%, 08/12/19(b)		100,000		107,398
Tesoro Corp., Sr. Unsec. Gtd. Global Bonds, 6.50%, 06/01/17		5,000		5,031
Sr. Unsec. Gtd. Global Notes, 6.63%, 11/01/15		10,000		10,188
United Refining Co.–Series 2, Sr. Unsec. Gtd. Global Notes, 10.50%, 08/15/12		75,000		73,781
				196,398
Oil & Gas Storage & Transportation–3.04%
Copano Energy LLC/Copano Energy Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.13%, 03/01/16		20,000		20,800
Enterprise Products Operating LLC, Sr. Unsec. Gtd. Notes, 5.20%, 09/01/20		70,000		72,636
6.45%, 09/01/40		70,000		75,878
Genesis Energy L.P./Genesis Energy Finance Corp., Sr. Unsec. Gtd. Notes, 7.88%, 12/15/18(b)		5,000		4,975
Inergy L.P./Inergy Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.25%, 03/01/16		25,000		26,187
Overseas Shipholding Group, Inc., Sr. Unsec. Notes, 8.13%, 03/30/18		25,000		25,187
Regency Energy Partners L.P./Regency Energy Finance Corp., Sr. Unsec. Gtd. Notes, 6.88%, 12/01/18		15,000		15,263
Spectra Energy Capital LLC, Sr. Unsec. Gtd. Notes, 5.65%, 03/01/20		155,000		165,629
Williams Partners L.P., Sr. Unsec. Global Notes, 3.80%, 02/15/15		210,000		217,339
6.30%, 04/15/40		85,000		89,235
				713,129
Other Diversified Financial Services–8.52%
Bank of America Corp., Sr. Unsec. Global Notes,
4.50%, 04/01/15		240,000		245,266
3.70%, 09/01/15		25,000		24,856
6.50%, 08/01/16		130,000		141,331
Sr. Unsec. Notes, 5.88%, 01/05/21		35,000		36,272
Citigroup Inc., Sr. Unsec. Global Notes, 6.01%, 01/15/15		250,000		274,943
Sr. Unsec. Notes, 6.38%, 08/12/14		505,000		559,718
Countrywide Financial Corp., Sr. Unsec. Gtd. Medium-Term Global Notes, 5.80%, 06/07/12		10,000		10,544
ERAC USA Finance LLC, Sr. Unsec. Gtd. Notes, 5.80%, 10/15/12(b)		105,000		112,492
5.25%, 10/01/20(b)		30,000		30,528
Football Trust V, Sec. Pass Through Ctfs., 5.35%, 10/05/20(b)		100,000		104,600
General Electric Capital Corp.–Series A, Sr. Unsec. Medium-Term Global Notes, 6.88%, 01/10/39		200,000		232,031
International Lease Finance Corp., Sr. Unsec. Notes, 8.63%, 09/15/15(b)		10,000		10,775
8.75%, 03/15/17(b)		15,000		16,163
8.25%, 12/15/20		15,000		15,563
JPMorgan Chase & Co., Sr. Unsec. Global Notes, 4.75%, 05/01/13		15,000		16,066
JPMorgan Chase Capital XXVII–Series AA, Jr. Unsec. Gtd. Sub. Notes, 7.00%, 11/01/39		160,000		166,594
Twin Reefs Pass-Through Trust, Sec. Floating Rate Pass Through Ctfs., 1.39%, (Acquired 12/07/04-04/03/06; Cost $130,332)(b)(d)(e)(f)		130,000		—
				1,997,742
Packaged Foods & Meats–0.78%
Del Monte Corp., Sr. Unsec. Gtd. Sub. Global Notes, 7.50%, 10/15/19		10,000		11,725
Dole Food Co. Inc., Sr. Sec. Notes, 8.00%, 10/01/16(b)		25,000		26,500
Kraft Foods Inc., Sr. Unsec. Global Notes, 2.63%, 05/08/13		70,000		71,968
4.13%, 02/09/16		15,000		15,747
6.50%, 02/09/40		50,000		55,948
				181,888
Paper Packaging–0.04%
Cascades Inc. (Canada), Sr. Unsec. Gtd. Global Notes, 7.88%, 01/15/20		10,000		10,300
Paper Products–0.71%
International Paper Co., Sr. Unsec. Global Notes, 7.50%, 08/15/21		110,000		129,784
Mercer International Inc., Sr. Unsec. Notes, 9.50%, 12/01/17(b)		5,000		5,175
Neenah Paper, Inc., Sr. Unsec. Gtd. Global Notes, 7.38%, 11/15/14		15,000		15,300
P.H. Glatfelter Co., Sr. Unsec. Gtd. Global Notes, 7.13%, 05/01/16		15,000		15,530
				165,789
Pharmaceuticals–0.13%
Mylan Inc., Sr. Gtd. Notes, 6.00%, 11/15/18(b)		5,000		4,938
Valeant Pharmaceuticals International (Canada), Sr. Unsec. Gtd. Notes, 6.75%, 10/01/17(b)		10,000		9,975
7.00%, 10/01/20(b)		15,000		14,850
				29,763

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Diversified Income Fund

	Principal
	Amount		Value
Property & Casualty Insurance–1.06%
CNA Financial Corp., Sr. Unsec. Notes, 7.35%, 11/15/19	$	160,000	$	175,656
W.R. Berkley Corp., Sr. Unsec. Notes, 5.38%, 09/15/20		75,000		73,987
				249,643
Publishing–0.16%
Gannett Co. Inc., Sr. Unsec. Gtd. Global Notes, 9.38%, 11/15/17		25,000		27,875
Reed Elsevier Capital Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 08/01/11		9,000		9,322
				37,197
Railroads–1.23%
Canadian Pacific Railway Co. (Canada), Sr. Unsec. Yankee Bonds, 4.45%, 03/15/23		20,000		19,344
CSX Corp., Sr. Unsec. Notes, 5.50%, 04/15/41		100,000		98,282
Kansas City Southern de Mexico S.A. de C.V. (Mexico), Sr. Unsec. Global Notes, 8.00%, 02/01/18		35,000		37,765
Union Pacific Corp., Sr. Unsec. Notes, 4.00%, 02/01/21		135,000		132,468
				287,859
Regional Banks–1.61%
PNC Funding Corp., Sr. Unsec. Gtd. Global Notes, 3.63%, 02/08/15		110,000		113,563
PNC Preferred Funding Trust III, Jr. Sub. Variable Rate Notes, 8.70%(b)(d)(e)		200,000		212,250
Regions Financial Corp., Unsec. Sub. Notes, 7.38%, 12/10/37		30,000		28,200
Zions Bancorp., Unsec. Sub. Notes, 5.50%, 11/16/15		25,000		24,375
				378,388
Restaurants–0.91%
Yum! Brands, Inc., Sr. Unsec. Notes, 5.30%, 09/15/19		200,000		214,140
Semiconductor Equipment–0.11%
Amkor Technology Inc., Sr. Unsec. Global Notes, 7.38%, 05/01/18		25,000		26,063
Semiconductors–0.18%
Freescale Semiconductor Inc., Sr. Sec. Gtd. Notes, 9.25%, 04/15/18(b)		25,000		27,625
NXP B.V./NXP Funding LLC (Netherlands), Sr. Sec. Gtd. Global Notes, 7.88%, 10/15/14		15,000		15,694
				43,319
Sovereign Debt–1.69%
Brazilian Government International Bond (Brazil), Sr. Unsec. Global Notes, 5.88%, 01/15/19		120,000		133,575
Mexico Government International Bond (Mexico)–Series A, Sr. Unsec. Medium-Term Global Notes, 6.05%, 01/11/40		60,000		61,350
Russian Foreign Bond (Russia), Sr. Unsec. Euro Bonds, 3.63%, 04/29/15(b)		100,000		100,187
5.00%, 04/29/20(b)		100,000		100,500
				395,612
Specialized Finance–2.38%
CIT Group Inc., Sr. Sec. Bonds, 7.00%, 05/01/14		25,000		25,250
Moody’s Corp., Sr. Unsec. Notes, 5.50%, 09/01/20		115,000		113,671
NASDAQ OMX Group Inc. (The), Sr. Unsec. Notes, 4.00%, 01/15/15		350,000		357,314
National Rural Utilities Cooperative Finance Corp., Sr. Sec. Notes, 2.63%, 09/16/12		60,000		61,683
				557,918
Specialized REIT’s–2.24%
Entertainment Properties Trust, Sr. Unsec. Gtd. Notes, 7.75%, 07/15/20(b)		245,000		259,978
Health Care REIT Inc., Sr. Unsec. Notes, 4.95%, 01/15/21		70,000		67,639
Healthcare Realty Trust Inc., Sr. Unsec. Notes, 6.50%, 01/17/17		140,000		151,147
Omega Healthcare Investors Inc., Sr. Unsec. Gtd. Notes, 6.75%, 10/15/22(b)		5,000		4,963
Plum Creek Timberlands L.P., Sr. Unsec. Gtd. Notes, 4.70%, 03/15/21		45,000		42,903
				526,630
Specialty Chemicals–0.09%
Nalco Co., Sr. Notes, 6.63%, 01/15/19(b)		5,000		5,125
PolyOne Corp., Sr. Unsec. Notes, 7.38%, 09/15/20		15,000		15,600
				20,725
Specialty Stores–0.78%
Staples Inc., Sr. Unsec. Gtd. Global Notes, 9.75%, 01/15/14		25,000		30,225
Sr. Unsec. Gtd. Notes, 7.75%, 04/01/11		150,000		152,573
				182,798
Steel–1.72%
AK Steel Corp., Sr. Unsec. Gtd. Notes, 7.63%, 05/15/20		5,000		5,050
ArcelorMittal (Luxembourg), Sr. Unsec. Global Bonds, 9.00%, 02/15/15		55,000		65,499
Sr. Unsec. Global Notes, 7.00%, 10/15/39		195,000		202,018
FMG Resources Ltd. (Australia), Sr. Notes, 6.38%, 02/01/16(b)		5,000		5,014
Vale Overseas Ltd., Sr. Unsec. Gtd. Global Notes, 4.63%, 09/15/20		55,000		54,790
Sub. Global Notes, 6.88%, 11/10/39		65,000		70,907
				403,278

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Diversified Income Fund

	Principal
	Amount		Value
Systems Software–0.30%
Allen Systems Group Inc., Sr. Sec. Notes, 10.50%, 11/15/16(b)	$	20,000	$	20,500
Symantec Corp., Sr. Unsec. Notes, 4.20%, 09/15/20		55,000		50,831
				71,331
Technology Distributors–0.28%
Avnet Inc., Sr. Unsec. Notes, 5.88%, 06/15/20		65,000		65,325
Tires & Rubber–0.06%
Cooper Tire & Rubber Co., Sr. Unsec. Notes, 7.63%, 03/15/27		15,000		14,100
Trading Companies & Distributors–0.17%
Avis Budget Car Rental LLC/Avis Budget Finance Inc., Sr. Unsec. Gtd. Notes, 8.25%, 01/15/19(b)		5,000		5,062
H&E Equipment Services Inc., Sr. Unsec. Gtd. Global Notes, 8.38%, 07/15/16(b)		25,000		25,625
Hertz Corp. (The), Sr. Unsec. Gtd. Notes, 7.38%, 01/15/21(b)		10,000		10,250
				40,937
Wireless Telecommunication Services–1.67%
American Tower Corp., Sr. Unsec. Global Notes, 4.63%, 04/01/15		90,000		94,159
Clearwire Communications LLC/Clearwire Finance Inc., Sr. Sec. Gtd. Notes, 12.00%, 12/01/15(b)		25,000		27,125
Cricket Communications, Inc., Sr. Unsec. Gtd. Notes, 7.75%, 10/15/20(b)		15,000		14,400
Crown Castle Towers LLC, Sr. Sec. Gtd. Notes, 4.88%, 08/15/20(b)		120,000		115,500
MetroPCS Wireless Inc., Sr. Unsec. Gtd. Notes, 7.88%, 09/01/18		5,000		5,178
SBA Telecommunications Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 08/15/19		25,000		27,375
Sprint Capital Corp., Sr. Unsec. Gtd. Global Notes, 6.90%, 05/01/19		10,000		9,987
6.88%, 11/15/28		35,000		30,669
Sprint Nextel Corp., Sr. Unsec. Notes, 8.38%, 08/15/17		10,000		10,675
Wind Acquisition Finance S.A. (Luxembourg), Sr. Sec. Gtd. Sub. Notes, 11.75%, 07/15/17(b)		50,000		56,250
				391,318
Total Bonds & Notes (Cost $19,690,340)				20,713,183
Municipal Obligations–2.95%
Alameda (County of) Joint Powers Authority (Build America Bonds); Series 2010 A, Lease RB, 7.05%, 12/01/44		55,000		54,616
Florida (State of) Development Finance Corp. (Palm Bay Academy Inc.); Series 2006 B, Taxable RB, 7.50%, 05/15/17		65,000		54,996
Georgia (State of) Municipal Electric Authority (Plant Vogtle Units 3 & 4 Project J); Series 2010 A, Taxable Build America RB, 6.64%, 04/01/57		110,000		108,382
Kentucky (State of) Asset / Liability Commission; Series 2010, Taxable General Fund RB, 3.17%, 04/01/18		90,000		87,962
New Jersey (State of) Transportation Trust Fund Authority (Build America Bonds); Series 2010 C, Taxable RB, 5.75%, 12/15/28		105,000		102,971
New York (City of) Transitional Finance Authority (Build America Bonds); Series 2010, Taxable RB, 5.57%, 11/01/38		55,000		54,626
Ohio (State of) American Municipal Power Inc., Series 2010, Combined Hydroelectric RB, 8.08%, 02/15/50		110,000		118,766
Texas (State of) Transportation Commission (Build America Bonds); Series 2010 B, Taxable First Tier RB, 5.18%, 04/01/30		110,000		110,231
Total Municipal Obligations (Cost $699,523)				692,550
Asset-Backed Securities–2.60%
Capital One Multi-Asset Execution Trust–Series 2006-C1, Class C, Floating Rate Pass Through Ctfs., 0.55%, 03/17/14(d)		100,000		99,470
Countrywide Asset-Backed Ctfs.–Series 2007-4, Class A1B, Pass Through Ctfs., 5.81%, 09/25/37		61,882		60,890
Credit Suisse Mortgage Capital Ctfs.–Series 2009-2R, Class 1A11, Floating Rate Pass Through Ctfs., 2.88%, 09/26/34(b)(d)		121,011		114,632
TIAA Seasoned Commercial Mortgage Trust–Series 2007-C4, Class A2, Variable Rate Pass Through Ctfs., 5.77%, 08/15/39(d)		45,000		47,342
Wachovia Bank Commercial Mortgage Trust–Series 2005-C21, Class AJ, Variable Rate Pass Through Ctfs., 5.20%, 10/15/44(d)		110,000		105,386
Wells Fargo Mortgage Backed Securities Trust–Series 2004-Z, Class 2A1, Floating Rate Pass Through Ctfs., 2.76%, 12/25/34(d)		189,618		181,965
Total Asset-Backed Securities (Cost $582,858)				609,685
U.S. Treasury Securities–1.94%
U.S. Treasury Bills–0.21%
0.19%, 01/20/11(g)(h)		50,000		49,995
U.S. Treasury Bonds–1.73%
4.25%, 05/15/39		100,000		98,469
4.50%, 08/15/39		300,000		307,969
				406,438
Total U.S. Treasury Securities (Cost $467,678)				456,433

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Diversified Income Fund

	Principal
	Amount		Value
U.S. Government Sponsored Mortgage-Backed Securities–1.71%
Federal Home Loan Mortgage Corp. (FHLMC)–0.83%
Pass Through Ctfs., 6.50%, 05/01/16 to 08/01/32	$	9,974	$	11,147
6.00%, 05/01/17 to 12/01/31		62,741		68,829
5.50%, 09/01/17		34,697		37,256
7.00%, 08/01/21		67,079		76,442
				193,674
Federal National Mortgage Association (FNMA)–0.74%
Pass Through Ctfs.,
7.00%, 02/01/16 to 09/01/32		23,135		26,190
6.50%, 05/01/16 to 10/01/35		16,489		18,431
5.00%, 11/01/18		35,122		37,614
7.50%, 04/01/29 to 10/01/29		73,407		84,189
8.00%, 04/01/32		5,966		6,910
				173,334
Government National Mortgage Association (GNMA)–0.14%
Pass Through Ctfs., 7.50%, 06/15/23		10,950		12,635
8.50%, 11/15/24		6,054		7,229
7.00%, 07/15/31 to 08/15/31		2,352		2,700
6.50%, 11/15/31 to 03/15/32		5,188		5,891
6.00%, 11/15/32		4,817		5,319
				33,774
Total U.S. Government Sponsored Mortgage-Backed Securities (Cost $365,477)				400,782
	Shares
Common Stocks & Other Equity Interests–0.01%
Broadcasting–0.01%
Adelphia Communications Corp.,(i)		900		900
Adelphia Recovery Trust, Series ACC-1(i)		87,412		874
Total Common Stocks & Other Equity Interests (Cost $22,181)				1,774
Money Market Funds–1.45%
Liquid Assets Portfolio–Institutional Class(j)		169,848		169,848
Premier Portfolio–Institutional Class(j)		169,848		169,848
Total Money Market Funds (Cost $339,696)				339,696
TOTAL INVESTMENTS–98.95% (Cost $22,167,753)				23,214,103
OTHER ASSETS LESS LIABILITIES–1.05%				246,578
NET ASSETS–100.00%			$	23,460,681

Investment Abbreviations:

Ctfs.	– Certificates
Deb.	– Debentures
Disc.	– Discounted
Gtd.	– Guaranteed
Jr.	– Junior
RB	– Revenue Bonds
REIT	– Real Estate Investment Trust
Sec.	– Secured
Sr.	– Senior
Sub.	– Subordinated
Unsec.	– Unsecured
Unsub.	– Unsubordinated

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2010 was $5,244,552 which represented 22.35% of the Fund’s Net Assets.
(c)	Step coupon bond issued at discount. The interest rate represents the coupon rate at which the bond will accrue at a specified future date.
(d)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2010.
(e)	Perpetual bond with no specified maturity date.
(f)	Defaulted security. Currently, the issuer is partially or fully in default with respect to interest payments. The value of this security at December 31, 2010 represented less than 1% of the Fund’s Net Assets.
(g)	All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1K and Note 4.
(h)	Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund.
(i)	Non-income producing security acquired as part of the Adelphia Communications bankruptcy reorganization.
(j)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Diversified Income Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $21,828,057)	$	22,874,407
Investments in affiliated money market funds, at value and cost		339,696
Total investments, at value (Cost $22,167,753)		23,214,103
Receivable for:
Variation margin		15,984
Fund shares sold		662
Dividends and interest		331,860
Investment for trustee deferred compensation and retirement plans		41,567
Other assets		368
Total assets		23,604,544
Liabilities:
Payable for:
Investments purchased		10,150
Fund shares reacquired		19,478
Accrued fees to affiliates		26,980
Accrued other operating expenses		38,131
Trustee deferred compensation and retirement plans		49,124
Total liabilities		143,863
Net assets applicable to shares outstanding	$	23,460,681
Net assets consist of:
Shares of beneficial interest	$	31,365,680
Undistributed net investment income		1,168,966
Undistributed net realized gain (loss)		(10,126,505	)
Unrealized appreciation		1,052,540
	$	23,460,681
Net assets:
Series I	$	23,228,978
Series II	$	231,703
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		3,805,546
Series II		38,163
Series I:
Net asset value per share	$	6.10
Series II:
Net asset value per share	$	6.07

Statement of Operations

For the year ended December 31, 2010

Investment income:
Interest	$	1,407,284
Dividends from affiliated money market funds		454
Total investment income		1,407,738
Expenses:
Advisory fees		146,059
Administrative services fees		91,894
Custodian fees		10,636
Distribution fees — Series II		656
Transfer agent fees		8,480
Trustees’ and officers’ fees and benefits		16,298
Professional services fees		42,039
Other		15,861
Total expenses		331,923
Less: Fees waived, expenses reimbursed and expense offset arrangement(s)		(149,208	)
Net expenses		182,715
Net investment income		1,225,023
Realized and unrealized gain from:
Net realized gain from:
Investment securities		727,825
Futures contracts		86,988
		814,813
Change in net unrealized appreciation of:
Investment securities		247,170
Futures contracts		48,990
		296,160
Net realized and unrealized gain		1,110,973
Net increase in net assets resulting from operations	$	2,335,996

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Diversified Income Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	1,225,023		$	1,404,443
Net realized gain (loss)		814,813			(7,052,675	)
Change in net unrealized appreciation		296,160			8,107,358
Net increase in net assets resulting from operations		2,335,996			2,459,126
Distributions to shareholders from net investment income:
Series I		(1,390,866	)		(2,398,080	)
Series II		(12,740	)		(27,960	)
Total distributions from net investment income		(1,403,606	)		(2,426,040	)
Share transactions–net:
Series I		(1,990,553	)		201,049
Series II		(71,022	)		(122,516	)
Net increase (decrease) in net assets resulting from share transactions		(2,061,575	)		78,533
Net increase (decrease) in net assets		(1,129,185	)		111,619
Net assets:
Beginning of year		24,589,866			24,478,247
End of year (includes undistributed net investment income of $1,168,966 and $1,356,293, respectively)	$	23,460,681		$	24,589,866

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Diversified Income Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is total return comprised of current income and capital appreciation.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an

Invesco V.I. Diversified Income Fund

	independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.

Invesco V.I. Diversified Income Fund

F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Lower-Rated Securities — The Fund may invest in lower-quality debt securities, i.e., “junk bonds”. Investments in lower-rated securities or unrated securities of comparable quality tend to be more sensitive to economic conditions than higher rated securities. Junk bonds involve a greater risk of default by the issuer because such securities are generally unsecured and are often subordinated to other creditors’ claims.
J.	Dollar Roll and Forward Commitment Transactions — The Fund may engage in dollar roll and forward commitment transactions with respect to mortgage-backed securities issued by GNMA, FNMA and FHLMC. These transactions are often conducted on a to be announced (“TBA”) basis. In a TBA mortgage-backed transaction, the seller does not specify the particular securities to be delivered. Rather, a Fund agrees to accept any security that meets specified terms, such as an agreed upon issuer, coupon rate and terms of the underlying mortgages. TBA mortgage-backed transactions generally settle once a month on a specific date.
	In a dollar roll transaction, the Fund sells a mortgage-backed security held in the Fund to a financial institution such as a bank or broker-dealer, and simultaneously agrees to purchase a substantially similar security (same type, coupon and maturity) from the institution at an agreed upon price and future date. The mortgage-backed securities to be purchased will bear the same coupon as those sold, but generally will be collateralized by different pools of mortgages with different prepayment histories. Based on the typical structure of dollar roll transactions by the Fund, the dollar roll transactions are accounted for as financing transactions in which the Fund receives compensation as either a “fee” or a “drop”. “Fee” income which is agreed upon amongst the parties at the commencement of the dollar roll and the “drop” which is the difference between the selling price and the repurchase price of the mortgage-backed securities are amortized to income. During the period between the sale and purchase settlement dates, the Fund will not be entitled to receive interest and principal payments on securities purchased and not yet settled. Proceeds of the sale may be invested in short-term instruments, and the income from these investments, together with any additional fee income received on the sale, could generate income for the Fund exceeding the yield on the security sold. Dollar roll transactions are considered borrowings under the 1940 Act.
	Forward commitment transactions involve commitments by the Fund to acquire or sell TBA mortgage-backed securities from/to a financial institution, such as a bank or broker-dealer at a specified future date and amount. The TBA mortgage-backed security is marked to market until settlement and the unrealized appreciation or depreciation is recorded in the statement of operations.
	At the time the Fund enters into the dollar roll or forward commitment transaction, mortgage-backed securities or other liquid assets held by the Fund having a dollar value equal to the purchase price or in an amount sufficient to honor the forward commitment will be segregated.
	Dollar roll transactions involve the risk that the market value of the securities retained by the Fund may decline below the price of the securities that the Fund has sold but is obligated to purchase under the agreement. In the event that the buyer of securities in a dollar roll transaction files for bankruptcy or becomes insolvent, the Fund’s use of the proceeds from the sale of the securities may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s obligation to purchase the securities. The return earned by the Fund with the proceeds of the dollar roll transaction may not exceed the return on the securities sold.
	Forward commitment transactions involve the risk that a counter-party to the transaction may fail to complete the transaction. If this occurs, the Fund may lose the opportunity to purchase or sell the security at the agreed upon price. Settlement dates of forward commitment transactions may be a month or more after entering into these transactions and as a result the market values of the securities may vary from the purchase or sale prices. Therefore, forward commitment transactions may increase the Fund’s overall interest rate exposure.
K.	Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the

Invesco V.I. Diversified Income Fund

	exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities.
L.	Collateral — To the extent the Fund has pledged or segregated a security as collateral and that security is subsequently sold, it is the Fund’s practice to replace such collateral no later than the next business day.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.60%
Over $250 million		0	.55%

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, 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 Series I shares to 0.75% and Series II shares to 1.00% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $146,059 and reimbursed Fund expenses of $3,145.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $41,894 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

  Level 1 — Prices are determined using quoted prices in an active market for identical assets.

Invesco V.I. Diversified Income Fund

Level 2 —

Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.

Level 3 —

Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	340,570	$	—	$	900	$	341,470
U.S. Treasury Securities		—		456,433		—		456,433
U.S. Government Sponsored Securities		—		400,782		—		400,782
Corporate Debt Securities		—		20,713,183		—		20,713,183
Asset Backed Securities		—		609,685		—		609,685
Municipal Obligations		—		692,550		—		692,550
	$	340,570	$	22,872,633	$	900	$	23,214,103
Futures*		6,190		—		—		6,190
Total Investments	$	346,760	$	22,872,633	$	900	$	23,220,293

*  Unrealized appreciation.

NOTE 4—Derivative Investments

The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Value of Derivative Instruments at Period-End

The Table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2010:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Interest rate risk
Futures contracts(a)	$	96,680	$	(90,490	)

^(a) Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets & Liabilities.

Effect of Derivative Instruments for the year ended December 31, 2010

  The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on
	Statement of Operations
	Futures*
Realized Gain
Interest rate risk	$	86,988
Change in Unrealized Appreciation
Interest rate risk		48,990
Total	$	135,978

*  The average value of futures outstanding during the period was $8,821,113.

Invesco V.I. Diversified Income Fund

Open Futures Contracts
								Unrealized
	Number of		Month/					Appreciation
Contract	Contracts		Commitment		Value			(Depreciation)
U.S. Treasury 5 Year Notes		34		March-2011/Long	$	4,002,438		$	(60,370	)
U.S. Treasury Ultra Bond		8		March-2011/Long		1,016,750			(11,173	)
U.S. Treasury 30 Year Bonds		4		March-2011/Long		488,500			(18,946	)
Subtotal					$	5,507,688		$	(90,489	)
U.S. Treasury 10 Year Notes		29		March-2011/Short		(3,492,688	)		96,679
Total					$	2,015,000		$	6,190

NOTE 5—Expense Offset Arrangement(s)

The expense offset arrangement is comprised of custodian credits which result from periodic overnight cash balances at the custodian. For the year ended December 31, 2010, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $4.

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $2,539 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 7—Cash Balances

The Fund may borrow for leveraging in an amount up to 5% of the Fund’s total assets (excluding the amount borrowed) at the time the borrowing is made. In doing so, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate. A Fund may not purchase additional securities when any borrowings from banks exceeds 5% of the Fund’s total assets.

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	1,403,606	$	2,426,040

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	1,214,340
Net unrealized appreciation — investments		1,046,350
Temporary book/tax differences		(45,374	)
Capital loss carryforward		(10,120,315	)
Shares of beneficial interest		31,365,680
Total net assets	$	23,460,681

  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

Invesco V.I. Diversified Income Fund

Revenue Code and related regulations based on the results of future transactions. The Fund utilized $858,797 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2014	$	341,883
December 31, 2015		221,396
December 31, 2016		2,197,944
December 31, 2017		7,359,092
Total capital loss carryforward	$	10,120,315

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $20,689,151 and $19,386,720, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	1,310,167
Aggregate unrealized (depreciation) of investment securities		(263,817	)
Net unrealized appreciation of investment securities	$	1,046,350
Investments have the same cost for tax and financial statement purposes.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforward, on December 31, 2010, undistributed net investment income was decreased by $8,744, undistributed net realized gain (loss) was increased by $6,028,999 and shares of beneficial interest decreased by $6,020,255. This reclassification had no effect on the net assets of the Fund.

NOTE 11—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		297,335		$	1,831,971			503,808		$	3,031,480
Series II		68			406			961			5,848
Issued as reinvestment of dividends:
Series I		227,266			1,390,866			406,455			2,398,080
Series II		2,092			12,740			4,771			27,960
Reacquired:
Series I		(848,553	)		(5,213,390	)		(882,462	)		(5,228,511	)
Series II		(13,673	)		(84,168	)		(26,192	)		(156,324	)
Net increase (decrease) in share activity		(335,465	)	$	(2,061,575	)		7,341		$	78,533

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 82% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Diversified Income Fund

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																					Ratio of			Ratio of
					Net gains																expenses			expenses
					(losses)																to average			to average net			Ratio of net
	Net asset				on securities						Dividends										net assets			assets without			investment
	value,		Net		(both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	5.88	$	0.31	$	0.28		$	0.59		$	(0.37	)	$	6.10		10.05	%	$	23,229		0.75	%(d)		1.36	%(d)		5.03	%(d)		87	%
Year ended 12/31/09		5.87		0.35		0.29			0.64			(0.63	)		5.88		10.89			24,299		0.74			1.48			5.91			200
Year ended 12/31/08		7.80		0.50		(1.74	)		(1.24	)		(0.69	)		5.87		(15.59	)		24,070		0.75			1.31			6.83			35
Year ended 12/31/07		8.28		0.51		(0.37	)		0.14			(0.62	)		7.80		1.72			38,336		0.75			1.17			6.04			67
Year ended 12/31/06		8.43		0.46		(0.08	)		0.38			(0.53	)		8.28		4.48			46,743		0.75			1.10			5.47			78
Series II
Year ended 12/31/10		5.85		0.29		0.28			0.57			(0.35	)		6.07		9.70			232		1.00	(d)		1.61	(d)		4.78	(d)		87
Year ended 12/31/09		5.83		0.34		0.29			0.63			(0.61	)		5.85		10.70			291		0.99			1.73			5.66			200
Year ended 12/31/08		7.74		0.48		(1.72	)		(1.24	)		(0.67	)		5.83		(15.78	)		409		1.00			1.56			6.58			35
Year ended 12/31/07		8.21		0.48		(0.36	)		0.12			(0.59	)		7.74		1.51			606		1.00			1.42			5.79			67
Year ended 12/31/06		8.36		0.44		(0.09	)		0.35			(0.50	)		8.21		4.17			713		1.00			1.35			5.22			78

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized less than one year, if applicable, and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $24,081 and $262 for Series I and Series II, respectively.

Invesco V.I. Diversified Income Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Diversified Income Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Diversified Income Fund (formerly known as AIM V.I. Diversified Income Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Diversified Income

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,043.70	$	3.86	$	1,021.42	$	3.82		0.75	%
Series II		1,000.00		1,041.80		5.15		1,020.16		5.09		1.00

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Diversified Income 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	2.43%
U.S. Treasury Obligations*	3.67%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Diversified Income Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Dynamics Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

I-VIDYN-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the fiscal year ended December 31, 2010, Invesco V.I. Dynamics Fund had positive double-digit returns but underperformed the Fund’s style-specific benchmark, the Russell Midcap Growth Index. Underperformance was driven primarily by stock selection in several sectors.

     The Fund outperformed the broad market as represented by the S&P 500 Index, as mid-cap stocks generally outperformed large-cap stocks.

     Your Fund’s long-term performance can be found later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	23.82	%
Series II Shares	23.61
S&P 500 Index▼ (Broad Market Index)	15.08
Russell Midcap Growth Index▼ (Style-Specific Index)	26.38
Lipper VUF Mid-Cap Growth Funds Index▼ (Peer Group)	27.62

^▼ Lipper Inc.

How we invest

We believe a growth investment strategy is an essential component of a diversified portfolio.

     Our investment process combines fundamental and quantitative analysis to uncover companies exhibiting long-term, sustainable revenue, earnings and cash flow growth that is not yet reflected by the stock’s market price.

     Our quantitative model ranks companies based on a set of fundamental, valuation and timeliness factors. This quantitative model is designed to identify stocks with the highest probability of meeting our team’s investment criteria. Stocks that are ranked highest by our quantitative model are the focus of our fundamental research efforts.

     Our fundamental analysis focuses on identifying companies and industries with strong drivers of growth. To accomplish this goal, we develop a fully integrated financial model to gain a more complete understanding of the financial health of each investment candidate. Additionally, our research involves due diligence of the

company, which includes a detailed analysis of the strategic plans of the company’s management team. We also analyze key competitors, customers and suppliers to assess the overall attractiveness and growth potential of the industry.

     Risk management plays an important role in portfolio construction, as our target portfolio attempts to limit volatility and downside risk. We seek to accomplish this goal by investing in sectors, industries and companies with attractive fundamental prospects. We limit the Fund’s sector exposure and also seek to minimize stock-specific risk by building a diversified portfolio. (Diversification does not guarantee a profit or eliminate the risk of loss.)

     We consider selling a stock for any of the following reasons:

n	There is a change in fundamentals, market capitalization or deterioration in the timeliness profile.
n	The price target set at purchase has been reached.
n	The investment thesis is no longer valid.
n	Insider selling indicates potential issues.

Market conditions and your Fund

The U.S. economy showed signs of improvement during the Fund’s fiscal year, potentially indicating that the economy had transitioned from a contraction phase into an expansionary phase. Nevertheless, the pace of recovery remained modest, and the transition from government stimulus-induced growth to private economic recovery was uncertain.

     The U.S. Federal Reserve’s (the Fed) federal funds target rate remained low — ranging from zero to 0.25%.¹ Real gross domestic product (GDP) registered positive growth during the reporting period with quarterly annualized increases of 3.7%, 1.7% and 2.6% for the first, second and third quarters of 2010, respectively.² Inflation, measured by the seasonally adjusted Consumer Price Index (CPI), remained relatively benign. While labor markets improved as layoffs moderated, new hiring remained quite weak. Unemployment, after climbing steadily throughout 2009, fell slightly during 2010 to a rate of 9.4% nationwide as of December 2010.³

     While stock market volatility increased significantly during the fiscal year, indexes measuring the performance of large-, mid- and small-cap stocks finished the period with positive, double-digit returns. In terms of investment style, growth stocks outperformed value stocks. The sectors with the highest returns in the Russell Midcap Growth Index included more economically sensitive sectors such as consumer discretionary, industrials, materials and information technology (IT). Conversely, the utilities sector was the only sector with a negative return during the period.

     The Fund had double-digit absolute returns, but underperformed the Russell Midcap Growth Index during the fiscal year. The Fund underperformed by the

Portfolio Composition

By sector

Information Technology	22.4	%
Consumer Discretionary	19.9
Industrials	18.6
Health Care	12.2
Energy	8.7
Financials	6.8
Materials	5.7
Consumer Staples	1.9
Telecommunication Services	1.5
Utilities	0.8
Money Market Funds Plus
Other Assets Less Liabilities	1.5

Top 10 Equity Holdings*

1.	AGCO Corp.	1.9	%
2.	Pioneer Natural Resources Co.	1.8
3.	Affiliated Managers Group, Inc.	1.7
4.	Concho Resources Inc.	1.7
5.	Nordstrom, Inc.	1.6
6.	Crown Holdings, Inc.	1.6
7.	Avago Technologies Ltd.	1.6
8.	MGM Resorts International	1.6
9.	Albemarle Corp.	1.6
10.	Universal Health Services, Inc.- Class B	1.6

Total Net Assets	$53.5 million
Total Number of Holdings*		92

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.

Invesco V.I. Dynamics Fund

widest margin in the consumer discretionary and materials sectors. Some of this underperformance was offset by outperformance in other sectors, including utilities, industrials, energy and IT.

     The Fund underperformed most significantly in the consumer discretionary sector, primarily driven by stock selection. Within this sector, key detractors from performance included for-profit education services providers ITT Educational Services and Grand Canyon Education as well as discount department store operator J.C. Penney. We sold ITT Educational Services and J.C. Penney.

     Another area of weakness for the Fund was the materials sector, where the Fund’s holdings generally underperformed those of the Russell Midcap Growth Index. Within this sector, holdings that detracted from performance included steel producer Steel Dynamics and fertilizer maker Intrepid Potash. We sold these two holdings.

     Some of this underperformance was offset by outperformance in other sectors. The Fund outperformed the Russell Midcap Growth Index by the widest margin in the utilities sector, due to stock selection and an underweight position. One holding that contributed to performance was electric power generation plant operator KGen Power. This underweight position was a benefit as this more defensive sector was the weakest-performing sector in the Russell Midcap Growth Index during the reporting period.

     Outperformance in the industrials sector was due to stock selection and an overweight position. The leading contributor to overall Fund performance was electrical products maker Baldor Electric. The stock price of this holding appreciated following the announcement that the company was being acquired at a premium by a competitor. We sold the Fund’s position in this holding following this positive news, locking in gains for shareholders.

     Outperformance in the energy sector was driven by stock selection. Two examples of energy holdings that contributed to performance included oil and gas exploration and production firms Concho Resources and Oasis Petroleum.

     The Fund outperformed in the IT sector due to stock selection. One of the leading contributors to performance in this sector was enterprise software maker Tibco Software. This company benefited from strong growth in revenues and earnings during the period.

     During the fiscal year, we reduced the Fund’s exposure in the financials and energy sectors. Proceeds from the sale of holdings in these sectors were used to add exposure in other sectors such as IT.

     As we’ve discussed, the stock market experienced significant volatility during the fiscal year. We would like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult a financial adviser to discuss your individual financial program. We thank you for your commitment to Invesco V.I. Dynamics Fund.

1	U.S. Federal Reserve
2	Bureau of Economic Analysis
3	Bureau of Labor Statistics

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Paul Rasplicka
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Dynamics Fund. He began his investment career in 1982 and joined Invesco in 1998. Mr. Rasplicka is a magna cum laude graduate of the University of Colorado at Boulder with a B.S. in business administration. He earned an M.B.A. from the University of Chicago. He is also a Charted Investment Counselor.

Brent Lium
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Dynamics Fund. He joined Invesco in 2003. Mr. Lium earned a B.B.A. from Texas A&M University and an M.B.A. from the University of Texas at Austin.

Assisted by the Mid Cap Growth Team

Invesco V.I. Dynamics Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Fund data from 8/22/97, index data from 8/31/97

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a

doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (8/22/97)			4.46	%
	10	Years	-0.33
	5	Years	3.59
	1	Year	23.82
Series II Shares
	10	Years	-0.55	%
	5	Years	3.39
	1	Year	23.61

Series II shares incepted on April 30, 2004. Performance shown prior to that date is that of Series I shares, restated to reflect the higher 12b-1 fees applicable to Series II. Series I performance reflects any applicable fee waivers or expense reimbursements. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your

variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.31% and 1.46%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.34% and 1.59%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Dynamics Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance

Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2012. See current prospectus for more information.

Invesco V.I. Dynamics Fund

Invesco V.I. Dynamics Fund’s investment objective is long-term growth of capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

     Growth stocks tend to be more expensive relative to their earnings or assets. compared with other types of stock. As a result, they tend to be more sensitive to changes in their earnings and can be more volatile.

     Stocks of small and mid-sized companies tend to be more vulnerable to adverse developments in the above factors and may have little or no operating history or track record of success, and limited product lines, markets, management and financial resources. The securities of small and mid-sized companies may be more volatile due to less market interest and less publicly available information about the issuer. They also may be illiquid or restricted as to resale, or may trade less frequently and in smaller volumes, all of which may cause difficulty when establishing or closing a position at a desirable price.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Russell Midcap^® Growth Index is an unmanaged index considered representative of mid-cap growth stocks. The Russell Midcap Growth Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Lipper VUF Mid-Cap Growth Funds Index is an unmanaged index considered representative of mid-cap growth variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Dynamics Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–98.53%
Aerospace & Defense–1.27%
BE Aerospace, Inc.(b)		18,349	$	679,464
Air Freight & Logistics–1.40%
UTi Worldwide, Inc.		35,356		749,547
Apparel Retail–1.13%
Rue21, Inc.(b)		20,633		604,753
Apparel, Accessories & Luxury Goods–1.53%
Coach, Inc.		14,778		817,371
Application Software–2.55%
Autodesk, Inc.(b)		12,652		483,307
Citrix Systems, Inc.(b)		5,441		372,219
TIBCO Software Inc.(b)		25,716		506,862
				1,362,388
Asset Management & Custody Banks–1.69%
Affiliated Managers Group, Inc.(b)		9,131		905,978
Auto Parts & Equipment–1.89%
BorgWarner, Inc.(b)		10,269		743,065
Gentex Corp.		9,047		267,429
				1,010,494
Automotive Retail–1.21%
O’Reilly Automotive, Inc.(b)		10,763		650,300
Biotechnology–1.63%
Human Genome Sciences, Inc.(b)		14,770		352,855
United Therapeutics Corp.(b)		8,204		518,657
				871,512
Broadcasting–1.04%
Discovery Communications, Inc.–Class A(b)		13,340		556,278
Casinos & Gaming–2.45%
Las Vegas Sands Corp.(b)		10,152		466,484
MGM Resorts International(b)		56,873		844,564
				1,311,048
Coal & Consumable Fuels–1.10%
Arch Coal, Inc.		16,779		588,272
Communications Equipment–0.89%
Finisar Corp.(b)		16,093		477,801
Computer Storage & Peripherals–1.05%
NetApp, Inc.(b)		10,239		562,735
Construction & Engineering–0.81%
Foster Wheeler AG (Switzerland)(b)		12,525		432,363
Construction, Farm Machinery & Heavy Trucks–2.95%
AGCO Corp.(b)		20,564		1,041,772
Navistar International Corp.(b)		9,278		537,289
				1,579,061
Consumer Finance–1.49%
Discover Financial Services		42,964		796,123
Data Processing & Outsourced Services–1.52%
Alliance Data Systems Corp.(b)(c)		11,442		812,725
Department Stores–3.08%
Macy’s, Inc.		30,862		780,809
Nordstrom, Inc.		20,482		868,027
				1,648,836
Education Services–0.80%
Grand Canyon Education, Inc.(b)		21,941		429,824
Electronic Components–1.25%
Amphenol Corp.–Class A		12,729		671,837
Environmental & Facilities Services–1.05%
Republic Services, Inc.		18,824		562,085
Health Care Equipment–2.36%
American Medical Systems Holdings, Inc.(b)		22,891		431,724
CareFusion Corp.(b)		21,202		544,892
NuVasive, Inc.(b)		11,223		287,870
				1,264,486
Health Care Facilities–2.18%
Brookdale Senior Living Inc.(b)		15,554		333,011
Universal Health Services, Inc.–Class B		19,246		835,661
				1,168,672
Health Care Services–0.94%
Fresenius Medical Care AG & Co. KGaA (Germany)		8,666		500,919
Hotels, Resorts & Cruise Lines–3.36%
Ctrip.com International, Ltd.–ADR (China)(b)		10,370		419,467
Marriott International Inc.–Class A		15,361		638,096
Orient-Express Hotels Ltd.–Class A (Bermuda)(b)		57,174		742,690
				1,800,253
Household Products–0.59%
Church & Dwight Co., Inc.		4,554		314,317

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Dynamics Fund

	Shares		Value
Human Resource & Employment Services–2.03%
Manpower Inc.		8,333	$	522,979
Robert Half International, Inc.		18,447		564,478
				1,087,457
Independent Power Producers & Energy Traders–0.82%
KGEN Power Corp. (Acquired 01/12/07, Cost $613,032)(b)(d)		43,788		437,880
Industrial Machinery–3.31%
Flowserve Corp.		5,555		662,267
Gardner Denver Inc.		7,103		488,829
Kennametal Inc.		15,681		618,772
				1,769,868
Internet Software & Services–2.13%
Akamai Technologies, Inc.(b)		6,251		294,110
MercadoLibre Inc.(b)		5,003		333,450
VeriSign, Inc.		15,626		510,501
				1,138,061
IT Consulting & Other Services–2.46%
Cognizant Technology Solutions Corp.–Class A(b)		8,941		655,286
Teradata Corp.(b)		16,047		660,494
				1,315,780
Life Sciences Tools & Services–2.03%
Life Technologies Corp.(b)		10,148		563,214
Pharmaceutical Product Development, Inc.		19,232		521,957
				1,085,171
Managed Health Care–1.89%
Aetna Inc.		17,502		533,986
Aveta, Inc.(b)(d)		80,000		480,000
				1,013,986
Metal & Glass Containers–1.62%
Crown Holdings, Inc.(b)		25,929		865,510
Oil & Gas Equipment & Services–1.84%
Oil States International, Inc.(b)		6,565		420,751
Weatherford International Ltd.(b)		24,769		564,733
				985,484
Oil & Gas Exploration & Production–5.73%
Concho Resources Inc.(b)		10,311		903,966
Continental Resources, Inc.(b)		10,779		634,344
Oasis Petroleum Inc.(b)		20,428		554,007
Pioneer Natural Resources Co.		11,238		975,683
				3,068,000
Packaged Foods & Meats–1.34%
Hershey Co. (The)		15,222		717,717
Pharmaceuticals–1.19%
Shire PLC (United Kingdom)		26,432		636,669
Precious Metals & Minerals–0.25%
Stillwater Mining Co.(b)		6,229		132,989
Property & Casualty Insurance–0.82%
Assured Guaranty Ltd.		24,657		436,429
Publishing–1.14%
McGraw-Hill Cos., Inc. (The)		16,777		610,851
Real Estate Services–1.56%
Jones Lang LaSalle Inc.		9,945		834,584
Research & Consulting Services–1.48%
IHS Inc.–Class A(b)		9,861		792,726
Restaurants–1.06%
Texas Roadhouse, Inc.(b)		32,960		565,923
Security & Alarm Services–0.92%
Corrections Corp. of America(b)		19,700		493,682
Semiconductor Equipment–2.08%
Lam Research Corp.(b)		10,498		543,586
Teradyne, Inc.(b)		40,391		567,090
				1,110,676
Semiconductors–4.57%
Altera Corp.		8,586		305,490
Avago Technologies Ltd. (Singapore)		30,037		855,154
Broadcom Corp.–Class A		6,524		284,120
Cavium Networks, Inc.(b)		13,069		492,440
Marvell Technology Group Ltd.(b)		27,455		509,290
				2,446,494
Specialized Finance–1.24%
Moody’s Corp.		25,007		663,686
Specialty Chemicals–3.79%
Albemarle Corp.		15,079		841,107
Lubrizol Corp. (The)		6,993		747,412
LyondellBasell Industries N.V.–Class A (Netherlands)(b)		12,721		437,602
				2,026,121
Specialty Stores–1.17%
Ulta Salon, Cosmetics & Fragrance, Inc.(b)		18,476		628,184

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Dynamics Fund

	Shares		Value
Systems Software–2.56%
Check Point Software Technologies Ltd. (Israel)(b)		12,713	$	588,103
Rovi Corp.(b)		12,604		781,574
				1,369,677
Technology Distributors–1.39%
Avnet, Inc.(b)		14,239		470,314
Tech Data Corp.(b)		6,164		271,339
				741,653
Trading Companies & Distributors–1.58%
Fastenal Co.		4,894		293,200
WESCO International, Inc.(b)		10,430		550,704
				843,904
Trucking–1.85%
J.B. Hunt Transport Services, Inc.		15,909		649,246
Swift Transportation Co.(b)		27,291		341,411
				990,657
Wireless Telecommunication Services–1.47%
Crown Castle International Corp.(b)		12,649		554,406
Millicom International Cellular S.A. (Luxembourg)(b)		2,413		230,683
				785,089
Total Common Stocks & Other Equity Interests (Cost $43,524,717)				52,724,350
Money Market Funds–1.89%
Liquid Assets Portfolio–Institutional Class(e)		506,744		506,744
Premier Portfolio–Institutional Class(e)		506,744		506,744
Total Money Market Funds (Cost $1,013,488)				1,013,488
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.42% (Cost $44,538,205)				53,737,838
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–1.17%
Liquid Assets Portfolio–Institutional Class (Cost $624,268)(e)(f)		624,268		624,268
TOTAL INVESTMENTS–101.59% (Cost $45,162,473)			$	54,362,106
OTHER ASSETS LESS LIABILITIES–(1.59)%				(851,822	)
NET ASSETS–100.00%			$	53,510,284

Investment Abbreviations:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	All or a portion of this security was out on loan at December 31, 2010.
(d)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2010 was $917,880, which represented 1.72% of the Fund’s Net Assets.
(e)	The money market fund and the Fund are affiliated by having the same investment adviser.
(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.

Invesco V.I. Dynamics Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $43,524,717)*	$	52,724,350
Investments in affiliated money market funds, at value and cost		1,637,756
Total investments, at value (Cost $45,162,473)		54,362,106
Receivables for:
Fund shares sold		36,135
Dividends		15,121
Investment for trustee deferred compensation and retirement plans		14,451
Total assets		54,427,813
Liabilities:
Payables for:
Investments purchased		133,933
Fund shares reacquired		41,872
Collateral upon return of securities loaned		624,268
Accrued fees to affiliates		63,121
Accrued other operating expenses		29,676
Trustee deferred compensation and retirement plans		24,659
Total liabilities		917,529
Net assets applicable to shares outstanding	$	53,510,284
Net assets consist of:
Shares of beneficial interest	$	70,433,490
Undistributed net investment income (loss)		(24,395	)
Undistributed net realized gain (loss)		(26,098,444	)
Unrealized appreciation		9,199,633
	$	53,510,284
Net Assets:
Series I	$	53,501,440
Series II	$	8,844
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		3,035,091
Series II		509
Series I:
Net asset value per share	$	17.63
Series II:
Net asset value per share	$	17.38

*  At December 31, 2010, securities with an aggregate value of $609,508 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $1,895)	$	451,517
Dividends from affiliated money market funds (includes securities lending income of $3,938)		5,854
Total investment income		457,371
Expenses:
Advisory fees		371,120
Administrative services fees		174,305
Custodian fees		11,091
Distribution fees — Series II		19
Transfer agent fees		16,741
Trustees’ and officers’ fees and benefits		17,232
Professional services fees		32,495
Other		12,817
Total expenses		635,820
Less: Fees waived		(2,228	)
Net expenses		633,592
Net investment income (loss)		(176,221	)
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains from securities sold to affiliates of $300,066)		6,733,097
Foreign currencies		(6,119	)
		6,726,978
Change in net unrealized appreciation (depreciation) of:
Investment securities		3,592,647
Foreign currencies		(55	)
		3,592,592
Net realized and unrealized gain		10,319,570
Net increase in net assets resulting from operations	$	10,143,349

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Dynamics Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income (loss)	$	(176,221	)	$	(307,133	)
Net realized gain (loss)		6,726,978			(5,129,510	)
Change in net unrealized appreciation		3,592,592			21,019,261
Net increase in net assets resulting from operations		10,143,349			15,582,618
Share transactions–net:
Series I		(7,168,365	)		(6,716,157	)
Series II		—			—
Net increase (decrease) in net assets resulting from share transactions		(7,168,365	)		(6,716,157	)
Net increase in net assets		2,974,984			8,866,461
Net assets:
Beginning of year		50,535,300			41,668,839
End of year (includes undistributed net investment income (loss) of $(24,395) and $(20,836), respectively)	$	53,510,284		$	50,535,300

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Dynamics Fund, (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.

Invesco V.I. Dynamics Fund

	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.

Invesco V.I. Dynamics Fund

H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.745%
Next $250 million		0	.73%
Next $500 million		0	.715%
Next $1.5 billion		0	.70%
Next $2.5 billion		0	.685%
Next $2.5 billion		0	.67%
Next $2.5 billion		0	.655%
Over $10 billion		0	.64%

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such

Invesco V.I. Dynamics Fund

Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, 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 Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $2,223 and class level expenses of $5 for Series II shares.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $124,305 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	52,807,557	$	1,116,669	$	437,880	$	54,362,106

Invesco V.I. Dynamics Fund

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $2,375,912 and securities sales of $998,647, which resulted in net realized gains of $300,066.

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $2,599 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

There were no ordinary income or long-term capital gain distributions paid during the years ended December 31, 2010 and 2009.

Tax Components of Net Assets at Period-End:

	2010
Net unrealized appreciation — investments	$	9,144,651
Temporary book/tax differences		(22,673	)
Post-October deferrals		(1,722	)
Capital loss carryforward		(26,043,462	)
Shares of beneficial interest		70,433,490
Total net assets	$	53,510,284

  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 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 utilized $6,752,681 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	15,509,594
December 31, 2017		10,533,868
Total capital loss carryforward	$	26,043,462

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

Invesco V.I. Dynamics Fund

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $44,994,219 and $52,539,932, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	10,557,674
Aggregate unrealized (depreciation) of investment securities		(1,413,023	)
Net unrealized appreciation of investment securities	$	9,144,651
Cost of investments for tax purposes is $45,217,455.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforward, foreign currency transactions and net operating losses, on December 31, 2010, undistributed net investment income (loss) was increased by $172,662, undistributed net realized gain (loss) was increased by $48,551,104 and shares of beneficial interest decreased by $48,723,766. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		1,039,355		$	16,227,294			838,528		$	9,769,860
Series II		—			—			—			—
Reacquired:
Series I		(1,555,102	)		(23,395,659	)		(1,457,783	)		(16,486,017	)
Series II		—			—			—			—
Net increase (decrease) in share activity		(515,747	)	$	(7,168,365	)		(619,255	)	$	(6,716,157	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 71% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Dynamics Fund

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																			Ratio of			Ratio of
						Net gains													expenses			expenses
						(losses)													to average			to average net			Ratio of net
	Net asset		Net			on securities													net assets			assets without			investment
	value,		investment			(both			Total from			Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income			realized and			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)			unrealized)			operations			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/10	$	14.23	$	(0.05	)(c)	$	3.45		$	3.40		$	17.63		23.89	%	$	53,501		1.28	%(d)		1.28	%(d)		(0.36	)%(d)		93	%
Year ended 12/31/09		9.99		(0.08	)(c)		4.32			4.24			14.23		42.44			50,528		1.30			1.33			(0.70	)		97
Year ended 12/31/08		19.24		(0.10	)(c)		(9.15	)		(9.25	)		9.99		(48.08	)		41,664		1.22			1.22			(0.62	)		106
Year ended 12/31/07		17.15		(0.11	)(c)		2.20			2.09			19.24		12.19			122,184		1.11			1.11			(0.58	)		115
Year ended 12/31/06		14.77		(0.09	)		2.47			2.38			17.15		16.11			120,792		1.12			1.13			(0.51	)		142
Series II
Year ended 12/31/10		14.06		(0.08	)(c)		3.40			3.32			17.38		23.61			9		1.45	(d)		1.53	(d)		(0.53	)(d)		93
Year ended 12/31/09		9.88		(0.09	)(c)		4.27			4.18			14.06		42.31			7		1.45			1.58			(0.85	)		97
Year ended 12/31/08		19.06		(0.12	)(c)		(9.06	)		(9.18	)		9.88		(48.16	)		5		1.45			1.47			(0.85	)		106
Year ended 12/31/07		17.04		(0.15	)(c)		2.17			2.02			19.06		11.85			10		1.36			1.36			(0.83	)		115
Year ended 12/31/06		14.71		(0.12	)		2.45			2.33			17.04		15.84			14		1.37			1.38			(0.76	)		142

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year, if applicable, and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Calculated using average shares outstanding.
(d)	Ratios are based on average daily net assets (000’s omitted) of $49,807 and $8 for Series I and Series II shares, respectively.

NOTE 12—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to the Invesco V.I. Capital Development Fund (the “Acquiring Fund”) in exchange for shares of the Acquiring Fund. The Agreement requires approval of the Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

Invesco V.I. Dynamics Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Dynamics Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Dynamics Fund (formerly known as AIM V.I. Dynamics Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Dynamics Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,299.40	$	7.42	$	1,018.75	$	6.52		1.28	%
Series II		1,000.00		1,298.00		8.42		1,017.87		7.40		1.45

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Dynamics Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Financial Services Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

I-VIFSE-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

Effective June 25, 2010, Meggan Walsh assumed sole management of Invesco V.I. Financial Services Fund. She is supported by a team of equity analysts.

     For the 12-month period ended December 31, 2010, Invesco V.I. Financial Services Fund delivered a positive return but underperformed the S&P 500 Index and its style-specific benchmark, the S&P 500 Financials Index. While we managed the Fund for only part of this time, our comments encompass the entire period.

     Investments in commercial banks and insurance firms were the largest contributors to Fund results and only a few holdings detracted from returns for the year. The Fund lagged the S&P 500 Financials Index partly due to a lack of exposure to real estate investment trusts (REITs), which performed well and are a large part of the index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	10.31	%
Series II Shares	10.10
S&P 500 Index▼ (Broad Market Index)	15.08
S&P 500 Financials Index▼ (Style-Specific Index)	12.13
Lipper VUF Financial Services Funds Category Average▼ (Peer Group)	12.34

^▼ Lipper Inc.

How we invest

We seek to identify companies within the financials sector that exhibit attractive total return potential. We emphasize companies with solid balance sheets and operating cash flow that support sustained or increasing dividends and/or share repurchases. Emphasis is placed on companies that we expect will grow cash flows profitably over time. By using fundamental research, financial statement analysis and multiple valuation techniques, we estimate a target price for each stock over a two- to three-year investment horizon. We then construct a portfolio which we believe may provide the best combination of price appreciation potential, dividend income and risk profile. We consider selling or trimming a stock when any of these factors materially change.

Market conditions and your Fund

Equity markets delivered strong returns but were choppy during the fiscal year as investors weighed the competing issues of solid corporate profitability and soft, albeit improving, macroeconomic data. Corporate earnings improved considerably over the past year as high productivity growth and cost-cutting measures made during the economic downturn led to a rebound in margins and profits. However, high unemployment, weak consumer spending and tepid housing data remained as overhangs to the recovery. The sovereign debt crisis also contributed to market volatility as European countries began implementing austerity programs. Most recently, the market reversed course and rallied again during the last four months of the year

on better economic news, ending the fiscal year with double-digit gains.

     All 10 sectors within the S&P 500 Index posted gains for the year. More economically sensitive sectors such as consumer discretionary, industrials and materials had the highest returns, while the less economically sensitive sectors such as health care and utilities had some of the lowest returns. The S&P 500 financials services sector returned 12.13% for the period, slightly below the 15.08% return for the overall S&P 500 Index.

     Commercial banks, and more specifically regional banks, made the largest contribution to Fund results during the period. Among these, Fifth Third Bancorp, Zions Bancorporation and SunTrust Banks were top contributors to the Fund, each producing a double-digit gain. Fifth Third Bancorp reported solid results largely due to improving credit trends. The company was proactive in addressing early stage problem credit during the downturn, and we believed it would be one of the first to move to a more normal run rate. This view appears accurate as Fifth Third Bancorp’s nonperforming assets likely peaked in the first quarter, and the bank has subsequently returned to profitability.

     Insurers also made a strong contribution to results. XL Group, a global insurance company offering commercial and specialty coverage, delivered results in line with expectations and announced a relaunch of their share buyback plan. The company’s balance sheet improved, which led to revaluation of shares.

     The largest detractor from results was investment bank FBR Capital Markets. The company reported losses during the year due to weak equity trading volumes on their brokerage business, and weaker than expected investment banking

Portfolio Composition

By sector

Financials	84.9	%
Information Technology	6.0
Consumer Discretionary	1.3
Money Market Funds Plus
Other Assets Less Liabilities	7.8

Top 10 Equity Holdings*

1.	Capital One Financial Corp.	6.7	%
2.	State Street Corp.	6.1
3.	Legg Mason, Inc.	5.1
4.	Fifth Third Bancorp	4.9
5.	SunTrust Banks, Inc.	4.7
6.	Zions Bancorp	4.7
7.	Federated Investors, Inc.	4.0
8.	XL Group PLC	3.8
9.	American Express Co.	3.8
10.	Bank of America Corp.	3.6

Total Net Assets	$64.3 million
Total Number of Holdings*		36

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.

Invesco V.I. Financial Services Fund

results. We reduced our position in this holding during the period.

     H&R Block was another detractor from results as the company faced both cyclical and secular pressures. While the high unemployment rate lowered the number of tax filers, H&R Block continued to cede market share to online tax preparation providers and smaller independent providers. Shares also were negatively affected by the ongoing regulatory uncertainties with regard to mortgage repurchase liability. More recently, the decision by the Office of the Comptroller of the Currency to not allow HSBC (not a Fund holding) to fund H&R Block’s refund anticipation loans also negatively affected the stock. Although these issues are concerns, we added to the position as we believed the stock’s valuation reflected a greater negative impact than we believed was warranted.

     Since taking over the Fund in June, we made a number of small changes to the portfolio. We added several investment bank holdings, slightly increasing our exposure to regional banks, and we eliminated a number of insurance brokerage holdings. At the end of the year, our largest exposures were in the capital markets and commercial banking industries.

     The fiscal period witnessed a broad recovery in corporate earnings led by strong operating leverage. For financials, credit conditions have broadly recovered in many key areas. There are early signs of loan growth recovery, and some of the largest banks have returned to profitability. However, the unemployment rate remains high and we are cautiously monitoring the durability of the economy’s recovery.

     We believe one of our competitive advantages is a disciplined approach to evaluating financial services companies from a total return perspective; focusing not only on their capital appreciation potential, but also on their current dividend income and capital preservation. We would like to take this opportunity to thank you for your investment in Invesco V.I. Financial Services Fund.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Meggan Walsh
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Financial Services Fund. Ms. Walsh joined Invesco in 1991. She began her investment career in 1987. Ms. Walsh earned a B.S. in finance from the University of Maryland and an M.B.A. from Loyola University Maryland.

Invesco V.I. Financial Services Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Fund data from 9/20/99, index data from 9/30/99

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $2,000 and $4,000 is the same size as the space between $4,000 and $8,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (9/20/99)			-1.76	%
	10	Years	-5.13
	5	Years	-12.38
	1	Year	10.31
Series II Shares
	10	Years	-5.34	%
	5	Years	-12.56
	1	Year	10.10

Series II shares incepted on April 30, 2004. Performance shown prior to that date is that of Series I shares, restated to reflect the higher 12b-1 fees applicable to Series II. Series I performance reflects any applicable fee waivers or expense reimbursements. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your

variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.29% and 1.46%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.29% and 1.54%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Financial Services Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable

Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2012. See current prospectus for more information.

Invesco V.I. Financial Services Fund

Invesco V.I. Financial Services Fund’s investment objective is long-term growth of capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

An investment by the Fund in exchange-traded funds (ETFs) generally presents the same primary risks as an investment in a mutual fund. In addition, ETFs may be subject to the following: a discount of the ETF’s shares to its net asset value; failure to develop an active trading market for the ETF’s shares; the listing exchange halting trading of the ETF’s shares; failure of the ETF’s shares to track the referenced index; and holding troubled securities in the referenced index. ETFs may involve duplication of management fees and certain other expenses, as the Fund indirectly bears its proportionate share of any expenses paid by the ETFs in which it invests. Further, certain shares of the ETFs in which the Fund may invest are leveraged. The more a fund invests in such leveraged ETFs, the more this leverage will magnify any losses on those investments.

     The Fund’s investments are concentrated in a comparatively narrow segment of the economy, which may make the Fund more volatile.

     The financial services sector is subject to extensive government regulation, which may change frequently. In addition, the profitability of businesses in the financial services sector depends on the availability and cost of money and may fluctuate significantly in response to changes in government regulation, interest rates and general economic conditions. Businesses in the financial sector often operate with substantial financial leverage.

     The Fund’s foreign investments may be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     The Fund may invest a large percentage of its assets in a limited number of securities or other instruments, which could negatively affect the value of the Fund.

     The Fund is non-diversified and can invest a greater portion of its assets in a single issuer. A change in the value of the issuer could affect the value of the Fund more than if it was a diversified Fund.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

     Value stocks may react differently to issuer, political, market and economic developments than the market as a whole and other types of stocks. Value stocks tend to be inexpensive relative to their earnings or assets compared to other types of stocks and may never realize their full value. Value stocks tend to be currently out-of-favor with many investors.

     The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The S&P 500 Financials Index is an unmanaged index considered representative of the financial market.

     The Lipper VUF Financial Services Funds Category Average represents an average of all of the variable insurance underlying funds in the Lipper Financial Services Funds category.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry classifications used in this report are generally classified 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Financial Services Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks–92.17%
Asset Management & Custody Banks–15.22%
Federated Investors, Inc.–Class B		97,409	$	2,549,194
Legg Mason, Inc.		90,809		3,293,642
State Street Corp.		84,898		3,934,173
				9,777,009
Consumer Finance–13.32%
American Express Co.		56,254		2,414,422
Capital One Financial Corp.		101,326		4,312,434
Green Dot Corp.–Class A(b)		5,388		305,715
SLM Corp.(b)		121,162		1,525,430
				8,558,001
Data Processing & Outsourced Services–5.98%
Alliance Data Systems Corp.(b)		14,509		1,030,574
Automatic Data Processing, Inc.		40,441		1,871,610
Heartland Payment Systems, Inc.		61,017		940,882
				3,843,066
Diversified Banks–4.35%
Societe Generale (France)		27,977		1,507,468
US Bancorp		47,825		1,289,840
				2,797,308
Diversified Capital Markets–3.15%
UBS AG (Switzerland)(b)		122,692		2,020,737
Insurance Brokers–2.12%
Marsh & McLennan Cos., Inc.		49,751		1,360,192
Investment Banking & Brokerage–8.09%
Charles Schwab Corp. (The)		91,331		1,562,673
FBR Capital Markets Corp.(b)		164,081		626,790
Lazard Ltd.–Class A		29,300		1,157,057
Morgan Stanley(b)		68,140		1,854,089
				5,200,609
Life & Health Insurance–4.59%
Lincoln National Corp.		45,292		1,259,570
Prudential Financial, Inc.		6,486		380,793
StanCorp Financial Group, Inc.		29,028		1,310,324
				2,950,687
Other Diversified Financial Services–8.26%
Bank of America Corp.(b)		174,902		2,333,193
Citigroup Inc.(b)		406,230		1,921,468
JPMorgan Chase & Co.		24,843		1,053,840
				5,308,501
Property & Casualty Insurance–4.10%
Allstate Corp. (The)		5,407		172,375
XL Group PLC (Ireland)		112,967		2,464,940
				2,637,315
Regional Banks–15.19%
Fifth Third Bancorp		215,710		3,166,623
First Midwest Bancorp, Inc.		32,764		377,441
SunTrust Banks, Inc.		101,611		2,998,541
Wilmington Trust Corp.		54,704		237,415
Zions Bancorp.		123,073		2,982,059
				9,762,079
Reinsurance–1.79%
Transatlantic Holdings, Inc.		22,261		1,149,113
Specialized Consumer Services–1.30%
H&R Block, Inc.		70,318		837,487
Specialized Finance–1.37%
Moody’s Corp.		33,064		877,519
Thrifts & Mortgage Finance–3.34%
Capitol Federal Financial Inc.		11,148		132,773
Hudson City Bancorp, Inc.		157,827		2,010,716
				2,143,489
Total Common Stocks (Cost $54,991,348)				59,223,112
Money Market Funds–7.29%
Liquid Assets Portfolio–Institutional Class(c)		2,341,660		2,341,660
Premier Portfolio–Institutional Class(c)		2,341,660		2,341,660
Total Money Market Funds (Cost $4,683,320)				4,683,320
TOTAL INVESTMENTS–99.46% (Cost $59,674,668)				63,906,432
OTHER ASSETS LESS LIABILITIES–0.54%				344,235
NET ASSETS–100.00%			$	64,250,667

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Financial Services Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $54,991,348)	$	59,223,112
Investments in affiliated money market funds, at value and cost		4,683,320
Total investments, at value (Cost $59,674,668)		63,906,432
Receivable for:
Fund shares sold		725,795
Dividends		37,444
Investment for trustee deferred compensation and retirement plans		14,794
Other assets		76
Total assets		64,684,541
Liabilities:
Payable for:
Investments purchased		215,572
Fund shares reacquired		76,200
Accrued fees to affiliates		83,905
Accrued other operating expenses		30,751
Trustee deferred compensation and retirement plans		27,446
Total liabilities		433,874
Net assets applicable to shares outstanding	$	64,250,667
Net assets consist of:
Shares of beneficial interest	$	108,807,012
Undistributed net investment income (loss)		(26,973	)
Undistributed net realized gain (loss)		(48,761,136	)
Unrealized appreciation		4,231,764
	$	64,250,667
Net Assets:
Series I	$	54,081,090
Series II	$	10,169,577
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		9,622,864
Series II		1,830,133
Series I:
Net asset value per share	$	5.62
Series II:
Net asset value per share	$	5.56

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends	$	774,518
Dividends from affiliated money market funds		2,842
Total investment income		777,360
Expenses:
Advisory fees		482,119
Administrative services fees		209,326
Custodian fees		8,197
Distribution fees — Series II		21,866
Transfer agent fees		19,694
Trustees’ and officers’ fees and benefits		17,774
Other		44,902
Total expenses		803,878
Less: Fees waived and expenses reimbursed		(5,483	)
Net expenses		798,395
Net investment income (loss)		(21,035	)
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains (losses) from securities sold to affiliates of $(387,452))		(15,075,948	)
Foreign currencies		(4,218	)
		(15,080,166	)
Change in net unrealized appreciation of investment securities		20,369,027
Net realized and unrealized gain		5,288,861
Net increase in net assets resulting from operations	$	5,267,826

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Financial Services Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income (loss)	$	(21,035	)	$	83,899
Net realized gain (loss)		(15,080,166	)		(7,426,734	)
Change in net unrealized appreciation		20,369,027			22,907,979
Net increase in net assets resulting from operations		5,267,826			15,565,144
Distributions to shareholders from net investment income:
Series I		(56,868	)		(1,643,368	)
Series II		—			(217,704	)
Total distributions from net investment income		(56,868	)		(1,861,072	)
Share transactions–net:
Series I		(7,924,005	)		6,150,080
Series II		1,482,843			2,336,966
Net increase (decrease) in net assets resulting from share transactions		(6,441,162	)		8,487,046
Net increase (decrease) in net assets		(1,230,204	)		22,191,118
Net assets:
Beginning of year		65,480,871			43,289,753
End of year (includes undistributed net investment income (loss) of $(26,973) and $57,948, respectively)	$	64,250,667		$	65,480,871

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Financial Services Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital growth.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as

Invesco V.I. Financial Services Fund

	institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the

Invesco V.I. Financial Services Fund

	financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Other Risks — The Fund’s investments are concentrated in a comparatively narrow segment of the economy, which may make the Fund more volatile.
	The financial services sector is subject to extensive government regulation, which may change frequently. In addition, the profitability of businesses in the financial service sector depends on the availability and cost of money and may fluctuate significantly in response to changes in government regulation, interest rates and general economic conditions. Businesses in the financial sector often operate with substantial financial leverage.
J.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
K.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.75%
Next $250 million		0	.74%
Next $500 million		0	.73%
Next $1.5 billion		0	.72%
Next $2.5 billion		0	.71%
Next $2.5 billion		0	.70%
Next $2.5 billion		0	.69%
Over $10 billion		0	.68%

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the

Invesco V.I. Financial Services Fund

numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $5,483.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $159,326 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	62,398,964	$	1,507,468	$	—	$	63,906,432

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities sales of $294,303, which resulted in net realized gains (losses) of $(387,452).

Invesco V.I. Financial Services Fund

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $2,637 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	56,868	$	1,861,072

Tax Components of Net Assets at Period-End:

	2010
Net unrealized appreciation — investments	$	1,160,864
Temporary book/tax differences		(25,317	)
Post-October deferrals		(804,658	)
Capital loss carryforward		(44,887,234	)
Shares of beneficial interest		108,807,012
Total net assets	$	64,250,667

  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 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 December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	22,458,450
December 31, 2017		7,806,568
December 31, 2018		14,622,216
Total capital loss carryforward	$	44,887,234

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

Invesco V.I. Financial Services Fund

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $21,507,549 and $31,131,843, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	5,762,678
Aggregate unrealized (depreciation) of investment securities		(4,601,814	)
Net unrealized appreciation of investment securities	$	1,160,864
Cost of investments for tax purposes is $62,745,568.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of partnerships, net operating losses and foreign currency transactions, on December 31, 2010, undistributed net investment income (loss) was decreased by $7,018, undistributed net realized gain (loss) was increased by $24,361 and shares of beneficial interest decreased by $17,343. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Year ended						Year ended
	December 31, 2010(a)						December 31, 2009
	Shares			Amount			Shares			Amount
Sold:
Series I		3,799,790		$	20,823,469			6,175,150		$	25,003,515
Series II		854,275			4,505,738			825,270			3,236,356
Issued as reinvestment of dividends:
Series I		10,978			56,868			324,776			1,643,368
Series II		—			—			43,454			217,704
Reacquired:
Series I		(5,477,337	)		(28,804,342	)		(4,778,335	)		(20,496,803	)
Series II		(580,137	)		(3,022,895	)		(260,764	)		(1,117,094	)
Net increase (decrease) in share activity		(1,392,431	)	$	(6,441,162	)		2,329,551		$	8,487,046

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 75% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Financial Services Fund

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																															Ratio of
																												Ratio of			expenses
						Net gains																						expenses			to average
						(losses)																						to average			net assets			Ratio of net
	Net asset		Net			on securities						Dividends			Distributions													net assets			without			investment
	value,		investment			(both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income			realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)(a)			unrealized)			operations			income			gains			Distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	5.10	$	—		$	0.53		$	0.53		$	(0.01	)	$	—		$	(0.01	)	$	5.62		10.31	%	$	54,081		1.21	%(d)		1.22	%(d)		0.00	(d)		35	%
Year ended 12/31/09	��	4.12		0.01			1.12			1.13			(0.15	)		—			(0.15	)		5.10		27.43			57,620		1.27			1.28			0.18			22
Year ended 12/31/08		12.26		0.24			(7.46	)		(7.22	)		(0.24	)		(0.68	)		(0.92	)		4.12		(59.44	)		39,421		1.22			1.23			2.71			47
Year ended 12/31/07		17.41		0.27			(4.04	)		(3.77	)		(0.29	)		(1.09	)		(1.38	)		12.26		(22.22	)		85,144		1.11			1.11			1.61			9
Year ended 12/31/06		15.26		0.23			2.28			2.51			(0.26	)		(0.10	)		(0.36	)		17.41		16.52			146,092		1.12			1.12			1.44			14
Series II
Year ended 12/31/10		5.05		(0.01	)		0.52			0.51			—			—			—			5.56		10.10			10,170		1.44	(d)		1.47	(d)		(0.23	)(d)		35
Year ended 12/31/09		4.08		—			1.11			1.11			(0.14	)		—			(0.14	)		5.05		27.30			7,861		1.44			1.53			0.01			22
Year ended 12/31/08		12.17		0.21			(7.39	)		(7.18	)		(0.23	)		(0.68	)		(0.91	)		4.08		(59.56	)		3,869		1.44			1.48			2.49			47
Year ended 12/31/07		17.33		0.22			(4.00	)		(3.78	)		(0.29	)		(1.09	)		(1.38	)		12.17		(22.39	)		3,688		1.36			1.36			1.36			9
Year ended 12/31/06		15.23		0.20			2.26			2.46			(0.26	)		(0.10	)		(0.36	)		17.33		16.22			1,664		1.37			1.37			1.19			14

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $55,536 and $8,746 for Series I and Series II, shares, respectively.

NOTE 12—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco V.I. Dividend Growth Fund (the “Acquiring Fund”) in exchange for shares of the Acquiring Fund. The Agreement requires approval of the Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

Invesco V.I. Financial Services Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Financial Services Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Financial Services Fund, (formerly known as AIM V.I. Financial Services Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Financial Services Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,157.60	$	6.74	$	1,018.95	$	6.31		1.24	%
Series II		1,000.00		1,158.30		7.89		1,017.90		7.38		1.45

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Financial Services 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100.00%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Financial Services Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Global Health Care Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

I-VIGHC-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

During the year ended December 31, 2010, the economy showed signs of improvement, fueling equity markets’ continued upward trajectory. The health care sector, however, suffered as a result of the rotation to more cyclical stocks as investors anticipated an economic recovery. As a result, Invesco V.I. Global Health Care Fund underperformed the broad market, as measured by the MSCI World Index. The Fund, however, outperformed its style-specific index the MSCI World Health Care Index as a result of both stock selection and market allocation, particularly in the biotechnology and managed health care industries.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	5.29	%
Series II Shares	5.00
MSCI World Index▼ (Broad Market Index)	11.76
MSCI World Health Care Index▼ (Style-Specific Index)	2.41
Lipper VUF Health/Biotechnology Funds Category Average▼ (Peer Group)	9.19

^▼Lipper Inc.

How we invest

We seek health care stocks of all market capitalizations from around the world that we believe are attractively priced and have the potential to benefit from long-term earnings and cash flow growth.

     In selecting securities for the Fund, we first screen the global investment universe. Stocks of at least $200 million in market capitalization are considered for further evaluation if they are identified as having attractive growth prospects relative to their current valuations. We use a research-oriented bottom-up investment approach, focusing on company fundamentals in an effort to uncover future growth prospects which are not yet appreciated by the market.

     In analyzing specific industries for possible investment, we ordinarily look for several of the following characteristics: above-average growth and demand;

scientific and medical advances; below-average reimbursement risk; and high barriers to entry.

     In analyzing specific companies for possible investment, we ordinarily look for several of the following characteristics: leading companies with defensible franchises; companies in the midst of a new product cycle; value-added and/or niche-oriented products and/or services; exhibiting sustainable revenue growth; potential to expand profit margins and improve profitability; superior earnings-per-share growth; strong balance sheet and moderate financial leverage; and a capable management team.

     Stock selection is then further refined by valuation analysis. In general, we target stocks trading at compelling valuations based upon one or more of the following parameters: price-to-earnings (P/E); P/E ratio versus expected earnings

per share growth rate; enterprise value to earnings-before-interest-depreciation-and-taxes (EBITDA); discounted cash flow analysis; and sum of parts analysis.

     The resulting target portfolio consists of 50 to 80 individual securities with exposure across most subsectors of health care and diversified by region. Additionally, position size is limited in an effort to maximize risk-adjusted returns.

     We may reduce or eliminate exposure to a stock when:

n	A stock’s price reaches its valuation target.
n	A company’s fundamentals deteriorate.
n	A company no longer meets our investment criteria.

Market conditions and your Fund

Equity markets were choppy during the fiscal year as investors weighed the competing issues of solid corporate profits and soft macroeconomic data. Corporate earnings were largely positive, but often overshadowed by concerns about high unemployment, a lack of consumer spending, soft housing data and the possibility of additional Federal Reserve accommodation. After rising through April, the major equity indexes sold off precipitously in May as the sovereign debt crisis unfolded in the eurozone while U.S. economic indicators remained weak, prompting fears of a double-dip recession. Uncertainty created by the debt crisis combined with subdued employment, consumer spending and housing data added to concerns that the recovery was slowing to a subnormal growth rate. Just as abruptly, however, the markets reversed course and rallied in September and October on modestly better economic news, ending the year with double-digit gains.

Portfolio Composition

By country

United States	76.1	%
Switzerland	6.1
Germany	4.2
United Kingdom	2.6
Ireland	2.2
Countries each less than 2.0% of portfolio	5.3
Money Market Funds Plus Other Assets Less Liabilities	3.5

Top 10 Equity Holdings*

1.	CVS Caremark Corp.	4.8	%
2.	Thermo Fisher Scientific, Inc.	4.3
3.	Roche Holding AG	4.1
4.	Gilead Sciences, Inc.	3.8
5.	Abbott Laboratories	3.4
6.	Life Technologies Corp.	2.8
7.	Express Scripts, Inc.	2.7
8.	Johnson & Johnson	2.7
9.	WellPoint Inc.	2.7
10.	Aetna, Inc.	2.6

Top Five Industries

1.	Pharmaceuticals	21.9	%
2.	Biotechnology	20.7
3.	Managed Health Care	12.5
4.	Life Sciences Tools & Services	9.7
5.	Health Care Equipment	9.1

Total Net Assets	$150.5 million
Total Number of Holdings*		58

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.

Invesco V.I. Global Health Care Fund

     The major equity indexes garnered positive returns for the fiscal year, and all 10 sectors within the S&P 500 Index posted gains. More economically sensitive sectors such as consumer discretionary, industrials and materials had the highest returns, while the less economically sensitive sectors such as health care had some of the lowest returns.

     Most health care industries contributed to the Fund’s absolute performance over the fiscal year, with the exception of health care equipment, pharmaceuticals and health care supplies. Holdings in biotechnology and managed health care were particularly beneficial from both an absolute basis and relative to the MSCI World Health Care Index. Security selection in the health care equipment and pharmaceuticals industries, however, hurt the Fund’s performance relative to the benchmark during the reporting period.

     Top contributors to the Fund’s absolute performance during the fiscal year were Genzyme, a biotechnology stock in which the Fund was overweight relative to the index, and BioMarin Pharmaceutical, an out-of-index biotechnology stock. Within managed health care, out-of-index holdings AMERIGROUP, Amil Participacoes S.A. and Health Net also benefited the Fund’s relative performance.

     Detractors from Fund performance included Boston Scientific, a health care equipment manufacturer, and Gilead Sciences, a biotechnology firm. It is important to note both stocks were also included in the index, however, the Fund held an overweight exposure. During the reporting period, Boston Scientific settled long-standing stent patent disputes with Johnson & Johnson. Gilead Sciences, however, suffered following their announcement of a reduced sales forecast for 2010 due to the impact of health care reform. Boston Scientific is no longer held by the Fund. Within pharmaceuticals, the largest relative detractor to Fund performance was a lack of exposure in the index holding Novo Nordisk.

     As part of our policy to manage risk, the Fund held derivative instruments in the form of currency forward contracts in order to hedge our European currency exposure. The net cumulative effect of these derivative contracts was positive for Fund performance during the fiscal year.

     We continued to focus on companies with new product cycles, less reimbursement risk and less competition. Relative to the MSCI World Health Care Index, we

maintained a significant underweight position in large-cap pharmaceuticals because many firms face looming patent expirations with limited drug pipelines, which may result in modest, if any, earnings growth.

     It is important to note that we tend to favor profitable large-cap biotechnology companies that are generating sufficient free cash flow rather than small-cap start-ups that typically lack liquidity and earnings. Our emphasis on specialty pharmaceuticals and biotechnology stocks is based on robust in-line portfolios, compelling product pipelines and the view that many of these companies could be targets of ongoing consolidation. Importantly, we believe valuations for many of these companies were near historic lows.

     The majority of the Fund is invested in domestic stocks, where we have found more companies that fit our fundamental selection criteria. The Fund’s international weight was focused mainly on European large-cap pharmaceuticals, which have fewer patent expiration concerns.

     We believe longer term prospects for the health care sector are compelling. We now have clarity about U.S. health care reform, with coverage expansion expected to add 32 million participants, according to the Congressional Budget Office. This could translate into accelerated revenue growth. Internationally, developed markets remained relatively stable, while emerging markets continued to grow rapidly as these countries were expected to spend more on health care as standards of living rise. In our opinion, health care stocks were also inexpensive on both a historical basis and relative to the market, despite having better earnings growth prospects through the economic cycle.

     As always, thank you for your continued investment in Invesco V.I. Global Health Care Fund.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Derek Taner
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Global Health Care Fund. Mr. Tanner joined Invesco in 2005. He began his investment career in 1993. Mr. Tanner earned a B.S. in business administration and an M.B.A. from the Haas School of Business at the University of California (Berkeley).

Dean Dillard
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Global Health Care Fund. Mr. Dillard joined Invesco in 2000. He earned a B.S. in corporate finance from the University of Alabama and an M.B.A. from the Owen School of Business at Vanderbilt University.

Invesco V.I. Global Health Care Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Fund data from 5/21/97, Index data from 5/31/97

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an

investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (5/21/97)		6.62	%
10	Years	1.04
5	Years	2.47
1	Year	5.29
Series II Shares
10	Years	0.78	%
5	Years	2.20
1	Year	5.00

Series II shares incepted on April 30, 2004. Performance shown prior to that date is that of Series I shares, restated to reflect the higher 12b-1 fees applicable to Series II. Series I performance reflects any applicable fee waivers or expense reimbursements. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future

results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.15% and 1.40%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Global Health Care Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered

through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

Invesco V.I. Global Health Care Fund

Invesco V.I. Global Health Care Fund’s investment objective is long-term growth of capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

The Fund may invest a large percentage of its assets in a limited number of securities, which could negatively affect the value of the Fund.

     An investment by the Fund in ETFs generally presents the same primary risks as an investment in a mutual fund. In addition, ETFs may be subject to the following: a discount of the ETF’s shares to its net asset value; failure to develop an active trading market for the ETF’s shares; the listing exchange halting trading of the ETF’s shares; failure of the ETF’s shares to track the referenced index; and holding troubled securities in the referenced index. ETFs may involve duplication of management fees and certain other expenses, as the fund indirectly bears its proportionate share of any expenses paid by the ETFs in which it invests. Further, certain of the ETFs in which each fund may invest are leveraged. The more a fund invests in such leveraged ETFs, the more this leverage will magnify any losses on those investments.

     Fluctuations in the values of synthetic instruments may not correlate perfectly with the instruments they are designed to replicate. Some synthetic instruments are more sensitive to interest rate changes and market price fluctuations than others.

     The Fund’s performance is vulnerable to factors affecting the health care industry, including government regulation, obsolescence caused by scientific advances and technological innovations.

     The Fund’s foreign investments may be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     Securities issued by foreign companies and governments located in developing countries may be affected more negatively by inflation, devaluation of their currencies, higher transaction costs, delays in settlement, adverse political developments, the introduction of capital controls, withholding taxes, nationalization of private assets, expropriation, social unrest, war or lack of timely information than those in developed countries.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

     The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

About indexes used in this report

The MSCI World Index^SM is an unmanaged index considered representative of stocks of developed countries.

     The MSCI World Health Care Index is an unmanaged index considered representative of health care stocks of developed countries.

     The Lipper VUF Health/ Biotechnology Funds Category Average represents an average of all of the variable insurance underlying funds in the Lipper Health/Biotechnology Funds category.

     The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry classifications used in this report are generally classified 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Global Health Care Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–96.48%
Biotechnology–20.67%
Amgen Inc.(b)		66,900	$	3,672,810
Biogen Idec Inc.(b)		34,464		2,310,811
BioMarin Pharmaceutical, Inc.(b)		124,174		3,344,006
Celgene Corp.(b)		40,563		2,398,896
Genzyme Corp.(b)		52,623		3,746,758
Gilead Sciences, Inc.(b)		156,290		5,663,949
Human Genome Sciences, Inc.(b)		57,275		1,368,300
Incyte Corp.(b)		99,747		1,651,810
Pharmasset, Inc.(b)		25,916		1,125,013
Savient Pharmaceuticals Inc.(b)		66,076		736,087
United Therapeutics Corp.(b)		57,061		3,607,396
Vertex Pharmaceuticals Inc.(b)		42,420		1,485,973
				31,111,809
Drug Retail–5.63%
CVS Caremark Corp.		208,709		7,256,812
Drogasil S.A. (Brazil)		148,860		1,209,661
				8,466,473
Health Care Distributors–1.96%
McKesson Corp.		41,892		2,948,359
Health Care Equipment–9.14%
Baxter International Inc.		69,269		3,506,397
CareFusion Corp.(b)		61,075		1,569,628
Covidien PLC (Ireland)		73,440		3,353,270
Hologic, Inc.(b)		104,356		1,963,980
Wright Medical Group, Inc.(b)		67,893		1,054,378
Zimmer Holdings, Inc.(b)		43,003		2,308,401
				13,756,054
Health Care Facilities–3.77%
Assisted Living Concepts Inc.–Class A(b)		31,460		1,023,394
Rhoen-Klinikum AG (Germany)		133,140		2,932,014
Universal Health Services, Inc.–Class B		39,598		1,719,345
				5,674,753
Health Care Services–8.28%
DaVita, Inc.(b)		51,863		3,603,960
Express Scripts, Inc.(b)		75,836		4,098,936
Medco Health Solutions, Inc.(b)		39,089		2,394,983
Quest Diagnostics Inc.		43,855		2,366,854
				12,464,733
Health Care Supplies–0.97%
Alcon, Inc.		8,960		1,464,064
Health Care Technology–1.99%
Allscripts Healthcare Solutions, Inc.(b)		62,810		1,210,349
Cerner Corp.(b)		18,848		1,785,659
				2,996,008
Life Sciences Tools & Services–9.70%
Gerresheimer AG (Germany)(b)		39,045		1,722,311
Life Technologies Corp.(b)		76,098		4,223,439
Pharmaceutical Product Development, Inc.		78,722		2,136,515
Thermo Fisher Scientific, Inc.(b)		117,612		6,511,001
				14,593,266
Managed Health Care–12.48%
Aetna, Inc.		125,839		3,839,348
AMERIGROUP Corp.(b)		37,537		1,648,625
Amil Participacoes S.A. (Brazil)(d)		142,900		1,531,102
Aveta, Inc.(d)		122,652		735,912
Centene Corp.(b)		33,226		841,947
CIGNA Corp.		40,036		1,467,720
Health Net, Inc.(b)		89,937		2,454,380
UnitedHealth Group Inc.		63,271		2,284,716
WellPoint Inc.(b)		69,819		3,969,908
				18,773,658
Pharmaceuticals–21.89%
Abbott Laboratories		105,877		5,072,567
Allergan, Inc.		21,547		1,479,632
Bayer AG (Germany)		22,993		1,700,140
EastPharma Ltd.–GDR (Turkey)(b)(d)		114,132		97,012
Hikma Pharmaceuticals PLC (United Kingdom)		119,052		1,506,934
Hospira, Inc.(b)		44,422		2,473,861
Ipsen S.A. (France)		32,981		1,008,418
Johnson & Johnson		65,483		4,050,124
Nippon Shinyaku Co., Ltd. (Japan)		115,000		1,645,082
Novartis AG–ADR (Switzerland)(c)		52,410		3,089,570
Pharmstandard–GDR (Russia)(b)(d)		23,450		668,325
Roche Holding AG (Switzerland)		41,608		6,103,754
Shire PLC–ADR (United Kingdom)		32,179		2,329,116
Teva Pharmaceutical Industries Ltd.–ADR (Israel)		33,100		1,725,503
				32,950,038
Total Common Stocks & Other Equity Interests (Cost $132,497,381)				145,199,215

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Global Health Care Fund

	Shares		Value
Money Market Funds–3.11%
Liquid Assets Portfolio–Institutional Class(e)		2,343,226	$	2,343,226
Premier Portfolio–Institutional Class(e)		2,343,226		2,343,226
Total Money Market Funds (Cost $4,686,452)				4,686,452
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–99.59% (Cost $137,183,833)				149,885,667
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–1.57%
Liquid Assets Portfolio–Institutional Class (Cost $2,366,265)(e)(f)		2,366,265		2,366,265
TOTAL INVESTMENTS–101.16% (Cost $139,550,098)				152,251,932
OTHER ASSETS LESS LIABILITIES–(1.16)%				(1,747,478	)
NET ASSETS–100.00%			$	150,504,454

Investment Abbreviations:

ADR	– American Depositary Receipt
GDR	– Global Depositary Receipt

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	All or a portion of this security was out on loan at December 31, 2010.
(d)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2010 was $3,032,351, which represented 2.01% of the Fund’s Net Assets.
(e)	The money market fund and the Fund are affiliated by having the same investment adviser.
(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.

Invesco V.I. Global Health Care Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $132,497,381)*	$	145,199,215
Investments in affiliated money market funds, at value and cost		7,052,717
Total investments, at value (Cost $139,550,098)		152,251,932
Receivable for:
Fund shares sold		830,878
Dividends		93,094
Foreign currency contracts outstanding		22,680
Investment for trustee deferred compensation and retirement plans		18,175
Total assets		153,216,759
Liabilities:
Payable for:
Fund shares reacquired		46,712
Collateral upon return of securities loaned		2,366,265
Accrued fees to affiliates		207,995
Accrued other operating expenses		46,437
Trustee deferred compensation and retirement plans		44,896
��
Total liabilities		2,712,305
Net assets applicable to shares outstanding	$	150,504,454
Net assets consist of:
Shares of beneficial interest	$	159,659,787
Undistributed net investment income (loss)		(41,772	)
Undistributed net realized gain (loss)		(21,844,874	)
Unrealized appreciation		12,731,313
	$	150,504,454
Net Assets:
Series I	$	124,441,248
Series II	$	26,063,206
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		7,447,915
Series II		1,591,262
Series I:
Net asset value per share	$	16.71
Series II:
Net asset value per share	$	16.38

*  At December 31, 2010, securities with an aggregate value of $2,316,735 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $89,745)	$	1,443,819
Dividends from affiliated money market funds (includes securities lending income of $11,705)		20,511
Total investment income		1,464,330
Expenses:
Advisory fees		1,176,576
Administrative services fees		436,324
Custodian fees		20,830
Distribution fees — Series II		66,270
Transfer agent fees		45,763
Trustees’ and officers’ fees and benefits		20,414
Other		62,822
Total expenses		1,828,999
Less: Fees waived		(11,733	)
Net expenses		1,817,266
Net investment income (loss)		(352,936	)
Realized and unrealized gain (loss) from:
Net realized gain from:
Investment securities		6,396,960
Foreign currencies		15,773
Foreign currency contracts		222,937
		6,635,670
Change in net unrealized appreciation (depreciation) of:
Investment securities		859,519
Foreign currencies		970
Foreign currency contracts		(188,257	)
		672,232
Net realized and unrealized gain		7,307,902
Net increase in net assets resulting from operations	$	6,954,966

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Global Health Care Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income (loss)	$	(352,936	)	$	(131,082	)
Net realized gain (loss)		6,635,670			(14,305,912	)
Change in net unrealized appreciation		672,232			50,968,906
Net increase in net assets resulting from operations		6,954,966			36,531,912
Distributions to shareholders from net investment income:
Series I		—			(447,208	)
Series II		—			(30,590	)
Total distributions from net investment income		—			(477,798	)
Share transactions–net:
Series I		(24,973,014	)		(15,173,536	)
Series II		(1,847,042	)		1,039,283
Net increase (decrease) in net assets resulting from share transactions		(26,820,056	)		(14,134,253	)
Net increase (decrease) in net assets		(19,865,090	)		21,919,861
Net assets:
Beginning of year		170,369,544			148,449,683
End of year (includes undistributed net investment income (loss) of $(41,772) and $(39,364), respectively)	$	150,504,454		$	170,369,544

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Global Health Care Fund, (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as

Invesco V.I. Global Health Care Fund

	institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the

Invesco V.I. Global Health Care Fund

	financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Other Risks — The Fund may invest a large percentage of assets in securities of a limited number of companies, such that each investment may have a greater effect on the Fund’s overall performance, and any change in the value of those securities could significantly affect the value of your investment in the Fund.
	The Fund has invested in non-publicly traded companies, some of which are in the startup or development stages. These investments are inherently risky, as the market for the technologies or products these companies are developing are typically in the early stages and may never materialize. The Fund could lose its entire investment in these companies. These investments are valued at fair value as determined in good faith in accordance with procedures approved by the Board of Trustees. Investments in privately held venture capital securities are illiquid.
J.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
K.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
L.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

Invesco V.I. Global Health Care Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.75%
Next $250 million		0	.74%
Next $500 million		0	.73%
Next $1.5 billion		0	.72%
Next $2.5 billion		0	.71%
Next $2.5 billion		0	.70%
Next $2.5 billion		0	.69%
Over $10 billion		0	.68%

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, 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 Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $11,733.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $386,324 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs

Invesco V.I. Global Health Care Fund

(Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	150,507,602	$	1,744,330	$	—	$	152,251,932
Foreign Currency Contracts*		—		22,680		—		22,680
Total Investments	$	150,507,602	$	1,767,010	$	—	$	152,274,612

*  Unrealized appreciation.

NOTE 4—Derivative Investments

The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Value of Derivative Instruments at Period-End

The Table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2010:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Currency risk
Foreign currency contracts(a)	$	118,224	$	(95,544	)

^(a) Values are disclosed on the Statement of Assets and Liabilities under the Foreign currency contracts.

Effect of Derivative Instruments for the year ended December 31, 2010

  The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on
	Statement of Operations
	Foreign Currency
	Contracts*
Realized Gain
Currency risk	$	222,937
Change in Unrealized Appreciation (Depreciation)
Currency risk		(188,257	)
Total	$	34,680

*  The average value of foreign currency contracts outstanding during the period was $5,995,777.

Invesco V.I. Global Health Care Fund

Open Foreign Currency Contracts at Period End
									Unrealized
Settlement			Contract to						Appreciation
Date	Counterparty		Deliver		Receive		Value		(Depreciation)
02/10/11		CitiBank Capital	CHF	2,700,000	USD	2,797,029	$	2,892,573	$	(95,544	)
02/10/11		CitiBank Capital	EUR	2,300,000	USD	3,193,205		3,074,981		118,224
Total foreign currency contracts									$	22,680

Currency Abbreviations:
CHF	– Swiss Fran
EUR	– Euro
USD	– U.S. Dollar

NOTE 5—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $352,186.

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $2,859 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 7—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	—	$	477,798

Tax Components of Net Assets at Period-End:

	2010
Net unrealized appreciation — investments	$	12,676,656
Net unrealized appreciation — other investments		6,799
Temporary book/tax differences		(41,772	)
Capital loss carryforward		(21,797,016	)
Shares of beneficial interest		159,659,787
Total net assets	$	150,504,454

  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 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.

Invesco V.I. Global Health Care 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 utilized $6,395,734 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	5,840,082
December 31, 2017		15,956,934
Total capital loss carryforward	$	21,797,016

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $23,943,429 and $46,773,502, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	22,042,224
Aggregate unrealized (depreciation) of investment securities		(9,365,568	)
Net unrealized appreciation of investment securities	$	12,676,656
Cost of investments for tax purposes is $139,575,276.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions and net operating losses, on December 31, 2010, undistributed net investment income (loss) was increased by $350,528, undistributed net realized gain (loss) was decreased by $15,773 and shares of beneficial interest decreased by $334,755. This reclassification had no effect on the net assets of the Fund.

NOTE 11—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		1,324,865		$	21,365,905			1,972,429		$	27,454,826
Series II		218,080			3,429,179			341,255			4,410,301
Issued as reinvestment of dividends:
Series I		—			—			28,759			447,208
Series II		—			—			2,002			30,590
Reacquired:
Series I		(2,928,835	)		(46,338,919	)		(3,260,825	)		(43,075,570	)
Series II		(340,143	)		(5,276,221	)		(252,057	)		(3,401,608	)
Net increase (decrease) in share activity		(1,726,033	)	$	(26,820,056	)		(1,168,437	)	$	(14,134,253	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 59% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Global Health Care Fund

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																												Ratio of			Ratio of
						Net gains																						expenses			expenses
						(losses)																						to average			to average net			Ratio of net
	Net asset		Net			on securities						Dividends			Distributions													net assets			assets without			investment
	value,		investment			(both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income			realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)(a)			unrealized)			operations			income			gains			Distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	15.87	$	(0.03	)	$	0.87		$	0.84		$	—		$	—		$	—		$	16.71		5.29	%	$	124,441		1.11	%(d)		1.12	%(d)		(0.18	)%(d)		16	%
Year ended 12/31/09		12.47		(0.01	)		3.46			3.45			(0.05	)		—			(0.05	)		15.87		27.67			143,648		1.13			1.14			(0.05	)		45
Year ended 12/31/08		24.06		0.07	(e)		(7.16	)		(7.09	)		—			(4.50	)		(4.50	)		12.47		(28.62	)		128,563		1.12			1.13			0.34	(e)		67
Year ended 12/31/07		21.51		(0.01	)		2.56			2.55			—			—			—			24.06		11.85			223,448		1.06			1.07			(0.06	)		66
Year ended 12/31/06		20.44		(0.04	)		1.11			1.07			—			—			—			21.51		5.24			235,509		1.10			1.10			(0.19	)		79
Series II
Year ended 12/31/10		15.60		(0.07	)		0.85			0.78			—			—			—			16.38		5.00			26,063		1.36	(d)		1.37	(d)		(0.43	)(d)		16
Year ended 12/31/09		12.26		(0.04	)		3.40			3.36			(0.02	)		—			(0.02	)		15.60		27.39			26,722		1.38			1.39			(0.30	)		45
Year ended 12/31/08		23.82		0.02	(e)		(7.08	)		(7.06	)		—			(4.50	)		(4.50	)		12.26		(28.78	)		19,886		1.37			1.38			0.09	(e)		67
Year ended 12/31/07		21.36		(0.07	)		2.53			2.46			—			—			—			23.82		11.52			20,817		1.31			1.32			(0.31	)		66
Year ended 12/31/06		20.34		(0.09	)		1.11			1.02			—			—			—			21.36		5.01			97,646		1.35			1.35			(0.44	)		79

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $130,369 and $26,508 for Series I and Series II shares, respectively.
(e)	Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets include a special cash dividend received of $5.23 per share owned of All-scripts-Misys Healthcare Solutions, Inc. on October 13, 2008. Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets excluding the special dividend are $0.02 and 0.08% and $(0.03) and (0.17)% for Series I and Series II shares, respectively.

Invesco V.I. Global Health Care Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Global Healthcare Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Global Healthcare Fund (formerly known as AIM V.I. Global Healthcare Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Global Health Care Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
			ACTUAL				(5% annual return before expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,139.10	$	6.04	$	1,019.56	$	5.70		1.12	%
Series II		1,000.00		1,137.50		7.38		1,018.30		6.97		1.37

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Global Health Care Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Global Multi-Asset Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VIGMA-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2010, Series I shares of Invesco V.I. Global Multi-Asset Fund, excluding variable product issuer charges, returned 11.80%, outperforming the Fund’s custom style-specific benchmark, which returned 10.20% over the same period. Tactical shifts in favor of equities and third and fourth quarter recoveries in both equity and fixed income markets helped facilitate the outperformance for the reporting period.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	11.80	%
Series II Shares	11.46
MSCI World Index▼ (Broad Market Index)	11.76
Custom V.I. Global Multi-Asset Fund Index§ (Style-Specific Index)	10.20
Lipper VUF Global Flexible Portfolio Funds Category Average▼ (Peer Group)	9.45
Lipper VUF Global Core Funds Index▼ (Former Peer Group Index)*	13.12

^▼Lipper Inc.;^§Invesco, Lipper Inc.

*During the reporting period, the Fund has elected to use the Lipper VUF Global Flexible Portfolio Funds Category Average as its peer group rather than the Lipper VUF Global Core Funds Index because we believe it more closely reflects the performance of the securities in which the Fund invests. Because this is the first reporting period since we adopted the new index, SEC guidelines require that we compare performance to both the old and new indexes.

How we invest

Invesco Global Asset Allocation’s (IGAA) investment process is a quantitative, actively managed three-step investment strategy designed to generate a unique source of excess returns from a macro based, multi-asset investment discipline. This process is implemented through the use of exchange-traded funds (ETFs) that may utilize derivative investments, namely swaps, options, warrants, futures and forward currency contracts.

Step One – Fundamental Research

Fundamental research is used to identify the key drivers of relative performance for asset class, country and other investment decision models. This research includes the following:

n An analysis of markets to determine the distinctive characteristics of each market relative to its comparison universe.

n	The generation of hypotheses about how various economic events will interact with these characteristics and affect relative performance.
n	Confirmation or revision of hypothesis through empirical research.

Step Two – Quantitative Modeling

Fundamental research from step one is used to create quantitative models focusing on valuation and dynamics.

n	To address valuation, IGAA determines if competing investment alternatives are cheap or expensive relative to their underlying fundamentals. Valuation focuses on the longer term, secular influences on each asset and suggests that there is a mean reverting, long-term or equilibrium relationship between prices and fundamentals.
n	Shorter-term factors, which are largely proxies for the economic environment and investor positioning, reconcile the

short-run behavior of asset prices with their long-run behavior and recognizes that these misvaluations may not correct instantaneously.

     The output of the modeling is expressed in the form of probabilities that one asset will outperform another, resulting in a quantitative expression of IGAA’s fundamental investment process in a mathematical-based approach.

Step Three – Portfolio Strategy

IGAA directly maps the probabilities to express the relative attractiveness of any investment decision within the Fund’s specified allocation ranges. Ranges around target allocations for each decision are determined through IGAA’s proprietary allocation budgeting process that is based on the number of available decisions, the amount of expected aggregate portfolio outperformance and the risk characteristics of each available decision. Generally speaking, riskier asset decisions will have smaller ranges, while less risky, low correlation asset decisions will tend to have larger ranges.

Market conditions and your Fund

The first quarter of 2010 was characterized by a healthy recovery in global equities from the 2008-2009 financial crises. Hopes for a relatively rapid, sustained recovery were fueled by record amounts of monetary and fiscal stimulus and an exceptionally low interest rate policy. Not surprising, cyclical assets, such as equities, enjoyed significant price advances during that period driven by anticipation that improving economic conditions would boost earnings growth.

     At the onset of the second quarter of 2010, Chinese officials began to tighten monetary policy in response to fears about inflation, creating concerns about the pace of growth for the Chinese economy and its impact on demand for commodities. Furthermore, concerns

Portfolio Composition

% of Total Net Assets as of December 31, 2010

Investment Grade Fixed Income	22.57	%
Domestic Equity Large Cap	11.86
Emerging Markets Fixed Income	9.63
Foreign Equity Small-Mid Cap	9.05
Japanese Equity	9.34
European Equity	8.37
Asia ex-Japan Equity	7.45
Domestic Equity Small-Mid Cap	8.32
High Yield Fixed Income	5.87
Emerging Markets Equity	6.38
Money Market Funds Plus
Other Assets Less Liabilities	1.16

Total Net Assets $67.2 million

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

Invesco V.I. Global Multi-Asset Fund

about a double-dip recession in the U.S. and fiscal concerns in the peripheral economies of Europe, such as Greece, Ireland, Portugal and Spain, ignited fears of a renewed global economic slowdown. These developments led to a flight to safety approach among global investors driving government bond yields of the world’s largest industrial countries to multi-decade lows.

     During the first half of the reporting period, the strategy remained defensive in the wake of heightened financial market volatility and economic uncertainty. This was reflected in an overweight in government bonds and an underweight in global equities.

     The third quarter witnessed the rare event of increases in virtually all asset prices. Two events and related policy responses drove returns: the peripheral European debt crisis and the marked slowdown in the U.S. In the case of Europe, the creation of a facility to support the troubled economies removed the worst of the uncertainty. Riskier assets such as equities rose in response. In the U.S., the Federal Reserve set expectations for a second round of quantitative easing. Government bonds benefited from both the economic events and the U.S. policy response, resulting in yields across the curve hovering at or near multi-decade lows. The policy response also proved to be a boon for equities which rebounded strongly in the second half of the quarter. Commodities also had a very eventful quarter, with all of the major complexes posting positive returns. A tactical overweight in equities and an underweight in long-term government fixed income securities helped boost the Fund’s performance.

     Global equity markets resumed their advance in the fourth quarter. Equities were supported by very loose monetary conditions and the belief that the world’s seven largest industrial (G7) economies had recovered from the soft patch that we had seen during the summer months. For the emerging markets, the economic landscape was even brighter, with rising asset values, strengthening business activity and even a hint of inflationary pressures. The recent rise in government bond yields has taken valuation much closer to our estimate for fair value. The various commodity complexes all enjoyed price advances during the quarter, propelled by tightening supply-demand balances and good economic prospects among the commodity-intensive emerging markets.

     The Fund’s active position favoring equities, particularly the European and emerging markets sleeves, helped reap benefits from the equity rally at the end the reporting period. As a result, performance was favorable on an absolute and relative basis, excluding variable product issuer charges.

     Finally, we thank you for your continued commitment to Invesco V.I. Global Multi-Asset Fund.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Mark Ahnrud
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Global Multi-Asset Fund. Mr. Ahnrud joined Invesco in 2000. He began his investment career in 1985. Mr. Ahnrud earned a B.S. in finance and investments from Babson College and an M.B.A. from the Fuqua School of Business at Duke University.

Chris Devine
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Global Multi-Asset Fund. Mr. Devine joined Invesco in 2003. He began his investment career in 1996. Mr. Devine earned a B.A. in economics from Wake Forest University and an M.B.A. from the University of Georgia.

Scott Hixon
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Global Multi-Asset Fund. Mr. Hixon joined Invesco in 1997. He began his investment career in 1992. Mr. Hixon earned a B.B.A. in finance from Georgia Southern University and an M.B.A. in finance from Georgia State University.

Christian Ulrich
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Global Multi-Asset Fund. Mr. Ulrich joined Invesco in 2000. He began his investment career in 1987. Mr. Ulrich graduated from the KV Zurich Business School in Zurich, Switzerland.

Scott Wolle
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Global Multi-Asset Fund. Mr. Wolle joined Invesco in 1999. He began his investment career in 1991. Mr. Wolle earned a B.S. in finance from Virginia Polytechnic Institute and State University and an M.B.A. from the Fuqua School of Business at Duke University.

Invesco V.I. Global Multi-Asset Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Classes since Inception

Fund data from 10/24/08, Index data from 10/31/08

Past performance cannot guarantee comparable future results.

     During the reporting period, the Fund has elected to use the Lipper VUF Global Flexible Portfolio Funds Category Average as its peer group rather than the Lipper VUF Global Core Funds Index because we believe it more closely reflects the performance of the securities in which the Fund invests. Because this is the first reporting period since we adopted the new index, SEC guidelines require that we compare performance to both the old and new indexes.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (10/24/08)		23.31	%
	1 Year	11.80
Series II Shares
Inception (10/24/08)		22.92	%
	1 Year	11.46

The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II

shares was 0.74% and 0.99%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 2.37% and 2.62%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Global Multi-Asset Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As

mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower.

1	Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2012. See current prospectus for more information.
2	The expense ratio includes acquired fund fees and expenses of the underlying funds in which the Fund invests of 0.64%.

Invesco V.I. Global Multi-Asset Fund

Invesco V.I. Global Multi-Asset Fund’s investment objective is to provide total return consistent with a moderate level of risk relative to the broad stock market.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

The Fund’s performance depends on the underlying funds in which it invests, and it is subject to the risks of the underlying funds. Market fluctuations may change the target weightings in the underlying funds. The underlying funds may change their investment objectives, policies or practices and may not achieve their investment objectives, all of which may cause the Fund to withdraw its investments therein at a disadvantageous time.

     An investment by the Fund in underlying exchange-traded funds (ETFs) generally presents the same primary risks as an investment in a mutual fund. In addition, underlying ETFs may be subject to the following: (1) a discount of the underlying ETF shares price to its net asset value; (2) failure to develop an active trading market for the underlying ETF shares; (3) the listing exchange halting trading of the ETF shares; (4) failure of the ETF shares to track the referenced index; and (5) holding troubled securities in the referenced index. ETFs may involve duplication of management fees and certain other expenses, as the Fund indirectly bears its proportionate share of any expenses paid by the ETFs in which it invests. Further, certain of the ETFs in which the Fund may invest are leveraged. The more a Fund invests in such leveraged ETFs, the more this leverage will magnify any losses on those investments.

     The Fund is non-diversified and can invest a greater portion of its assets in a single issuer. A change in the value of the issuer could affect the value of the Fund more than if it were diversified fund.

     The Fund may invest in commodity-linked derivative instruments, exchange-traded notes (ETNs) and exchange traded funds that may subject it to greater volatility. The Fund’s concentration of its assets in a particular sector of the commodities markets may make it more susceptible to risks associated with those sectors. ETNs may pose risks associated with leverage, may be relatively illiquid, and may not be able to track the applicable market benchmark or strategy accurately.

     The prices of and the income generated by the Fund, the underlying ETFs, and any other underlying funds may decline in response to, among other

things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

     The issuer of instruments in which the Fund invests may be unable to meet interest and/or principal payments, thereby causing its instruments to decrease in value and lowering the issuer’s credit rating.

     An underlying fund’s foreign investments will be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     Derivatives may be more difficult to purchase, sell or value than other investments and may be subject to market, interest rate, credit, leverage, counterparty and management risks. An underlying fund investing in a derivative could lose more than the cash amount invested or incur higher taxes. Over-the-counter derivatives are also subject to counterparty risk, which is the risk that the other party to the contract will not fulfill its contractual obligation to complete the transaction with the Fund.

     Interest rate risk refers to the risk that bond prices generally fall as interest rates rise; conversely, bond prices generally rise as interest rates fall. Specific bonds differ in their sensitivity to changes in interest rates depending on their individual characteristics, including duration.

     Leverage created from borrowing or certain types of transactions or instruments, including derivatives, may impair an underlying fund’s liquidity, cause it to liquidate positions at an unfavorable time, increase volatility or otherwise not achieve its intended objective.

     An underlying fund may invest in obligations issued by U.S. government agencies and instrumentalities that may receive varying levels of support from the government, which could affect the Fund’s ability to recover should they default.

     Certain of the underlying funds may invest in mortgage and asset-backed securities that are subject to prepayment or call risk, which is the risk that the borrower’s payments may be received

earlier or later than expected due to changes in prepayment rates on underlying loans. Securities may be prepaid at a price less than the original purchase value.

     Reinvestment risk is the risk that a bond’s cash flows (coupon income and principal repayment) will be reinvested at an interest rate below that on the original bond.

     The investment techniques and risk analysis used by the Fund’s or the underlying fund’s portfolio managers may not produce the desired results.

     Junk bonds involve a greater risk of default or price changes due to changes in the credit quality of the issuer. The values of junk bonds fluctuate more than those of high-quality bonds in response to company, political, regulatory or economic developments. Values of junk bonds can decline significantly over short periods of time.

     Securities issued by foreign companies and governments located in developing countries may be affected more negatively by inflation, devaluation of their currencies, higher transaction costs, delays in settlement, adverse political developments and lack of timely information than those in developed countries.

     Certain underlying funds may hold illiquid securities that it is unable to sell at the preferred time or price and could lose its entire investment in such securities.

     An issuer’s ability to prepay principal on a loan or debt security prior to maturity can limit an underlying fund’s potential gains. Prepayments may require an underlying fund to replace the loan or debt security with a lower yielding security, adversely affecting an underlying fund’s yield.

Invesco V.I. Global Multi-Asset Fund

About indexes used in this report

The MSCI World Index^SM is an unmanaged index considered representative of stocks of developed countries.

     The Custom V.I. Global Multi-Asset Fund Index, created by Invesco to serve as a benchmark for Invesco V.I. Global Multi-Asset Fund, is composed of the following indexes: MSCI World Index (54%) and Barclays Capital U.S. Universal Index (46%).

     The Barclays Capital U.S. Universal Index is an unmanaged index considered representative of the union of the U.S. Aggregate Index, the U.S. High-Yield Corporate Index, the 144A Index, the Eurodollar Index, the Emerging Markets Index and the non-ERISA portion of the CMBS Index.

     The Lipper VUF Global Core Funds Index is an unmanaged index considered representative of global core variable insurance underlying funds tracked by Lipper.

     The Lipper VUF Global Flexible Portfolio Funds Category Average is an average of all the variable insurance underlying funds tracked by the Lipper Global Flexible Portfolio Funds category.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Global Multi-Asset Fund

Schedule of Investments

December 31, 2010

Schedule of Investments in Affiliated Issuers–99.70%^(a)

											Change in
	% of										Unrealized
	Net			Value		Purchases		Proceeds			Appreciation			Realized			Dividend		Shares		Value
	Assets			12/31/09		at Cost		from Sales			(Depreciation)			Gain (Loss)			Income		12/31/10		12/31/10
Domestic Equity ETFs–29.23%
iShares MSCI EAFE Small Cap Index Fund(b)		9.05	%	$	—	$	8,069,418	$	(2,366,648	)	$	627,581		$	(248,523	)	$	155,658		144,085	$	6,081,828
PowerShares FTSE RAFI US 1000 Portfolio		11.86	%		5,362,923		5,730,477		(3,999,066	)		1,008,479			(132,456	)		93,809		142,455		7,970,357
PowerShares FTSE RAFI US 1500 Small-Mid Portfolio		8.32	%		3,507,833		3,891,499		(2,857,456	)		774,965			274,241			34,379		86,670		5,591,082
Total Domestic Equity ETFs					8,870,756		17,691,394		(9,223,170	)		2,411,025			(106,738	)		283,846		373,210		19,643,267
Fixed-Income ETFs–38.07%
iShares Barclays 20+ Year Treasury Bond Fund(b)		22.57	%		—		30,762,363		(16,031,013	)		126,317			304,124			392,774		161,090		15,161,791
PowerShares 1-30 Laddered Treasury Portfolio		—	%		10,598,640		3,867,178		(14,559,010	)		340,565			(247,373	)		166,375		—		—
PowerShares Emerging Markets Sovereign Debt Portfolio		9.63	%		4,617,101		4,272,268		(2,629,656	)		240,227			(28,198	)		359,331		242,660		6,471,742
PowerShares Fundamental High Yield Corporate Bond Portfolio		5.87	%		3,273,858		2,139,561		(1,463,368	)		33,680			(42,686	)		283,950		216,660		3,941,045
Total Fixed-Income ETFs					18,489,599		41,041,370		(34,683,047	)		740,789			(14,133	)		1,202,430		620,410		25,574,578
Foreign Equity ETFs–31.54%
iShares MSCI Japan Index Fund(b)		9.34	%		3,690,486		4,737,421		(2,658,633	)		642,066			(135,417	)		65,796		575,245		6,275,923
iShares MSCI Pacific ex-Japan Index Fund(b)		7.45	%		—		7,044,159		(2,328,003	)		494,162			(207,183	)		147,345		106,495		5,003,135
PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio		—	%		3,590,795		1,149,328		(4,838,534	)		(605,007	)		703,418			12,566		—		—
PowerShares FTSE RAFI Developed Markets ex-US Small-Mid Portfolio		—	%		4,108,289		1,488,183		(5,797,381	)		(457,065	)		657,974			4,562		—		—
PowerShares FTSE RAFI Emerging Markets Portfolio		6.38	%		3,262,704		3,001,988		(2,265,240	)		406,226			(118,722	)		41,554		166,290		4,286,956
PowerShares FTSE RAFI Europe Portfolio		—	%		3,618,122		2,089,801		(5,406,507	)		(508,290	)		206,874			1,709		—		—
Vanguard European ETF(b)		8.37	%		—		7,160,149		(1,655,734	)		250,234			(133,598	)		248,402		114,505		5,621,051
Total Foreign Equity ETFs					18,270,396		26,671,029		(24,950,032	)		222,326			973,346			521,934		962,535		21,187,065
Money Market Fund–0.86%
Liquid Assets Portfolio–Institutional Class		0.43	%		1,183,493		14,140,278		(15,034,564	)		—			—			734		289,207		289,207
Premier Portfolio–Institutional Class		0.43	%		1,183,493		14,140,278		(15,034,564	)		—			—			343		289,207		289,207
Total Money Market Funds					2,366,986		28,280,556		(30,069,128	)		—			—			1,077		578,414		578,414
TOTAL INVESTMENTS IN AFFILIATED MUTUAL FUNDS (Cost $59,942,837)		99.70	%	$	47,997,737	$	113,684,349	$	(98,925,377	)	$	3,374,140		$	852,475		$	2,009,287			$	66,983,324
OTHER ASSETS LESS LIABILITIES		0.30	%																			200,921
NET ASSETS		100.00	%																		$	67,184,245

Investment Abbreviations:

ETF – Exchange-Traded Fund

Notes to Schedule of Investments:

(a)	Unless otherwise indicated, each exchange-traded fund or mutual fund and the Fund are affiliated by either having the same investment adviser or an investment adviser under common control with the Fund’s investment adviser.
(b)	Non-affiliate of the Fund or its investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Global Multi-Asset Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments — non affiliates at value (Cost $35,969,000)	$	38,143,727
Investments — affiliates, at value (Cost $23,973,837)		28,839,597
Total investments, at value (Cost $59,942,837)		66,983,324
Cash		949,044
Receivable for:
Fund shares sold		40,343
Dividends from affiliates		51,701
Investment for trustee deferred compensation and retirement plans		4,871
Total assets		68,029,283
Liabilities:
Payable for:
Investments purchased — non affiliates		350,140
Investments purchased — affiliates		334,249
Fund shares reacquired		736
Accrued fees to affiliates		126,975
Accrued other operating expenses		27,516
Trustee deferred compensation and retirement plans		5,422
Total liabilities		845,038
Net assets applicable to shares outstanding	$	67,184,245
Net assets consist of:
Shares of beneficial interest	$	57,685,808
Undistributed net investment income		1,797,587
Undistributed net realized gain		660,363
Unrealized appreciation		7,040,487
	$	67,184,245
Net Assets:
Series I	$	1,822,089
Series II	$	65,362,156
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		119,511
Series II		4,307,980
Series I:
Net asset value per share	$	15.25
Series II:
Net asset value per share	$	15.17

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends — non affiliates	$	1,009,976
Dividends — affiliates		999,311
Total investment income		2,009,287
Expenses:
Advisory fees		378,815
Administrative services fees		192,391
��
Custodian fees		7,840
Distribution fees — Series II		138,368
Transfer agent fees		3,288
Trustees’ and officers’ fees and benefits		17,351
Other		42,320
Total expenses		780,373
Less: Fees waived and expenses reimbursed		(572,568	)
Net expenses		207,805
Net investment income		1,801,482
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities — non affiliates		(420,597	)
Investment securities — affiliates		1,273,072
		852,475
Change in net unrealized appreciation of:
Investment securities — non affiliates		2,140,360
Investment securities — affiliates		1,233,780
		3,374,140
Net realized and unrealized gain		4,226,615
Net increase in net assets resulting from operations	$	6,028,097

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Global Multi-Asset Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	1,801,482		$	656,894
Net realized gain (loss)		852,475			(107,864	)
Change in net unrealized appreciation		3,374,140			3,623,261
Net increase in net assets resulting from operations		6,028,097			4,172,291
Distributions to shareholders from net investment income:
Series I		(6,186	)		(10,312	)
Series II		(208,969	)		(452,703	)
Total distributions from net investment income		(215,155	)		(463,015	)
Distributions to shareholders from net realized gains:
Series I		—			(1,782	)
Series II		—			(84,532	)
Total distributions from net realized gains		—			(86,314	)
Share transactions–net:
Series I		765,046			690,765
Series II		13,745,662			42,009,701
Net increase in net assets resulting from share transactions		14,510,708			42,700,466
Net increase in net assets		20,323,650			46,323,428
Net assets:
Beginning of year		46,860,595			537,167
End of year (includes undistributed net investment income of $1,797,587 and $211,260, respectively)	$	67,184,245		$	46,860,595

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Global Multi-Asset Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is to provide total return consistent with a moderate level of risk relative to the broad stock market. The Fund primarily invests in exchange-traded funds (“underlying funds”) advised by Invesco PowerShares Capital Management LLC (“Invesco PowerShares”). The Fund may also invest in affiliated mutual funds advised by Invesco Advisers, Inc. (the Adviser or Invesco); in unaffiliated mutual funds and exchange-traded funds and in other securities. Invesco and Invesco PowerShares (collectively the “Advisers”) are affiliates of each other as they are indirect wholly owned subsidiaries of Invesco Ltd. (“Invesco”). Invesco may change the Fund’s asset class allocations, the underlying funds or the target weightings in the underlying funds without shareholder approval. The underlying funds may engage in a number of investment techniques and practices, which involve certain risks. Each underlying fund’s accounting policies are outlined in the underlying fund’s financial statements and the affiliated underlying funds are available upon request.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate,

Invesco V.I. Global Multi-Asset Fund

	maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Distributions from income from underlying funds, if any, are recorded as dividend income on ex-dividend date. Distributions from net realized capital gains from underlying funds, if any, are recorded as realized gains on the ex-dividend date. Interest income is recorded on the accrual basis from settlement date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
D.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.

Invesco V.I. Global Multi-Asset Fund

	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
E.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
F.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
G.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.67%
Next $250 million		0	.655%
Next $500 million		0	.64%
Next $1.5 billion		0	.625%
Next $2.5 billion		0	.61%
Next $2.5 billion		0	.595%
Next $2.5 billion		0	.58%
Over $10 billion		0	.565%

  Under the terms of master intergroup sub-advisory contracts between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective April 30, 2010, the Adviser has contractually agreed, through at least April 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and /or expense reimbursement (excluding certain items discussed below) of Series I shares to 0.10% and Series II shares to 0.35% of average daily net assets. Prior to April 30, 2010, the Adviser had contractually agreed to limit total amount fund operating expense of Series I to 0.18% and Series II shares to 0.43% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Funds have incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $378,815 and reimbursed Fund expenses of $193,753.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $142,391 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

Invesco V.I. Global Multi-Asset Fund

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	66,983,324	$	—	$	—	$	66,983,324

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $2,607 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	215,155	$	549,329

Invesco V.I. Global Multi-Asset Fund

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	1,820,342
Undistributed long-term gain		1,179,944
Net unrealized appreciation — investments		6,503,134
Temporary book/tax differences		(4,983	)
Shares of beneficial interest		57,685,808
Total net assets	$	67,184,245

  The difference between book-basis and tax-basis unrealized appreciation 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 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.

  The Fund does not have a capital loss carryforward at period-end.

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $85,403,793 and $68,856,249, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	6,503,134
Aggregate unrealized (depreciation) of investment securities		—
Net unrealized appreciation of investment securities	$	6,503,134
Cost of investments for tax purposes is $60,480,190.

NOTE 8—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		79,955		$	1,122,636			56,401		$	738,272
Series II		1,992,979			28,209,893			3,459,519			43,759,281
Issued as reinvestment of dividends:
Series I		425			6,186			880			12,094
Series II		14,431			208,969			39,214			537,235
Reacquired:
Series I		(26,493	)		(363,776	)		(4,381	)		(59,601	)
Series II		(1,065,700	)		(14,673,200	)		(168,256	)		(2,286,815	)
Net increase in share activity		995,597		$	14,510,708			3,383,377		$	42,700,466

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 93% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Global Multi-Asset Fund

NOTE 9—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																										Ratio of			Ratio of
																										expenses			expenses
					Net gains																					to average			to average net			Ratio of net
	Net asset				on securities					Dividends			Distributions													net assets			assets without			investment
	value,		Net		(both		Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and		investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)		operations		��	income			gains			Distributions			of period		return(b)			(000s omitted)		absorbed(c)			absorbed			net assets			turnover(d)
Series I
Year ended 12/31/10	$	13.69	$	0.49	$	1.13	$	1.62		$	(0.06	)	$	—		$	(0.06	)	$	15.25		11.88	%	$	1,822		0.13	%(e)		1.14	%(e)		3.42	%(e)		124	%
Year ended 12/31/09		11.09		0.53		2.27		2.80			(0.17	)		(0.03	)		(0.20	)		13.69		25.19			899		0.22			1.78			4.03			32
Year ended 12/31/08(f)		10.00		0.11		1.17		1.28			(0.19	)		—			(0.19	)		11.09		12.88			141		0.17	(g)		79.26	(g)		5.72	(g)		6
Series II
Year ended 12/31/10		13.65		0.45		1.12		1.57			(0.05	)		—			(0.05	)		15.17		11.54			65,362		0.38	(e)		1.39	(e)		3.17	(e)		124
Year ended 12/31/09		11.07		0.49		2.27		2.76			(0.15	)		(0.03	)		(0.18	)		13.65		24.95			45,962		0.47			2.03			3.78			32
Year ended 12/31/08(f)		10.00		0.11		1.15		1.26			(0.19	)		—			(0.19	)		11.07		12.66			396		0.42	(g)		79.51	(g)		5.47	(g)		6

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Estimated acquired fund fees from underlying fund is 0.64%.
(d)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(e)	Ratios are based on average daily net assets (000’s omitted) of $1,193 and $55,347 for Series I and Series II shares, respectively.
(f)	Commencement date of October 24, 2008.
(g)	Annualized.

NOTE 10—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to the Invesco V.I. Balanced-Risk Allocation Fund (the “Acquiring Fund”) in exchange for shares of the Acquiring Fund. The Agreement requires approval of the Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

Invesco V.I. Global Multi-Asset Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)
and Shareholders of Invesco V.I. Global Multi-Asset Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Global Multi-Asset Fund (formerly known as AIM V.I. PowerShares ETF Allocation Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Global Multi-Asset Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,132.90	$	0.54	$	1,024.70	$	0.51		0.10	%
Series II		1,000.00		1,131.20		1.88		1,023.44		1.79		0.35

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Global Multi-Asset 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	7.08%
U.S. Treasury Obligations*	8.28%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Global Multi-Asset Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Global Real Estate Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VIGRE-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

Returns from listed real estate were generally positive during the calendar year ended December 31, 2010, reflecting a positive sentiment toward asset classes and equity sectors capable of delivering attractive yields. As a result, Invesco V.I. Global Real Estate Fund delivered positive returns over the period and outperformed the Fund’s broad market index, the MSCI World Index, by a wide margin. The Fund’s underperformance relative to its style-specific benchmark, the FTSE EPRA/NAREIT Developed Real Estate Index, was primarily the result of security selection within U.S. REITs.

     The Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	17.51	%
Series II Shares	17.24
MSCI World Index▼ (Broad Market Index)	11.76
FTSE EPRA/NAREIT Developed Real Estate Index■ (Style-Specific Index)	20.40
Lipper VUF Real Estate Funds Category Average▼ (Peer Group)	23.62

^▼Lipper Inc.; ^■Invesco, Bloomberg L.P.

How we invest

Your Fund primarily holds real estate investment trusts (REITs) and other property-related securities from the U.S. and abroad whose value is driven by tangible assets. Our goal is to create a global Fund focused on total return that will perform at or above index levels with comparable levels of risk. Our investment strategy focuses on identifying U.S. and non-U.S. property types we believe will benefit from long-term sector trends. We use a fundamentals-driven investment process, including property market cycle analysis, property evaluation and management and structure review to identify securities with:

n	Quality underlying properties.
n	Solid management teams and flexible balance sheets.
n	Attractive valuations relative to peer investment alternatives.

     We attempt to manage risk by diversifying property types and geographic locations, as well as limiting the size of any one holding.

     We consider selling a holding when:

n	Relative valuation falls below desired levels.
n	Risk/return relationships change significantly.
n	Company fundamentals (property type, geography or management) change.
n	A more attractive investment opportunity is identified.

Market conditions and your Fund

Equity markets fluctuated during 2010 as investors weighed the competing issues of solid corporate profits and soft macroeconomic data. Corporate earnings were largely positive, but often overshadowed by concerns about high unemployment, a lack of consumer spending, soft housing data and the possibility of additional U.S. Federal Reserve (the Fed) accommodation. After rising through April, major equity indexes sold off precipitously in May as the sovereign debt crisis unfolded in the eurozone. Meanwhile U.S. economic

indicators remained weak, prompting concerns of a “double-dip” recession. Uncertainty created by the debt crisis combined with subdued employment, consumer spending and housing data added to concerns that the recovery was slowing to a sub-normal growth rate. Just as abruptly, however, the markets reversed course and rallied in September and October on modestly better economic news, ending the year with double-digit gains.

     The major equity indexes had positive returns for the calendar year, and all 10 sectors within the S&P 500 Index posted gains. More economically sensitive sectors such as consumer discretionary, industrials and materials had the highest returns, while the less economically sensitive sectors such as health care had some of the lowest returns.

     Given this environment, global real estate securities, as measured by the FTSE EPRA/NAREIT Developed Real Estate Index, and the Fund produced gains for the year and outperformed the broad market, as measured by the MSCI World Index. The Fund, however, underperformed its style specific benchmark for the year ended December 31, 2010. In addition to security selection in U.S. REITs, security selection and underweight positions in real estate securities in Sweden and Germany also negatively affected the Fund’s relative performance. Conversely, the Fund benefited from security selection in real estate securities in Singapore and the Netherlands. Market allocation to Australian Listed Property Trusts (LPT) was also a relative contributor during the year.

     Top contributors during the year included Simon Property Group and Equity Residential. Recent equity offerings and debt refinancing by Simon Property Group, a REIT, which offered an attractive portfolio of top-tier U.S.

Portfolio Composition

By country

United States	39.8	%
Hong Kong	15.3
Japan	12.0
Australia	8.7
United Kingdom	5.5
Singapore	4.3
France	3.9
Canada	2.7
Netherlands	2.1
Countries Each Less
Than 2.0% of Portfolio	4.3
Other Assets Less Liabilities	1.4

Top 10 Equity Holdings

1.	Sun Hung Kai Properties Ltd.	4.7	%
2.	Simon Property Group, Inc.	4.3
3.	Mitsubishi Estate Co. Ltd.	3.0
4.	Mitsui Fudosan Co., Ltd.	2.9
5.	Host Hotels & Resorts, Inc.	2.2
6.	Westfield Group	2.2
7.	Hongkong Land Holdings Ltd.	2.0
8.	Unibail-Rodamco S.E.	2.0
9.	Kimco Realty Corp.	2.0
10.	Vornado Realty Trust	1.9

Total Net Assets	$165.5 million
Total Number of Holdings		115

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

Invesco V.I. Global Real Estate Fund

regional malls, covered near-term debt maturities and provided necessary capital for future acquisition opportunities. Equity Residential is the largest public multifamily REIT. The multifamily sector is benefitting from a strong fundamental environment, such as demographic trends, low supply and a declining homeownership rate. These unique conditions have resulted in high occupancy rates and the expectation of attractive rental growth.

     Top detractors from the Fund’s performance included Henderson Land Development and Unite Group, two property development companies which experienced lackluster performance following strong returns in 2009. Henderson Land Development focuses on high-quality residential and commercial property development in Hong Kong and throughout mainland China. Unite Group, on the other hand, focuses on student residential accommodations in the U.K.

     At the end of 2010 and relative to our style-specific benchmark, we were modestly overweight in Japan, Hong Kong/China and the Netherlands. Conversely, we were underweight in the U.S., Singapore and Canada. Additionally, the Fund had no exposure to Germany and Belgium, while the index held modest exposure to these countries.

     We generally maintained our bias toward companies with higher quality assets and tenant rosters and flexible balance sheets with longer-term debt maturities. As a result of improvements in economic growth, we sought to add positions in companies capable of delivering higher cash flow growth. We continued to maintain a well-diversified portfolio across all property types and global economic regions, based on a combination of relative fundamentals and stock valuations.

     We thank you for your continued investment in Invesco V.I. Global Real Estate Fund.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Joe Rodriguez, Jr.
Portfolio manager, is lead manager of Invesco V.I. Global Real Estate Fund. He is head of real estate securities for Invesco Real Estate, where he oversees all phases of the unit, including securities research and administration. Mr. Rodriguez began his investment career in 1983 and joined Invesco in 1990. He earned his B.B.A. in economics and finance and his M.B.A. in finance from Baylor University.

Mark Blackburn
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Global Real Estate Fund. He joined Invesco in 1998. Mr. Blackburn earned a B.S. in accounting from Louisiana State University and an M.B.A. from Southern Methodist University. He is a Certified Public Accountant.

James Cowen
Portfolio manager, is manager of Invesco V.I. Global Real Estate Fund. Mr. Cowen has worked in the real estate industry since 1997 and joined Invesco in 2001. He earned a Master of Town and Country Planning degree from the University of Manchester and a Master of Philosophy degree in land economy from Cambridge University.

Paul Curbo
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Global Real Estate Fund. He joined Invesco in 1998. Mr. Curbo earned a B.B.A. in finance from The University of Texas at Dallas.

James Trowbridge
Portfolio manager, is manager of Invesco V.I. Global Real Estate Fund. He joined Invesco in 1989. Mr. Trowbridge earned his B.A. in finance from Indiana University.

Darin Turner
Portfolio manager, is manager of Invesco V.I. Global Real Estate Fund. He joined Invesco in 2005. Mr. Turner earned a B.B.A. in finance from The University of Texas at Arlington and an M.B.A. specializing in investments from Southern Methodist University.

Ping Ying Wang
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Global Real Estate Fund. She joined Invesco in 1996. She earned a B.S. in international finance from the People’s University of China and a Ph.D. in finance from The University of Texas at Dallas.

Invesco V.I. Global Real Estate Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Fund and index data from 3/31/98

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (3/31/98)			8.59	%
	10	Years	10.17
	5	Years	2.88
	1	Year	17.51
Series II Shares
	10	Years	9.91	%
	5	Years	2.64
	1	Year	17.24

Series II shares incepted on April 30, 2004. Performance shown prior to that date is that of Series I shares, restated to reflect the higher 12b-1 fees applicable to Series II. Series I performance reflects any applicable fee waivers or expense reimbursements. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial

adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.26% and 1.45%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.26% and 1.51%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Global Real Estate Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing

variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2012. See current prospectus for more information.

Invesco V.I. Global Real Estate Fund

Invesco V.I. Global Real Estate Fund’s investment objective is total return through growth of capital and current income.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

An investment by an underlying fund in ETFs generally presents the same primary risks as an investment in a mutual fund. In addition, ETFs may be subject to the following: (1) a discount of the ETF’s shares to its net asset value; (2) failure to develop an active trading market for the ETF’s shares; (3) the listing exchange halting trading of the ETF’s shares; (4) failure of the ETF’s shares to track the referenced index; and (5) holding troubled securities in the referenced index. ETFs may involve duplication of management fees and certain other expenses, as the Fund indirectly bears its proportionate share of any expenses paid by the ETFs in which it invests. Further, certain of the ETFs in which the Fund may invest are leveraged. The more a Fund invests in such leveraged ETFs, the more this leverage will magnify any losses on those investments.

     The Fund’s foreign investments will be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     Investments in real estate related instruments may be affected by economic, legal, cultural, environmental or technological factors that affect property values, rents or occupancies of real estate related to the Fund’s holdings.

     Interest rate risk refers to the risk that bond prices generally fall as interest rates rise; conversely, bond prices generally rise as interest rates fall. Specific bonds differ in their sensitivity to changes in interest rates depending on their individual characteristics, including duration.

     The Fund may invest in obligations issued by U.S. government agencies and instrumentalities that may receive varying levels of support from the government, which could affect the Fund’s ability to recover should they default.

     Short sales may cause the Fund to repurchase a security at a higher price, causing a loss. As there is no limit on how

much the price of the security can increase, the Fund’s exposure is unlimited.

     The issuer of instruments in which the Fund invests may be unable to meet interest and/or principal payments, thereby causing its instruments to decrease in value and lowering the issuer’s credit rating.

     Junk bonds involve a greater risk of default or price changes due to changes in the credit quality of the issuer. The values of junk bonds fluctuate more than those of high-quality bonds in response to company, political, regulatory or economic developments. Values of junk bonds can decline significantly over short periods of time.

     To the extent, the Fund invests a greater amount in any one sector or industry, the Fund’s performance will depend to a greater extent on the overall condition of the sector or industry, and there is increased risk to the Fund if conditions adversely affect that sector or industry.

     The Fund may invest a large percentage of its assets in a limited number of securities, which could negatively affect the value of the Fund.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

     The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

About indexes used in this report

The MSCI World Index is an unmanaged index considered representative of stocks of developed countries.

     The FTSE EPRA/NAREIT Developed Real Estate Index is an unmanaged index considered representative of global real estate companies and REITs.

     The Lipper VUF Real Estate Funds Category Average represents an average of all of the variable insurance underlying funds in the Lipper Real Estate Funds category.

     The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     CPA^® and Certified Public Accountant^® are trademarks owned by the American Institute of Certified Public Accountants.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Global Real Estate Fund

Schedule of Investments

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–98.62%
Australia–8.72%
CFS Retail Property Trust		1,120,743	$	2,015,706
Charter Hall Retail REIT		128,802		386,091
Dexus Property Group		1,316,697		1,069,698
Goodman Group		3,690,269		2,451,206
ING Office Fund		1,426,940		809,295
Stockland		855,829		3,148,458
Westfield Group		367,060		3,593,445
Westfield Retail Trust(a)		367,060		964,003
				14,437,902
Austria–0.34%
Conwert Immobilien Invest S.E.		39,207		563,817
Brazil–0.25%
BR Properties S.A.(b)		8,800		96,195
Multiplan Empreendimentos Imobiliarios S.A.		14,500		322,067
				418,262
Canada–2.70%
Chartwell Senior Housing REIT		94,100		771,822
Cominar REIT		35,400		739,378
Morguard REIT		33,200		489,694
Primaris Retail REIT		60,600		1,187,330
RioCan REIT		58,000		1,279,455
				4,467,679
China–1.67%
Agile Property Holdings Ltd.		916,000		1,348,168
KWG Property Holding Ltd.		642,500		488,605
Shimao Property Holdings Ltd.		609,500		920,586
				2,757,359
Finland–0.45%
Sponda Oyj		144,658		750,478
France–3.88%
Fonciere des Regions		8,553		828,746
Klepierre		27,379		989,390
Mercialys		14,490		544,788
Societe Immobiliere de Location pour I’Industrie et le Commerce		6,343		785,955
Unibail-Rodamco S.E.(a)		16,515		3,273,582
				6,422,461
Hong Kong–15.34%
China Overseas Land & Investment Ltd.		1,096,301		2,028,202
Hang Lung Properties Ltd.		459,000		2,146,543
Henderson Land Development Co. Ltd.		86,000		586,404
Hongkong Land Holdings Ltd.		458,000		3,322,679
Hysan Development Co. Ltd.		273,000		1,285,483
Kerry Properties Ltd.		246,900		1,286,467
Link REIT (The)		531,000		1,649,811
New World Development Co., Ltd.		392,000		734,657
Sino Land Co. Ltd.		964,000		1,803,283
Sun Hung Kai Properties Ltd.		470,000		7,790,790
Wharf (Holdings) Ltd. (The)		357,000		2,746,578
				25,380,897
Italy–0.22%
Beni Stabili S.p.A.		440,998		373,254
Japan–11.96%
Advance Resident Investment		331		740,808
AEON Mall Co., Ltd.		26,200		703,139
Japan Prime Realty Investment Corp.		281		864,828
Japan Real Estate Investment Corp.		169		1,751,791
Japan Retail Fund Investment Corp.		320		613,369
Kenedix Realty Investment Corp.		173		812,502
Mitsubishi Estate Co. Ltd.		265,000		4,913,086
Mitsui Fudosan Co., Ltd.		239,000		4,763,523
Nippon Building Fund Inc.		123		1,261,344
NTT Urban Development Corp.		656		646,067
ORIX JREIT Inc.		54		351,003
Sumitomo Realty & Development Co., Ltd.		99,000		2,363,179
				19,784,639
Malta–0.00%
BGP Holdings PLC(a)		3,053,090		0
Netherlands–2.15%
Corio N.V.		27,967		1,797,751
Eurocommercial Properties N.V.		13,600		626,992
Wereldhave N.V.		11,590		1,133,193
				3,557,936
Singapore–4.34%
CapitaCommercial Trust		589,000		689,418
Capitaland Ltd.		796,000		2,310,815
CapitaMall Trust		629,550		956,912
Global Logistic Properties Ltd.(a)		423,000		712,199
Keppel Land Ltd.		396,000		1,481,643
Suntec REIT		879,000		1,027,750
				7,178,737

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Global Real Estate Fund

	Shares		Value
Sweden–0.65%
Castellum A.B.		77,809	$	1,067,544
Switzerland–0.70%
Swiss Prime Site AG(a)		15,465		1,155,031
United Kingdom–5.47%
Big Yellow Group PLC		113,384		619,705
British Land Co. PLC		197,369		1,616,388
Derwent London PLC		44,387		1,080,756
Great Portland Estates PLC		66,722		375,495
Hammerson PLC		183,340		1,194,117
Hansteen Holdings PLC		270,365		343,698
Land Securities Group PLC		199,593		2,100,510
Segro PLC		147,333		658,176
Shaftesbury PLC		87,262		609,778
Unite Group PLC(a)		148,489		449,561
				9,048,184
United States–39.78%
Acadia Realty Trust		40,341		735,820
Alexandria Real Estate Equities, Inc.		20,100		1,472,526
AvalonBay Communities, Inc.		11,642		1,310,307
BioMed Realty Trust, Inc.		57,160		1,066,034
Boston Properties, Inc.		21,400		1,842,540
Brookfield Properties Corp.		77,299		1,361,045
Camden Property Trust		47,082		2,541,486
CBL & Associates Properties, Inc.		47,294		827,645
Corporate Office Properties Trust		14,416		503,839
DCT Industrial Trust Inc.		67,600		358,956
Developers Diversified Realty Corp.		16,986		239,333
DiamondRock Hospitality Co.(a)		69,700		836,400
Digital Realty Trust, Inc.		44,441		2,290,489
Duke Realty Corp.		8,398		104,639
Equity Residential		36,177		1,879,395
Essex Property Trust, Inc.		20,100		2,295,822
Health Care REIT, Inc.		61,167		2,913,996
Hersha Hospitality Trust		58,800		388,080
Highwoods Properties, Inc.		43,000		1,369,550
Home Properties, Inc.		18,100		1,004,369
Host Hotels & Resorts Inc.		207,559		3,709,079
Kilroy Realty Corp.		21,600		787,752
Kimco Realty Corp.		179,000		3,229,160
LaSalle Hotel Properties		24,300		641,520
Liberty Property Trust		54,086		1,726,425
Macerich Co. (The)		50,751		2,404,075
Marriott International Inc.–Class A		16,914		702,608
Mid-America Apartment Communities, Inc.		10,400		660,296
National Retail Properties Inc.		38,800		1,028,200
Nationwide Health Properties, Inc.		42,271		1,537,819
OMEGA Healthcare Investors, Inc.		13,872		311,288
Piedmont Office Realty Trust Inc.–Class A(a)		37,000		745,180
ProLogis		218,314		3,152,454
Regency Centers Corp.		56,500		2,386,560
Retail Opportunity Investments Corp.		30,176		299,044
Senior Housing Properties Trust		75,288		1,651,819
Simon Property Group, Inc.		70,903		7,054,139
SL Green Realty Corp.		24,008		1,620,780
Sovran Self Storage, Inc.		17,500		644,175
Starwood Hotels & Resorts Worldwide, Inc.		9,015		547,932
UDR, Inc.		51,900		1,220,688
Ventas, Inc.		5,700		299,136
Vornado Realty Trust		38,326		3,193,706
Washington Real Estate Investment Trust		30,200		935,898
				65,832,004
TOTAL INVESTMENTS–98.62% (Cost $128,962,081)				163,196,184
OTHER ASSETS LESS LIABILITIES–1.38%				2,279,912
NET ASSETS–100.00%			$	165,476,096

Investment Abbreviations:

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 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 December 31, 2010 represented 0.06% of the Fund’s Net Assets.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Global Real Estate Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $128,962,081)	$	163,196,184
Foreign currencies, at value (Cost $1,605,123)		1,596,853
Receivable for:
Investments sold		309,989
Fund shares sold		279,162
Dividends		642,051
Investment for trustee deferred compensation and retirement plans		12,946
Total assets		166,037,185
Liabilities:
Payable for:
Investments purchased		171,212
Fund shares reacquired		66,961
Amount due custodian		23,457
Accrued fees to affiliates		203,416
Accrued other operating expenses		72,016
Trustee deferred compensation and retirement plans		24,027
Total liabilities		561,089
Net assets applicable to shares outstanding	$	165,476,096
Net assets consist of:
Shares of beneficial interest	$	173,949,870
Undistributed net investment income		1,843,563
Undistributed net realized gain (loss)		(44,547,019	)
Unrealized appreciation		34,229,682
	$	165,476,096
Net Assets:
Series I	$	131,461,601
Series II	$	34,014,495
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		9,679,895
Series II		2,554,774
Series I:
Net asset value per share	$	13.58
Series II:
Net asset value per share	$	13.31

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $215,755)	$	5,791,996
Dividends from affiliated money market funds		1,836
Total investment income		5,793,832
Expenses:
Advisory fees		1,082,146
Administrative services fees		395,792
Custodian fees		134,970
Distribution fees — Series II		45,421
Transfer agent fees		30,763
Trustees’ and officers’ fees and benefits		19,463
Other		70,518
Total expenses		1,779,073
Less: Fees waived		(2,721	)
Net expenses		1,776,352
Net investment income		4,017,480
Realized and unrealized gain from:
Net realized gain (loss) from:
Investment securities		7,226,400
Foreign currencies		(96,356	)
		7,130,044
Change in net unrealized appreciation (depreciation) of:
Investment securities		11,165,660
Foreign currencies		(4,820	)
		11,160,840
Net realized and unrealized gain		18,290,884
Net increase in net assets resulting from operations	$	22,308,364

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Global Real Estate Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	4,017,480		$	2,709,902
Net realized gain (loss)		7,130,044			(20,336,177	)
Change in net unrealized appreciation		11,160,840			50,498,502
Net increase in net assets resulting from operations		22,308,364			32,872,227
Distributions to shareholders from net investment income:
Series I		(6,161,371	)		—
Series II		(1,036,283	)		—
Total distributions from net investment income		(7,197,654	)		—
Share transactions–net:
Series I		(9,517,933	)		15,146,597
Series II		19,873,135			5,205,429
Net increase in net assets resulting from share transactions		10,355,202			20,352,026
Net increase in net assets		25,465,912			53,224,253
Net assets:
Beginning of year		140,010,184			86,785,931
End of year (includes undistributed net investment income of $1,843,563 and $3,301,174, respectively)	$	165,476,096		$	140,010,184

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Global Real Estate Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is total return through growth of capital and current income.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as

Invesco V.I. Global Real Estate Fund

	institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
	The Fund recharacterizes distributions received from REIT investments based on information provided by the REIT into the following categories: ordinary income, long-term and short-term capital gains, and return of capital. If information is not available on a timely basis from the REIT, the recharacterization will be based on available information which may include the previous year’s allocation. If new or additional information becomes available from the REIT at a later date, a recharacterization will be made in the following year. The Fund records as dividend income the amount recharacterized as ordinary income and as realized gain the amount recharacterized as capital gain in the Statement of Operations, and the amount recharacterized as return of capital as a reduction to the cost of investments in the Statement of Assets and Liabilities. These recharacterizations are reflected in the accompanying financial statements.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to

Invesco V.I. Global Real Estate Fund

	federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Other Risks — The Fund’s investments are concentrated in a comparatively narrow segment of the economy. Consequently, the Fund may tend to be more volatile than other mutual funds, and the value of the Fund’s investments may tend to rise and fall more rapidly.
	The Fund concentrates its assets in the real estate industry, an investment in the fund will be closely linked to the performance of the real estate markets. Property values may fall due to increasing vacancies or declining rents resulting from economic, legal, cultural or technological developments.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.75%
Next $250 million		0	.74%
Next $500 million		0	.73%
Next $1.5 billion		0	.72%
Next $2.5 billion		0	.71%
Next $2.5 billion		0	.70%
Next $2.5 billion		0	.69%
Over $10 billion		0	.68%

Invesco V.I. Global Real Estate Fund

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $2,721.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $345,792 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

Invesco V.I. Global Real Estate Fund

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Australia	$	14,051,811	$	386,091	$	—	$	14,437,902
Austria		563,817		—		—		563,817
Brazil		418,262		—		—		418,262
Canada		4,467,679		—		—		4,467,679
China		2,268,754		488,605		—		2,757,359
Finland		750,478		—		—		750,478
France		785,955		5,636,506		—		6,422,461
Hong Kong		13,532,771		11,848,126		—		25,380,897
Italy		373,254		—		—		373,254
Japan		19,784,639		—		—		19,784,639
Malta		—		—		0		0
Netherlands		—		3,557,936		—		3,557,936
Singapore		4,178,504		3,000,233				7,178,737
Sweden		—		1,067,544		—		1,067,544
Switzerland		1,155,031		—		—		1,155,031
United Kingdom		4,137,169		4,911,015		—		9,048,184
United States		65,832,004		—		—		65,832,004
	$	132,300,128	$	30,896,056	$	0	$	163,196,184

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $2,810 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	7,197,654	$	—

Invesco V.I. Global Real Estate Fund

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	7,672,227
Net unrealized appreciation — investments		21,403,412
Net unrealized appreciation (depreciation) — other investments		(4,422	)
Temporary book/tax differences		(22,756	)
Post-October deferrals		(29,456	)
Capital loss carryforward		(37,492,779	)
Shares of beneficial interest		173,949,870
Total net assets	$	165,476,096

  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 difference is attributable primarily to wash sales 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 utilized $3,823,926 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	14,871,434
December 31, 2017		22,621,345
Total capital loss carryforward	$	37,492,779

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $130,898,932 and $122,272,867, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	22,411,762
Aggregate unrealized (depreciation) of investment securities		(1,008,350	)
Net unrealized appreciation of investment securities	$	21,403,412
Cost of investments for tax purposes is $141,792,772.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of passive foreign investment companies, on December 31, 2010, undistributed net investment income was increased by $1,722,563 and undistributed net realized gain (loss) was decreased by $1,722,563. This reclassification had no effect on the net assets of the Fund.

Invesco V.I. Global Real Estate Fund

NOTE 9—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		3,250,045		$	40,832,439			4,597,449		$	43,715,169
Series II		1,654,806			20,893,454			617,087			6,098,786
Issued as reinvestment of dividends:
Series I		477,626			6,161,371			—			—
Series II		81,855			1,036,283			—			—
Reacquired:
Series I		(4,611,903	)		(56,511,743	)		(2,977,162	)		(28,568,572	)
Series II		(169,623	)		(2,056,602	)		(91,409	)		(893,357	)
Net increase in share activity		682,806		$	10,355,202			2,145,965		$	20,352,026

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 47% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Global Real Estate Fund

NOTE 10—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																											Ratio of			Ratio of
																											expenses			expenses
					Net gains																						to average			to average net			Ratio of net
	Net asset				on securities						Dividends			Distributions													net assets			assets without			investment
	value,		Net		(both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			Distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	12.14	$	0.35	$	1.74		$	2.09		$	(0.65	)	$	—		$	(0.65	)	$	13.58		17.51	%	$	131,462		1.20	%(d)		1.20	%(d)		2.82	%(d)		87	%
Year ended 12/31/09		9.23		0.26		2.65			2.91			—			—			—			12.14		31.53			128,224		1.26			1.26			2.59			72
Year ended 12/31/08		21.88		0.44		(10.35	)		(9.91	)		(1.08	)		(1.66	)		(2.74	)		9.23		(44.65	)		82,582		1.17			1.17			2.51			62
Year ended 12/31/07		28.74		0.38		(1.52	)		(1.14	)		(1.69	)		(4.03	)		(5.72	)		21.88		(5.54	)		143,773		1.13			1.22			1.31			57
Year ended 12/31/06		21.06		0.33		8.61			8.94			(0.28	)		(0.98	)		(1.26	)		28.74		42.60			192,617		1.15			1.30			1.32			84
Series II
Year ended 12/31/10		11.93		0.32		1.70			2.02			(0.64	)		—			(0.64	)		13.31		17.24			34,014		1.45	(d)		1.45	(d)		2.57	(d)		87
Year ended 12/31/09		9.10		0.24		2.59			2.83			—			—			—			11.93		31.10			11,786		1.45			1.51			2.40			72
Year ended 12/31/08		21.66		0.36		(10.19	)		(9.83	)		(1.07	)		(1.66	)		(2.73	)		9.10		(44.72	)		4,203		1.42			1.42			2.26			62
Year ended 12/31/07		28.57		0.29		(1.49	)		(1.20	)		(1.68	)		(4.03	)		(5.71	)		21.66		(5.76	)		2,646		1.38			1.47			1.06			57
Year ended 12/31/06		20.98		0.27		8.58			8.85			(0.28	)		(0.98	)		(1.26	)		28.57		42.30			311		1.40			1.55			1.07			84

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s) of $126,118 and $18,169 Series I and Series II shares, respectively.

Invesco V.I. Global Real Estate Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Global Real Estate Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Global Real Estate Fund (formerly known as AIM V.I. Global Real Estate Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Global Real Estate Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,250.30	$	6.86	$	1,019.11	$	6.16		1.21	%
Series II		1,000.00		1,248.80		8.28		1,017.85		7.43		1.46

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Global Real Estate 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	0.00%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Global Real Estate Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Government Securities Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VIGOV-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2010, Invesco V.I. Government Securities Fund underperformed its style-specific and broad market indexes. Duration positioning within the Fund contributed to slight underperformance relative to our style-specific benchmark. The Fund’s underperformance of its broad market index can be attributed to the Fund’s government securities-only mandate during a period when non-government securities outperformed.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	5.40	%
Series II Shares	5.10
Barclays Capital U.S. Aggregate Index▼ (Broad Market Index)	6.54
Barclays Capital U.S. Government Index▼ (Style-Specific Index)	5.52
Lipper VUF General U.S. Government Funds Index▼ (Peer Group Index)	6.07

^▼ Lipper Inc.

How we invest

We invest primarily in debt securities issued, guaranteed or backed by the U.S. government or its agencies and instrumentalities. These securities include: U.S. Treasury notes and bonds, U.S. agency debentures and agency-backed mortgage-backed securities (MBS). The Fund may invest in derivative instruments such as interest rate futures contracts and swap agreements and engage in mortgage dollar roll transactions, a form of repurchase agreement activity in the to-be-announced (TBA) market for agency mortgage-backed securities.

     Our security selection is supported by a team of independent specialists. Team members conduct top-down macroeconomic as well as bottom-up analysis on individual securities. Recommendations are communicated to portfolio managers through proprietary technology that allows all investment professionals to communicate in a timely manner.

     Portfolio construction begins with a well-defined Fund design that establishes

the target investment vehicles for generating the desired “alpha” (the extra return above a specific benchmark) as well as the risk parameters for the Fund. Investment vehicles are evaluated for liquidity and relative value.

     Sell decisions are based on:

n	A conscious decision to alter the Fund’s macro risk exposure (such as duration, yield curve positioning, sector exposure).
n	The need to limit or reduce exposure to a particular sector or issuer.
n	Degradation of an issuer’s credit quality.
n	Realignment of a valuation target.
n	Presentation of a better relative value opportunity.

Market conditions and your Fund

In the U.S. and much of the developed world, a gradual and somewhat lackluster recovery continued during 2010, with central banks keeping interest rates at low levels and with few of them withdrawing their quantitative easing measures.

This helped private sector companies improve their balance sheets and earnings following the global financial crisis that began to dissipate in early 2009. However, investor skepticism of global governments’ abilities to retire huge amounts of debt without affecting economic growth rates caused sovereign debt distress (especially for eurozone countries) and became a focal point of investor concern.

     In the U.S., economic recovery was present, although the pace remained modest as stubbornly high unemployment and housing sector weakness continued to weigh on the economy. Real gross domestic product (GDP), the broadest measure of overall U.S. economic activity, increased at an annual rate of 3.7%, 1.7% and 2.6% for the first, second and third quarters of 2010, respectively.¹ The U.S. Federal Reserve (the Fed) maintained a very accommodative monetary policy throughout the period, with the federal funds target rate unchanged in its range of zero to 0.25%.² The Fed recently described its view of the U.S. economy by stating: “The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated.”²

     U.S. Treasury yields for securities with maturities of two to 30 years ended the year lower than at the start, indicative of positive 12-month returns across government bond sectors.³ Treasuries performed well for the year despite a significant rise in yields for intermediate and longer maturity securities during the final three months of 2010, driven by rising inflation expectations and improving economic data. The broader U.S. investment grade bond market, as

Portfolio Composition

By Investment type

U.S. Government Sponsored
Mortgage-Backed Securities	70.2	%
U.S. Government Sponsored
Agency Securities	21.2
U.S. Treasury Securities	8.6
U.S. Dollar Denominated Bonds & Notes	0.4
Money Market Funds
Plus Other Assets Less Liabilities	(0.4	)

Top 10 Fixed Income Issuers*

1.	Federal National
	Mortgage Association	18.6	%
2.	Freddie Mac REMICs	16.9
3.	Ginnie Mae REMICs	11.6
4.	Federal Home Loan Bank	10.0
5.	Federal Agriculture Mortgage Corp.	9.3
6.	U.S. Treasury Notes	7.8
7.	Federal Home Loan Mortgage Corp.	7.1
8.	Fannie Mae REMICs	5.3
9.	Government National
	Mortgage Association	4.8
10.	Federal Farm Credit Bank	4.6

Total Net Assets	$1.1 billion
Total Number of Holdings*		818

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.

Invesco V.I. Government Securities Fund

measured by the Barclays Capital U.S. Aggregate Index, also generated positive total return for the 12 months ended December 31, 2010. Slow economic growth, the avoidance of a double-dip recession, a recovery in corporate financial health, strong inflows into credit-related asset classes and low overall interest rates supported the performance of bonds, especially non-government sectors.

     In this environment, the Fund generated positive returns, but slightly underperformed its style-specific index, the Barclays Capital U.S. Government Index, for the year. Within the Fund, allocation decisions that favored the yield advantage and price stability of short average life agency MBS, collateralized mortgage obligations (CMOs) and higher coupon agency pass-through MBS slightly benefited performance versus the style-specific index, and contributed to a higher-than-index average yield-to-maturity for the period.

     To accommodate the emphasis on agency CMO and MBS, the Fund maintained an underweight allocation in lower yielding fixed-rate, fixed-maturity U.S. Treasuries. The Fund also benefited from incremental income earned by engaging in dollar (mortgage) roll activity, a type of repurchase transaction in the highly liquid TBA market for agency MBS. A dollar roll involves the Fund selling an MBS to a financial institution, with an agreement to repurchase a substantially similar security at an agreed upon price and date. Cash proceeds from the sale may be invested in short-term instruments, and the income from these investments, together with any additional fee income received on the sale, generate income for the Fund.

     The Fund also can use active duration and yield curve positioning for risk management and for generating alpha versus its style-specific benchmark. Duration measures a portfolio’s price sensitivity to interest rate changes, with a shorter duration portfolio tending to be less sensitive to these changes. The contribution to performance from duration positioning versus the style-specific benchmark was mixed over the period, but overall it had a negative effect. On average, we maintained duration positioning close to neutral versus the style-specific benchmark for the year, but the timing and magnitude of tactical changes were detrimental to relative returns. We were slightly shorter in duration than the style-specific index

for much of the first three quarters of the year when interest rates trended lower. This prevented us from fully participating in the rally as longer duration asset class prices rose. Likewise, a sustained longer-than-style-specific-index duration positioning during the fourth quarter of 2010 was also detrimental to performance as interest rates rose.

     Yield curve positioning during the third and fourth quarters, when the portfolio held a greater quantity of longer duration securities than the index, also had a slight negative effect on performance. U.S. Treasury note futures contracts were an important tool used in the management of our targeted portfolio duration.

     We thank you for your investment in Invesco V.I. Government Securities Fund

1	Bureau of Economic Analysis
2	U.S. Federal Reserve
3	Barclays Capital

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Clint Dudley
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Government Securities Fund. He joined Invesco in 1998. Mr. Dudley earned a B.B.A. and an M.B.A. from Baylor University. He is a member of the CFA Institute.

Brian Schneider
Chartered Financial Analyst, senior portfolio manager, is manager of Invesco V.I. Government Securities Fund. He joined Invesco in 1987. Mr. Schneider earned a B.A. in economics and an M.B.A., both from Bellarmine College.

Invesco V.I. Government Securities Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 4/30/93, Fund data from 5/5/93

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (5/5/93)			5.06	%
	10	Years	4.82
	5	Years	5.44
	1	Year	5.40
Series II Shares
	10	Years	4.55	%
	5	Years	5.17
	1	Year	5.10

Series II shares incepted on September 19, 2001. Performance shown prior to that date is that of Series I shares, restated to reflect the higher 12b-1 fees applicable to Series II. Series I performance reflects any applicable fee waivers or expense reimbursements. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your

variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.73% and 0.98%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.75% and 1.00%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Government Securities Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered

through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2012. See current prospectus for more information.

Invesco V.I. Government Securities Fund

Invesco V.I. Government Securities Fund’s investment objective is total return, comprised of current income and capital appreciation.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

     Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa.

     Reinvestment risk is the risk that a bond’s cash flows (coupon income and principal repayment) will be reinvested at an interest rate below that on the original bond.

     The Fund may invest in obligations issued by U.S. government agencies and instrumentalities that may receive varying levels of support from the government, which could affect the Fund’s ability to recover should they default.

     The Fund may invest in mortgage and asset-backed securities that are subject to prepayment or call risk, which is the risk that the borrower’s payments may be received earlier or later than expected due to changes in prepayment rates on underlying loans. Securities may be prepaid at a price less than the original purchase value.

     The Fund may use enhanced investment techniques such as derivatives. The principal risk of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets. Derivatives are subject to counterparty risk — the risk that the other party will not complete the transaction with the Fund.

     Leveraging entails risks such as magnifying changes in the value of the portfolio’s securities.

     Reverse repurchase agreements involve the risk that the market value of securities to be repurchased may decline below the repurchase price or that the other party may default on its obligation, resulting in delays, additional costs or the restriction of proceeds from the sale.

     Dollar roll transactions involve the risk that the market value and yield of the securities retained by the Fund may decline below the price of the mortgage-related securities sold by the Fund that it is obligated to repurchase.

     The Fund may invest a large percentage of its assets in a limited number of securities or other instruments, which could negatively affect the value of the Fund.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

About indexes used in this report

The Barclays Capital U.S. Aggregate Index is an unmanaged index considered representative of the U.S. investment-grade, fixed-rate bond market.

     The Barclays Capital U.S. Government Index is an unmanaged index considered representative of fixed-income obligations issued by the U.S. Treasury, government agencies and quasi-federal corporations.

     The Lipper VUF General U.S. Government Funds Index is an unmanaged index considered representative of general U.S. government variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Government Securities Fund

Schedule of Investments

December 31, 2010

	Principal
	Amount		Value
U.S. Government Sponsored Agency Mortgage-Backed Securities–70.23%
Collateralized Mortgage Obligations–41.96%
Fannie Mae Grantor Trust, 5.34%, 04/25/12	$	4,500,000	$	4,764,387
Fannie Mae REMICs, 4.00%, 09/25/16 to 02/25/40		8,814,570		9,184,159
4.50%, 11/25/16 to 10/25/22		13,990,343		14,648,507
5.00%, 02/25/17 to 05/25/30		12,025,943		12,315,476
5.50%, 01/25/26 to 03/25/28		2,181,134		2,197,201
3.50%, 12/25/31		4,453,161		4,656,581
4.25%, 06/25/33		783,010		798,475
6.00%, 10/25/33		1,781,119		1,794,306
0.56%, 05/25/36(a)		12,079,349		12,103,517
Fannie Mae Whole Loans, 5.50%, 07/25/34		1,555,689		1,560,308
Federal Home Loan Bank, 4.55%, 04/27/12		1,213,763		1,266,945
5.27%, 12/28/12		14,065,573		14,904,525
5.46%, 11/27/15		40,540,143		44,094,970
Freddie Mac REMICs, 6.75%, 06/15/11		6,380		6,426
5.25%, 08/15/11 to 08/15/32		12,482,755		13,133,339
5.38%, 08/15/11 to 09/15/11		3,452,915		3,514,856
3.88%, 12/15/12		430,945		437,930
4.50%, 12/15/15 to 04/15/30		18,019,196		18,498,441
6.00%, 09/15/16 to 09/15/29		11,410,198		11,594,768
3.50%, 10/15/16 to 12/15/27		5,568,450		5,710,674
4.00%, 11/15/16 to 02/15/30		31,515,026		33,029,585
5.00%, 05/15/18 to 03/15/31		14,209,186		14,583,169
3.75%, 10/15/18		7,092,075		7,385,698
4.75%, 05/15/23		4,419,274		4,567,664
5.50%, 01/15/27 to 09/15/30		16,516,933		16,899,780
0.66%, 04/15/28		5,674,016		5,709,935
0.56%, 03/15/36(a)		12,371,937		12,400,374
0.61%, 11/15/36(a)		15,255,783		15,264,940
0.66%, 06/15/37(a)		14,455,985		14,506,812
1.12%, 11/15/39(a)		7,564,515		7,678,963
Ginnie Mae REMICs, 3.13%, 04/16/16		2,896,514		2,920,336
2.17%, 02/16/24		21,772,657		21,917,676
5.00%, 09/16/27 to 02/20/30		7,827,594		7,986,643
4.21%, 01/16/28		4,606,622		4,693,870
4.50%, 01/20/31 to 08/20/35		52,863,317		55,521,155
5.50%, 04/16/31		3,815,756		3,905,239
5.77%, 08/20/34(a)		3,656,659		4,006,375
4.00%, 03/20/36 to 02/20/38		25,286,914		26,601,263
La Hipotecaria S.A., Series 2010-1 GA, Class A, Floating Rate Pass Through Ctfs. 3.75%, 09/08/39(a)(b)		22,996,617		23,341,566
				460,106,834
Federal Home Loan Mortgage Corp. (FHLMC)–6.10%
Pass Through Ctfs., 7.00%, 05/01/11 to 12/01/37		15,280,466		17,471,791
6.50%, 10/01/12 to 12/01/35		6,680,421		7,417,178
6.00%, 09/01/13 to 02/01/34		4,292,012		4,695,785
8.00%, 07/01/15 to 09/01/36		12,988,521		15,273,706
7.50%, 03/01/16 to 08/01/36		5,039,249		5,717,643
5.00%, 07/01/18		1,859,467		1,978,125
10.50%, 08/01/19		5,025		5,713
4.50%, 09/01/20		9,288,976		9,791,742
8.50%, 09/01/20 to 08/01/31		923,917		1,089,405
10.00%, 03/01/21		70,968		81,095
9.00%, 06/01/21 to 06/01/22		573,548		649,351
7.05%, 05/20/27		347,541		393,552
6.03%, 10/20/30		2,107,683		2,355,276
				66,920,362

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Government Securities Fund

	Principal
	Amount		Value
Federal National Mortgage Association (FNMA)–17.41%
Pass Through Ctfs., 7.00%, 07/01/11 to 06/01/36	$	22,806,847	$	25,428,797
7.50%, 08/01/11 to 07/01/37		16,033,480		18,432,304
8.00%, 06/01/12 to 11/01/37		13,853,001		15,945,731
8.50%, 06/01/12 to 08/01/37		5,398,104		6,281,684
6.50%, 05/01/13 to 11/01/37		14,394,943		15,875,599
10.00%, 09/01/13		12,563		12,748
6.00%, 09/01/17 to 03/01/37		4,686,894		5,129,136
5.00%, 11/01/17 to 12/01/33		24,654,885		26,374,183
4.50%, 09/01/18 to 11/01/21		50,106,604		53,056,940
5.50%, 03/01/21		507		545
6.75%, 07/01/24		1,167,094		1,312,822
6.95%, 10/01/25 to 09/01/26		140,343		159,315
Pass Through Ctfs., TBA, 4.00%, 01/01/41(c)		23,000,000		22,885,000
				190,894,804
Government National Mortgage Association (GNMA)–4.76%
Pass Through Ctfs., 6.50%, 02/20/12 to 01/15/37		14,108,745		15,983,896
8.00%, 07/15/12 to 01/15/37		4,119,061		4,784,001
6.75%, 08/15/13		32,095		34,134
7.50%, 10/15/14 to 10/15/35		7,072,207		8,206,354
11.00%, 10/15/15		1,872		1,890
9.00%, 10/20/16 to 12/20/16		91,690		102,808
7.00%, 04/15/17 to 01/15/37		6,095,851		6,947,516
10.50%, 09/15/17 to 11/15/19		3,493		3,807
8.50%, 12/15/17 to 01/15/37		891,390		1,004,804
10.00%, 06/15/19		33,375		37,184
6.00%, 09/15/20 to 08/15/33		2,842,556		3,157,634
6.95%, 08/20/25 to 08/20/27		915,099		1,040,707
6.25%, 06/15/27		135,553		151,818
6.38%, 10/20/27 to 09/20/28		754,942		851,776
6.10%, 12/20/33		8,537,431		9,842,501
				52,150,830
Total U.S. Government Sponsored Agency Mortgage-Backed Securities (Cost $751,761,404)				770,072,830
U.S. Government Sponsored Agency Securities–21.21%
Federal Agricultural Mortgage Corp.–9.31%
Notes, 2.11%, 03/15/12		70,000,000		70,884,126
Unsec. Notes, 2.20%, 11/09/11		25,000,000		25,266,953
1.25%, 12/06/13		6,000,000		5,951,719
				102,102,798
Federal Farm Credit Bank (FFCB)–4.63%
Bonds, 3.00%, 09/22/14		12,500,000		13,155,345
1.50%, 11/16/15		11,000,000		10,627,362
5.59%, 10/04/21		10,075,000		10,443,674
5.75%, 01/18/22		2,775,000		2,881,680
Global Bonds, 1.38%, 06/25/13		10,000,000		10,105,110
Medium-Term Notes, 5.75%, 12/07/28		3,100,000		3,590,065
				50,803,236
Federal Home Loan Bank (FHLB)–4.51%
Unsec. Bonds, 5.45%, 04/15/11		7,149,101		7,250,214
4.72%, 09/20/12		1,117,309		1,173,456
Unsec. Global Bonds, 1.63%, 03/20/13		23,000,000		23,439,543
1.88%, 06/21/13		10,000,000		10,240,139
Series 1, Unsec. Bonds, 5.77%, 03/23/18		6,728,759		7,403,586
				49,506,938
Federal Home Loan Mortgage Corp. (FHLMC)–1.04%
Unsec. Global Notes, 0.63%, 12/28/12		5,000,000		4,994,829
1.75%, 09/10/15		6,500,000		6,398,009
				11,392,838
Federal National Mortgage Association (FNMA)–1.22%
Unsec. Global Notes, 0.75%, 12/18/13		3,000,000		2,964,819
2.50%, 05/15/14		10,000,000		10,368,877
				13,333,696
Tennessee Valley Authority (TVA)–0.50%
Series A, Bonds, 6.79%, 05/23/12		5,000,000		5,430,684
Total U.S. Government Sponsored Agency Securities (Cost $228,818,913)				232,570,190

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Government Securities Fund

	Principal
	Amount		Value
U.S. Treasury Securities–8.60%
U.S. Treasury Notes–7.78%
0.75%, 09/15/13	$	4,500,000	$	4,485,234
2.38%, 02/28/15		11,000,000		11,333,437
1.25%, 08/31/15		3,000,000		2,917,031
2.75%, 05/31/17		22,000,000		22,268,125
2.38%, 07/31/17		10,000,000		9,865,625
3.13%, 05/15/19(d)		6,000,000		6,060,938
3.50%, 05/15/20		12,000,000		12,290,625
2.63%, 08/15/20		17,000,000		16,115,469
				85,336,484
U.S. Treasury Bonds–0.82%
8.75%, 05/15/20		3,500,000		5,092,500
7.63%, 02/15/25(d)		550,000		779,539
6.88%, 08/15/25(d)		500,000		667,969
4.25%, 05/15/39(d)		2,500,000		2,461,719
				9,001,727
Total U.S. Treasury Securities (Cost $96,674,979)				94,338,211
Foreign Sovereign Bonds–0.39%
Sovereign Debt–0.39%
Israel Government Agency for International Development (AID) Bond (Israel), Gtd. Bonds, 5.13%, 11/01/24 (Cost $3,829,928)		3,800,000		4,220,009
	Shares
Money Market Funds–1.32%
Government & Agency Portfolio–Institutional Class (Cost $14,437,887)(e)		14,437,887		14,437,887
TOTAL INVESTMENTS–101.75% (Cost $1,095,523,111)				1,115,639,127
OTHER ASSETS LESS LIABILITIES–(1.75)%				(19,159,902	)
NET ASSETS–100.00%			$	1,096,479,225

Investment Abbreviations:

Ctfs.	– Certificates
Gtd.	– Guaranteed
REMICs	– Real Estate Mortgage Investment Conduits
TBA	– To Be Announced
Unsec.	– Unsecured

Notes to Schedule of Investments:

(a)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2010.
(b)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The value of this security at December 31, 2010 represented 2.13% of the Fund’s Net Assets.
(c)	Security purchased on forward commitment basis. This security is subject to dollar roll transactions. See Note 1J.
(d)	All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1L and Note 4.
(e)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Government Securities Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $1,081,085,224)	$	1,101,201,240
Investments in affiliated money market funds, at value and cost		14,437,887
Total investments, at value (Cost $1,095,523,111)		1,115,639,127
Receivables for:
Variation margin		1,940,484
Fund shares sold		180,525
Dividends and interest		4,346,990
Principal paydowns		248,161
Investment for trustee deferred compensation and retirement plans		53,599
Other assets		381
Total assets		1,122,409,267
Liabilities:
Payable for:
Investments purchased		23,267,854
Fund shares reacquired		911,789
Accrued fees to affiliates		1,533,214
Accrued other operating expenses		69,025
Trustee deferred compensation and retirement plans		148,160
Total liabilities		25,930,042
Net assets applicable to shares outstanding	$	1,096,479,225
Net assets consist of:
Shares of beneficial interest	$	1,080,930,022
Undistributed net investment income		37,474,465
Undistributed net realized gain (loss)		(35,458,737	)
Unrealized appreciation		13,533,475
	$	1,096,479,225
Net Assets:
Series I	$	1,072,405,372
Series II	$	24,073,853
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		89,393,499
Series II		2,019,202
Series I:
Net asset value per share	$	12.00
Series II:
Net asset value per share	$	11.92

Statement of Operations

For the year ended December 31, 2010

Investment income:
Interest	$	32,448,445
Dividends from affiliated money market funds		14,633
Total investment income		32,463,078
Expenses:
Advisory fees		5,517,804
Administrative services fees		3,241,798
Custodian fees		63,904
Distribution fees:
Series II		42,253
Transfer agent fees		17,840
Trustees’ and officers’ fees and benefits		48,591
Other		121,224
Total expenses		9,053,414
Less: Fees waived and expense offset arrangement(s)		(279,307	)
Net expenses		8,774,107
Net investment income		23,688,971
Realized and unrealized gain (loss) from:
Net realized gain from:
Investment securities (includes net gains from securities sold to affiliates of $50,213)		3,058,050
Futures contracts		29,762,028
		32,820,078
Change in net unrealized appreciation (depreciation) of:
Investment securities		(206,441	)
Futures contracts		7,512,664
		7,306,223
Net realized and unrealized gain		40,126,301
Net increase in net assets resulting from operations	$	63,815,272

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Government Securities Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	23,688,971		$	46,745,306
Net realized gain		32,820,078			6,396,776
Change in net unrealized appreciation (depreciation)		7,306,223			(58,197,138	)
Net increase (decrease) in net assets resulting from operations		63,815,272			(5,055,056	)
Distributions to shareholders from net investment income:
Series I		(54,918,096	)		(60,184,129	)
Series II		(859,253	)		(678,455	)
Total distributions from net investment income		(55,777,349	)		(60,862,584	)
Distributions to shareholders from net realized gains:
Series I		—			(43,257,923	)
Series II		—			(522,035	)
Total distributions from net realized gains		—			(43,779,958	)
Share transactions–net:
Series I		(128,842,349	)		(290,464,747	)
Series II		9,854,940			(4,570,136	)
Net increase (decrease) in net assets resulting from share transactions		(118,987,409	)		(295,034,883	)
Net increase (decrease) in net assets		(110,949,486	)		(404,732,481	)
Net assets:
Beginning of year		1,207,428,711			1,612,161,192
End of year (includes undistributed net investment income of $37,474,465 and $55,633,788, respectively)	$	1,096,479,225		$	1,207,428,711

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Government Securities Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is total return, comprised of current income and capital appreciation.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the

Invesco V.I. Government Securities Fund

	security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.

Invesco V.I. Government Securities Fund

G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Other Risks — The Funds may invest in obligations issued by agencies and instrumentalities of the U.S. Government that may vary in the level of support they receive from the government. The government may choose not to provide financial support to government sponsored agencies or instrumentalities if it is not legally obligated to do so. In this case, if the issuer defaulted, the underlying fund holding securities of such issuer might not be able to recover its investment from the U.S. Government. Many securities purchased by the Fund are not guaranteed by the U.S. Government.
J.	Dollar Roll and Forward Commitment Transactions — The Fund may engage in dollar roll and forward commitment transactions with respect to mortgage-backed securities issued by GNMA, FNMA and FHLMC. These transactions are often conducted on a to be announced (“TBA”) basis. In a TBA mortgage-backed transaction, the seller does not specify the particular securities to be delivered. Rather, a Fund agrees to accept any security that meets specified terms, such as an agreed upon issuer, coupon rate and terms of the underlying mortgages. TBA mortgage-backed transactions generally settle once a month on a specific date.
	In a dollar roll transaction, the Fund sells a mortgage-backed security held in the Fund to a financial institution such as a bank or broker-dealer, and simultaneously agrees to purchase a substantially similar security (same type, coupon and maturity) from the institution at an agreed upon price and future date. The mortgage-backed securities to be purchased will bear the same coupon as those sold, but generally will be collateralized by different pools of mortgages with different prepayment histories. Based on the typical structure of dollar roll transactions by the Fund, the dollar roll transactions are accounted for as financing transactions in which the Fund receives compensation as either a “fee” or a “drop”. “Fee” income which is agreed upon amongst the parties at the commencement of the dollar roll and the “drop” which is the difference between the selling price and the repurchase price of the mortgage-backed securities are amortized to income. During the period between the sale and purchase settlement dates, the Fund will not be entitled to receive interest and principal payments on securities purchased and not yet settled. Proceeds of the sale may be invested in short-term instruments, and the income from these investments, together with any additional fee income received on the sale, could generate income for the Fund exceeding the yield on the security sold. Dollar roll transactions are considered borrowings under the 1940 Act.
	Forward commitment transactions involve commitments by the Fund to acquire or sell TBA mortgage-backed securities from/to a financial institution, such as a bank or broker-dealer at a specified future date and amount. The TBA mortgage-backed security is marked to market until settlement and the unrealized appreciation or depreciation is recorded in the statement of operations.
	At the time the Fund enters into the dollar roll or forward commitment transaction, mortgage-backed securities or other liquid assets held by the Fund having a dollar value equal to the purchase price or in an amount sufficient to honor the forward commitment will be segregated.
	Dollar roll transactions involve the risk that the market value of the securities retained by the Fund may decline below the price of the securities that the Fund has sold but is obligated to purchase under the agreement. In the event that the buyer of securities in a dollar roll transaction files for bankruptcy or becomes insolvent, the Fund’s use of the proceeds from the sale of the securities may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s obligation to purchase the securities. The return earned by the Fund with the proceeds of the dollar roll transaction may not exceed the return on the securities sold.
	Forward commitment transactions involve the risk that a counter-party to the transaction may fail to complete the transaction. If this occurs, the Fund may lose the opportunity to purchase or sell the security at the agreed upon price.
	Settlement dates of forward commitment transactions may be a month or more after entering into these transactions and as a result the market values of the securities may vary from the purchase or sale prices. Therefore, forward commitment transactions may increase the Fund’s overall interest rate exposure.
K.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
L.	Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or

Invesco V.I. Government Securities Fund

delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities.

M.

Collateral — To the extent the Fund has pledged or segregated a security as collateral and that security is subsequently sold, it is the Fund’s practice to replace such collateral no later than the next business day.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.50%
Over $250 million		0	.45%

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I shares to 0.73% and Series II shares to 0.98% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $279,186.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $285,632 for accounting and fund administrative services and reimbursed $2,956,166 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

Invesco V.I. Government Securities Fund

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1			Level 2		Level 3		Total
Equity Securities	$	14,437,887		$	—	$	—	$	14,437,887
U.S. Treasury Securities		—			94,338,211		—		94,338,211
U.S. Government Sponsored Securities		—			1,002,643,020		—		1,002,643,020
Foreign Government Debt Securities		—			4,220,009		—		4,220,009
	$	14,437,887		$	1,101,201,240	$	—	$	1,115,639,127
Futures*		(6,582,541	)		—		—		(6,582,541	)
Total Investments	$	7,855,346		$	1,101,201,240	$	—	$	1,109,056,586

*  Unrealized appreciation (depreciation).

NOTE 4—Derivative Investments

The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Value of Derivative Instruments at Period-End

The table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2010:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Interest rate risk
Futures Contracts(a)	$	380,786	$	(6,963,327	)

^(a) Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets & Liabilities.

Invesco V.I. Government Securities Fund

Effect of Derivative Instruments for the year ended December 31, 2010

The table below summarizes the gains on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain on
	Statement of Operations
	Futures*
Realized Gain
Interest rate risk	$	29,762,028
Change in Unrealized Appreciation
Interest rate risk		7,512,664
Total	$	37,274,692

*  The average value of futures outstanding during the period was $519,215,200.

Open Futures Contracts
								Unrealized
	Number of		Month/					Appreciation
Contract	Contracts		Commitment		Value			(Depreciation)
U.S. Treasury 2 Year Notes		317		March-2011/Long	$	69,393,281		$	47,314
U.S. Treasury 5 Year Notes		507		March-2011/Long		59,683,406			(434,754	)
U.S. Treasury 10 Year Notes		1,166		March-2011/Long		140,430,125			(4,475,601	)
Ultra U.S. Treasury Bonds		721		March-2011/Long		91,634,594			(2,001,199	)
Subtotal					$	361,141,406		$	(6,864,240	)
U.S. Treasury 30 Year Bonds		82		March-2011/Short	$	(10,014,250	)	$	281,699
Total					$	351,127,156		$	(6,582,541	)

NOTE 5—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities sales of $13,027,220, which resulted in net realized gains of $50,213.

NOTE 6—Expense Offset Arrangement(s)

The expense offset arrangement is comprised of custodian credits which result from periodic overnight cash balances at the custodian. For the year ended December 31, 2010, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $121.

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 are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $5,459 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 8—Cash Balances

The Fund may borrow for leveraging in an amount up to 5% of the Fund’s total assets (excluding the amount borrowed) at the time the borrowing is made. In doing so, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate. A Fund may not purchase additional securities when any borrowings from banks exceeds 5% of the Fund’s total assets.

Invesco V.I. Government Securities Fund

NOTE 9—Distributions to Shareholders and Tax Components of Net Assets

Distributions to Shareholders:

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	55,777,349	$	60,878,384
Long-term capital gain		—		43,764,158
Total distributions	$	55,777,349	$	104,642,542

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	37,617,791
Net unrealized appreciation — investments		19,984,727
Temporary book/tax differences		(143,326	)
Post-October deferrals		(16,616,541	)
Capital loss carryforward		(25,293,448	)
Shares of beneficial interest		1,080,930,022
Total net assets	$	1,096,479,225

  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 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 utilized $31,156,599 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2017	$	25,293,448

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 10—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $614,267,331 and $794,289,411, respectively. During the same period, purchases and sales of U.S. Treasury obligations were $108,130,115 and $33,548,954, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	25,556,085
Aggregate unrealized (depreciation) of investment securities		(5,571,358	)
Net unrealized appreciation of investment securities	$	19,984,727
Cost of investments for tax purposes is $1,095,654,400.

NOTE 11—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of paydown gains (losses), on December 31, 2010, undistributed net investment income was increased by $13,929,055, undistributed net realized gain (loss) was decreased by $13,929,055. This reclassification had no effect on the net assets of the Fund.

Invesco V.I. Government Securities Fund

NOTE 12—Share Information

	Summary of Share Activity
	Years ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		14,868,780		$	182,569,736			13,378,824		$	173,338,232
Series II		1,086,469			13,335,480			368,564			4,730,767
Issued as reinvestment of dividends:
Series I		4,508,875			54,918,094			8,534,823			103,442,051
Series II		70,954			859,253			99,626			1,200,490
Reacquired:
Series I		(29,794,392	)		(366,330,179	)		(44,095,427	)		(567,245,030	)
Series II		(355,134	)		(4,339,793	)		(821,161	)		(10,501,393	)
Net increase (decrease) in share activity		(9,614,448	)	$	(118,987,409	)		(22,534,751	)	$	(295,034,883	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 94% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 13—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																											Ratio of			Ratio of
					Net gains																						expenses			expenses
					(losses)																						to average			to average net			Ratio of net
	Net asset				on securities						Dividends			Distributions													net assets			assets without			investment
	value,		Net		(both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			Distributions			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	11.95	$	0.24	$	0.41		$	0.65		$	(0.60	)	$	—		$	(0.60	)	$	12.00		5.40	%	$	1,072,405		0.73	%(d)		0.75	%(d)		1.98	%(d)		61	%
Year ended 12/31/09		13.05		0.45		(0.43	)		0.02			(0.65	)		(0.47	)		(1.12	)		11.95		(0.01	)		1,192,967		0.73			0.75			3.47			55
Year ended 12/31/08		12.06		0.50		0.96			1.46			(0.47	)		—			(0.47	)		13.05		12.22			1,591,799		0.73			0.76			3.96			109
Year ended 12/31/07		11.80		0.59		0.16			0.75			(0.49	)		—			(0.49	)		12.06		6.43			1,169,985		0.73			0.76			4.93			106
Year ended 12/31/06		11.87		0.55		(0.13	)		0.42			(0.49	)		—			(0.49	)		11.80		3.55			907,403		0.71			0.77			4.62			89
Series II
Year ended 12/31/10		11.88		0.22		0.40			0.62			(0.58	)		—			(0.58	)		11.92		5.10			24,074		0.98	(d)		1.00	(d)		1.73	(d)		61
Year ended 12/31/09		12.97		0.41		(0.43	)		(0.02	)		(0.60	)		(0.47	)		(1.07	)		11.88		(0.26	)		14,462		0.98			1.00			3.22			55
Year ended 12/31/08		11.99		0.46		0.97			1.43			(0.45	)		—			(0.45	)		12.97		11.98			20,362		0.98			1.01			3.71			109
Year ended 12/31/07		11.74		0.56		0.15			0.71			(0.46	)		—			(0.46	)		11.99		6.11			18,770		0.98			1.01			4.68			106
Year ended 12/31/06		11.81		0.52		(0.13	)		0.39			(0.46	)		—			(0.46	)		11.74		3.28			16,218		0.96			1.02			4.37			89

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s) of $1,181,500 and $16,901 for Series I and Series II shares, respectively

NOTE 14—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would acquire all of the assets and liabilities of the Invesco Van Kampen V.I. Government Fund (the “Target Fund”) in exchange for shares of the Fund. The Agreement requires approval of the Target Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

Invesco V.I. Government Securities Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Government Securities Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Government Securities Fund (formerly known as AIM V.I. Government Securities Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Government Securities Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
			ACTUAL				(5% annual return before expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,007.30	$	3.64	$	1,021.58	$	3.67		0.72	%
Series II		1,000.00		1,009.80		4.91		1,020.32		4.94		0.97

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Government Securities 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Qualified Dividend Income*	0%
Corporate Dividends Received Deduction*	0%
U.S. Treasury Obligations*	21.46%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Government Securities Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. High Yield Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VIHYI-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2010, Invesco V.I. High Yield Fund underperformed the Fund’s style-specific index, the Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index, due mainly to the Fund’s conservative posture during the 12-month period.

     The Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares*	13.57	%
Series II Shares*	13.49
Barclays Capital U.S. Aggregate Index▼ (Broad Market Index)	6.54
Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index▼ (Style-Specific Index)+	14.94
Barclays Capital U.S. Corporate High Yield Index▼ (Former Style-Specific Index)+	15.12
Lipper VUF High Current Yield Bond Funds Category Average▼ (Peer Group)	13.61

▼	Lipper Inc.
*	Performance includes litigation proceeds. Had these proceeds not been received, total return would have been lower.
+	The Fund has elected to use the Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index as its style-specific benchmark instead of the Barclays Capital U.S. Corporate High Yield Index because it will better align the Fund’s style-specific benchmark with its investment process and restrictions.

How we invest

We invest primarily in debt securities that are determined to be below investment grade quality. These bonds, commonly known as “junk bonds,” are typically corporate bonds of U.S.-based companies, many of which are moderately sized firms. We principally invest in junk bonds rated B or above, although we regularly own bonds of lesser quality as well. We may invest in convertible bonds, preferred stock, derivatives and bank loans, but do not expect these instruments to currently be a substantial part of our portfolio. We may invest up to 25% of total assets in foreign securities. The Fund may also invest up to 15% of its total assets in securities of issuers located in developing markets.

     The primary driver of our security selection is fundamental bottom-up credit analysis conducted by a team of analysts who specialize by industry. This approach is augmented with an on-going review of the relative value of securities and a top-down process that includes sector, economic and quantitative analysis. Changes in a security’s risk/return profile or relative value and top-down factors generally determine buy and sell decisions.

     Portfolio construction begins with a well-defined Fund design that emphasizes diversification and establishes the target investment vehicles for generating the desired “alpha” (the return expected from an investment) as well as the risk parameters appropriate for the current positioning in the credit cycle.

Investments are evaluated for liquidity and risk versus relative value. Working closely with other investment specialists and traders, we determine the timing and amount of each “alpha” decision to use in the portfolio at any time, taking into account security selection skill and market opportunities.

     Sell decisions are based on:

n	Low equity value to debt, high subordination and negative free cash flow coupled with negative news, declining expectations or an increasing risk profile.
n	Very low yields.
n	Presentation of a better relative value opportunity.

Market conditions and your Fund

In the U.S. and most of the developed world, a gradual and somewhat lackluster recovery continued, with central banks keeping interest rates at low levels and with few of them withdrawing their quantitative easing measures. This helped private sector companies improve their balance sheets and earnings following the global financial crisis that began to dissipate in early 2009. However, investor skepticism of global governments’ abilities to retire huge amounts of debt without affecting economic growth rates caused sovereign debt distress (especially for eurozone countries) and became a focal point of investor concern.

     In the U.S., economic recovery was present, although the pace of recovery remained modest as stubbornly high unemployment and export weakness continued to weigh on the economy. Real gross domestic product (GDP), the broadest measure of overall U.S.

Portfolio Composition†

By credit quality

A	1.0	%
BBB	4.0
BB	30.6
B	43.7
CCC	10.2
CC	0.5
Non-Rated	6.5
Cash	3.5

Top 10 Fixed Income Issuers*

1.	CIT Group Inc.	1.8	%
2.	MGM Resorts International	1.5
3.	Wind Acquisition Finance S.A.	1.3
4.	Nielsen Finance LLC/CO.	1.3
5.	Ally Financial Inc.	1.3
6.	International Lease Finance Corp.	1.2
7.	UAL Corp.	1.2
8.	HCA, Inc.	1.1
9.	Sprint Nextel Corp.	1.1
10.	Caesars Entertainment Operating Co. Inc.	1.0

Top Five Industries

1.	Oil & Gas Exploration & Production	6.8	%
2.	Wireless Telecommunication Services	5.8
3.	Casinos & Gaming	5.1
4.	Building Products	3.7
5.	Airlines	3.1

Total Net Assets	$56.3 million
Total Number of Holdings*		373

† Source: Standard and Poor’s. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations, including specific securities, money market instruments or other debts. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest); ratings are subject to change without notice. “Non-Rated” indicates the debtor was not rated, and should not be interpreted as indicating low quality. For more information on Standard and Poor’s rating methodology, please visit www.standardandpoors.com and select ‘Understanding Ratings’ under Rating Resources on the homepage.

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.

Invesco V.I. High Yield Fund

economic activity, increased at an annual rate of 3.7%, 1.7% and 2.6% for the first, second and third quarters of 2010, respectively.¹ The U.S. Federal Reserve (the Fed) maintained a very accommodative monetary policy throughout the period, with the federal funds target rate unchanged in its range of zero to 0.25%.² The Fed recently described its view of the U.S. economy by stating: “The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated.”² Consequently, it was widely expected that the Fed would continue to keep interest rates low for an extended period.

     Defaults in the high yield bond market reached extreme lows in 2010 and were below those recorded during the previous year.

     The broad U.S. high yield bond market, as measured by the Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index, generated strong positive total return for the 12 months ended December 31, 2010. Slow but steady economic growth, the avoidance of a double-dip recession, a recovery in corporate financial health, strong inflows into the high yield asset class, low overall interest rates and a decline in defaults boosted the performance of high yield bonds. In May and November of 2010, debt concerns in Europe caused investors to scale back their risk profile and embrace the safe haven of U.S. government-related securities. Late in the year, U.S. Treasury yields began to rise. Nonetheless, the impact was insufficient to erase gains realized by non-government bonds over the reporting period.

     On an absolute basis, the Fund generated positive returns for the 12-month period. We gradually tempered our risk taking throughout the year and reduced the Fund’s exposure to CCC-rated bonds to position the Fund for principal protection, given fewer opportunities in this segment of the market.

     The main detractor from Fund performance was security selection in communications and financial institutions industries. Within communications, the wireless and media noncable industries were the primary detractors from Fund performance. The Fund’s wireless position was the largest detractor for the year, driven by a holding that was

affected by European sovereign debt problems. Within financial institutions, the Fund was hurt by not holding some of the more aggressive banking securities, as well as by an underweight position in the non-captive diversified and non-captive consumer finance bonds.

     Investments that added to the Fund’s performance varied. The primary contributors to Fund performance were an underweight position in the electric industry and security selection in the automotive industry and the health care sector. Our underweight in the electric industry was beneficial as it was the second lowest-performing industry in the high yield market. Overall, consumer cyclical and consumer noncyclical securities enhanced Fund performance. Within the consumer cyclical asset class, security selection and overweight positions in the automotive and gaming industries were leading contributors to performance, and within consumer noncyclical market segment, security selection and a slight underweight position in the health care sector and the food and beverage industry were the top contributors to performance.

     We remain generally positive in our assessment of high yield securities; however, macroeconomic risks, slow economic growth and the potential for a double-dip recession and current valuations make us cautious about owning riskier assets. We believe the risk of holding those highest risk securities outweighs potential benefits for the Fund at this time.

     Thank you for investing in Invesco V.I. High Yield Fund and for sharing our long-term investment horizon.

1	Bureau of Economic Analysis
2	U.S. Federal Reserve

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Peter Ehret
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. High Yield Fund. Mr. Ehret joined Invesco in 2001. He graduated cum laude with a B.S. in economics from the University of Minnesota. He also earned an M.S. in real estate appraisal and investment analysis from the University of Wisconsin-Madison.

Darren Hughes
Chartered Financial Analyst, senior portfolio manager, is manager of Invesco V.I. High Yield Fund. He joined Invesco in 1992. Mr. Hughes earned a B.B.A. in finance and economics from Baylor University.

Scott Roberts
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. High Yield Fund. He joined Invesco in 2000. Mr. Roberts earned a B.B.A. in finance from the University of Houston.

Invesco V.I. High Yield Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 4/30/98, Fund data from 5/1/98

Past performance cannot guarantee comparable future results.

     The Fund has elected to use the Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index as its style-specific benchmark instead of the Barclays Capital U.S. Corporate High Yield Index because it will better align the Fund’s style-specific benchmark with its investment process and restrictions. Because this is the first annual report

since we have adopted the new index, SEC guidelines require that we compare performance for both the old and the new index.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the

one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (5/1/98)			3.60	%
	10	Years	6.58
	5	Years	7.65
	1	Year	13.57
Series II Shares
	10	Years	6.35	%
	5	Years	7.39
	1	Year	13.49
	Performance includes litigation proceeds. Had these proceeds not been received, total return would have been lower.

Series II shares incepted on March 26, 2002. Performance shown prior to that date is that of Series I shares, restated to reflect the higher 12b-1 fees applicable to Series II. Series I performance reflects any applicable fee waivers or expense reimbursements. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be

lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.95% and 1.20%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.22% and 1.47%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. High Yield Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through

insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco automated information line, 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2012. See current prospectus for more information.

Invesco V.I. High Yield Fund

Invesco V.I. High Yield Fund’s investment objective is total return, comprised of current income and capital appreciation.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

     Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa.

     The issuer of instruments in which the Fund invests may be unable to meet interest and/or principal payments, thereby causing its instruments to decrease in value and lowering the issuer’s credit rating.

     Junk bonds involve a greater risk of default or price changes due to changes in the credit quality of the issuer. The values of junk bonds fluctuate more than those of high-quality bonds in response to company, political, regulatory or economic developments. Values of junk bonds can decline significantly over short periods of time.

     Reinvestment risk is the risk that a bond’s cash flows (coupon income and principal repayment) will be reinvested at an interest rate below that on the original bond.

     The Fund’s foreign investments may be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     Securities issued by foreign companies and governments located in developing countries may be affected more negatively by inflation, devaluation of their currencies, higher transaction costs, delays in settlement, adverse political developments, the introduction of capital controls, withholding taxes, nationalization of private assets, expropriation, social unrest, war or lack of timely information than those in developed countries.

     Leveraging entails risks such as magnifying changes in the value of the portfolio’s securities.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

     The Fund may engage in frequent trading of portfolio securities, which may result in added expenses, lower return and increased tax liability.

About indexes used in this report The Barclays Capital U.S. Aggregate Index is an unmanaged index considered representative of the U.S. investment-grade, fixed-rate bond market.

     The Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index is an unmanaged index that covers U.S. corporate, fixed-rate, non-investment grade debt with at least one year to maturity and at least $150 million in par outstanding. Index weights for each issuer are capped at 2%.

     The Barclays Capital U.S. Corporate High Yield Index is an unmanaged index that covers the universe of fixed-rate, noninvestment-grade debt.

     The Lipper VUF High Current Yield Bond Funds Category Average represents an average of all of the variable insurance underlying funds in the Lipper High Current Yield Bond Funds category.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. High Yield Fund

Schedule of Investments^(a)

December 31, 2010

	Principal
	Amount		Value
U.S. Dollar Denominated Bonds & Notes–83.41%
Advertising–0.20%
Lamar Media Corp., Sr. Gtd. Sub. Global Notes, 7.88%, 04/15/18	$	105,000	$	111,694
Aerospace & Defense–1.70%
Alliant Techsystems Inc., Sr. Unsec. Gtd. Sub. Notes, 6.88%, 09/15/20		20,000		20,650
BE Aerospace, Inc., Sr. Unsec. Notes, 8.50%, 07/01/18		180,000		196,987
Bombardier Inc. (Canada), Sr. Notes, 7.50%, 03/15/18(b)		30,000		32,363
7.75%, 03/15/20(b)		120,000		130,800
Hexcel Corp., Sr. Unsec. Sub. Global Notes, 6.75%, 02/01/15		275,000		281,875
Triumph Group, Inc., Sr. Unsec. Gtd. Sub. Global Notes, 8.00%, 11/15/17		280,000		296,100
				958,775
Airlines–2.86%
American Airlines, Series 1991-A2, Sec. Pass Through Ctfs., 10.18%, 01/02/13		55,161		55,919
Continental Airlines Inc.,
Series 2000-2, Class B, Sec. Sub. Pass Through Ctfs., 8.31%, 04/02/18		59,873		60,921
Series 2001-1, Class B, Sec. Sub. Pass Through Ctfs., 7.37%, 12/15/15		104,683		104,945
Series 2007-1, Class C, Sec. Sub. Global Pass Through Ctfs., 7.34%, 04/19/14		181,265		183,078
Series 2009-1, Class A, Sec. Pass Through Ctfs., 9.00%, 07/08/16		57,575		65,923
Series 2009-2, Class B, Sec. Global Pass Through Ctfs., 9.25%, 05/10/17		132,981		144,284
Delta Air Lines, Inc., Sr. Sec. Notes, 9.50%, 09/15/14(b)		67,000		73,198
Series 2002-1, Class C, Sec. Pass Through Ctfs., 7.78%, 01/02/12		124,468		125,402
Series 2007-1, Class C, Sec. Global Pass Through Ctfs., 8.95%, 08/10/14		134,720		140,782
UAL Corp.,
Series 2007-1, Class B, Sr. Sec. Gtd. Global Pass Through Ctfs., 7.34%, 07/02/19(b)		121,512		116,651
Series 2009-1, Sr. Sec. Gtd. Global Pass Through Ctfs., 10.40%, 11/01/16		174,697		203,085
Series 2009-2A, Sec. Gtd. Global Pass Through Ctfs., 9.75%, 01/15/17		142,759		165,600
Series 2009-2, Class B, Sec. Gtd. Pass Through Ctfs., 12.00%, 01/15/16(b)		150,280		169,065
				1,608,853
Alternative Carriers–0.14%
Global Crossing UK Finance PLC (United Kingdom), Sr. Sec. Gtd. Global Notes, 10.75%, 12/15/14		75,000		78,094
Aluminum–0.81%
Century Aluminum Co., Sr. Sec. Notes, 8.00%, 05/15/14		430,630		455,660
Apparel Retail–0.33%
Limited Brands Inc., Sr. Unsec. Gtd. Global Notes, 8.50%, 06/15/19		140,000		161,000
Sr. Unsec. Gtd. Notes, 7.00%, 05/01/20		25,000		26,563
				187,563
Apparel, Accessories & Luxury Goods–0.98%
Hanesbrands Inc., Sr. Unsec. Gtd. Notes, 6.38%, 12/15/20(b)		140,000		135,100
Phillips-Van Heusen Corp., Sr. Unsec. Notes, 7.38%, 05/15/20		90,000		95,625
Quiksilver Inc., Sr. Unsec. Gtd. Global Notes, 6.88%, 04/15/15		305,000		299,662
Visant Corp., Sr. Notes, 10.00%, 10/01/17(b)		20,000		21,300
				551,687
Asset Management & Custody Banks–0.03%
Accellent Inc., Sr. Gtd. Sub. Notes, 10.00%, 11/01/17(b)		15,000		14,175
Auto Parts & Equipment–0.40%
Allison Transmission Inc., Sr. Unsec. Gtd. Notes, 11.00%, 11/01/15(b)		100,000		109,250
Tenneco Inc., Sr. Gtd. Notes, 6.88%, 12/15/20(b)		40,000		40,800
Sr. Notes, 7.75%, 08/15/18(b)		70,000		74,550
				224,600
Automobile Manufacturers–0.87%
Ford Motor Co., Sr. Unsec. Global Notes, 7.45%, 07/16/31		185,000		199,800
Motors Liquidation Co., Sr. Unsec. Global Notes, 7.20%, 01/15/11(c)		445,000		153,525
Sr. Unsec. Notes, 8.38%, 07/15/33(c)		375,000		136,406
				489,731
Broadcasting–1.56%
Allbritton Communications Co., Sr. Unsec. Global Notes, 8.00%, 05/15/18		150,000		152,250

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Fund

	Principal
	Amount		Value
Broadcasting–(continued)
Nielsen Finance LLC/Co., Sr. Global Notes, 11.63%, 02/01/14	$	85,000	$	98,812
Sr. Unsec. Gtd. Notes, 7.75%, 10/15/18(b)		120,000		124,800
Sr. Unsec. Gtd. Sub. Disc. Global Notes, 12.50%, 08/01/16(d)		475,000		501,125
				876,987
Building Products–3.69%
Associated Materials LLC, Sr. Sec. Gtd. Notes, 9.13%, 11/01/17(b)		200,000		211,000
Building Materials Corp. of America, Sr. Gtd. Notes, 7.50%, 03/15/20(b)		130,000		133,575
Gibraltar Industries Inc., Series B, Sr. Unsec. Gtd. Sub. Global Notes, 8.00%, 12/01/15		200,000		202,750
Nortek Inc., Sr. Sec. Gtd. Global Notes, 11.00%, 12/01/13		355,955		380,872
Sr. Unsec. Gtd. Notes, 10.00%, 12/01/18(b)		120,000		125,700
Ply Gem Industries Inc.,
Sr. Sec. Gtd. First & Second Lien Global Notes,
11.75%, 06/15/13		335,000		359,287
Sr. Unsec. Gtd. Sub. Global Notes,
13.13%, 07/15/14		210,000		223,650
Roofing Supply Group LLC/Roofing Supply Finance Inc., Sr. Sec. Notes, 8.63%, 12/01/17(b)		320,000		333,600
USG Corp., Sr. Gtd. Notes, 8.38%, 10/15/18(b)		15,000		14,775
Sr. Unsec. Gtd. Notes, 9.75%, 08/01/14(b)		85,000		90,313
				2,075,522
Cable & Satellite–1.18%
Cablevision Systems Corp., Sr. Unsec. Global Notes, 8.63%, 09/15/17		135,000		148,331
Hughes Network Systems LLC/HNS Finance Corp., Sr. Unsec. Gtd. Global Notes, 9.50%, 04/15/14		75,000		77,719
9.50%, 04/15/14		205,000		212,431
Sirius XM Radio Inc., Sr. Unsec. Gtd. Notes, 8.75%, 04/01/15(b)		155,000		167,981
XM Satellite Radio Inc., Sr. Unsec. Gtd. Notes, 7.63%, 11/01/18(b)		55,000		57,063
				663,525
Casinos & Gaming–5.14%
Boyd Gaming Corp., Sr. Notes, 9.13%, 12/01/18(b)		20,000		20,000
Caesars Entertainment Operating Co. Inc.,
Sr. Sec. Gtd. Global Notes,
11.25%, 06/01/17		175,000		197,750
10.00%, 12/15/18		50,000		45,750
Sr. Sec. Notes, 12.75%, 04/15/18(b)		120,000		123,600
Sr. Unsec. Gtd. Global Bonds, 5.63%, 06/01/15		275,000		228,937
Great Canadian Gaming Corp. (Canada), Sr. Unsec. Gtd. Sub. Notes, 7.25%, 02/15/15(b)		150,000		154,500
Mandalay Resort Group, Sr. Unsec. Gtd. Sub. Notes, 7.63%, 07/15/13		100,000		95,000
MGM Resorts International, Sr. Sec. Global Notes,
10.38%, 05/15/14		65,000		73,288
11.13%, 11/15/17		65,000		75,238
Sr. Sec. Gtd. Notes,
13.00%, 11/15/13		130,000		154,050
9.00%, 03/15/20(b)		50,000		55,000
Sr. Unsec. Gtd. Conv. Notes, 4.25%, 04/15/15(b)		95,000		104,500
Sr. Unsec. Gtd. Global Notes,
6.75%, 09/01/12		185,000		184,537
6.63%, 07/15/15		223,000		205,717
Sr. Unsec. Gtd. Notes, 5.88%, 02/27/14		10,000		9,275
Midwest Gaming Borrower LLC/ Midwest Finance Corp., Sr. Sec. Notes, 11.63%, 04/15/16(b)		45,000		46,463
Pinnacle Entertainment Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 08/01/17		175,000		191,187
Scientific Games Corp., Sr. Sub. Notes, 8.13%, 09/15/18(b)		20,000		20,250
Scientific Games International Inc., Sr. Unsec. Gtd. Sub. Global Notes, 9.25%, 06/15/19		45,000		46,688
Seneca Gaming Corp., Sr. Unsec. Gtd. Notes, 8.25%, 12/01/18(b)		60,000		60,300
Snoqualmie Entertainment Authority, Sr. Sec. Floating Rate Notes, 4.43%, 02/01/14(b)(e)		225,000		195,750
Sr. Sec. Notes, 9.13%, 02/01/15(b)		220,000		204,600
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., Sec. Gtd. First Mortgage Global Notes, 7.75%, 08/15/20		170,000		185,300
Sr. Sec. Gtd. First Mortgage Global Notes,
7.88%, 11/01/17		130,000		140,400
7.88%, 05/01/20		70,000		75,687
				2,893,767
Coal & Consumable Fuels–0.13%
CONSOL Energy Inc., Sr. Unsec. Gtd. Notes,
8.00%, 04/01/17(b)		35,000		37,538
8.25%, 04/01/20(b)		35,000		37,975
				75,513
Computer & Electronics Retail–0.05%
Rent-A-Center Inc., Sr. Unsec. Notes, 6.63%, 11/15/20(b)		30,000		30,075
Computer Storage & Peripherals–0.26%
Seagate HDD Cayman (Cayman Islands), Sr. Unsec. Gtd. Notes, 7.75%, 12/15/18(b)		60,000		61,275
6.88%, 05/01/20(b)		90,000		86,850
				148,125

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Fund

	Principal
	Amount		Value
Construction & Engineering–1.68%
American Residential Services LLC, Sr. Sec. Notes, 12.00%, 04/15/15(b)	$	95,000	$	99,988
Dycom Investments Inc., Sr. Unsec. Gtd. Sub. Global Notes, 8.13%, 10/15/15		70,000		71,575
MasTec, Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 02/01/17		350,000		356,125
Tutor Perini Corp., Sr. Unsec. Gtd. Notes, 7.63%, 11/01/18(b)		415,000		420,187
				947,875
Construction Materials–1.45%
Cemex Finance LLC, Sr. Sec. Gtd. Bonds, 9.50%, 12/14/16(b)		195,000		201,924
Cemex S.A.B. de C.V., (Mexico), Unsec. Sub. Conv. Notes, 4.88%, 03/15/15(b)		100,000		109,750
Texas Industries Inc., Sr. Unsec. Gtd. Notes, 9.25%, 08/15/20(b)		370,000		394,975
U.S. Concrete, Inc., Sec. Conv. Notes, 9.50%, 08/31/15(b)		95,000		110,438
				817,087
Construction, Farm Machinery & Heavy Trucks–1.80%
Case New Holland Inc., Sr. Notes, 7.88%, 12/01/17(b)		260,000		287,300
CNH America LLC, Sr. Unsec. Gtd. Notes, 7.25%, 01/15/16		60,000		65,100
Manitowoc Co. Inc. (The), Sr. Unsec. Gtd. Notes, 8.50%, 11/01/20		85,000		91,056
Navistar International Corp., Sr. Unsec. Gtd. Notes, 8.25%, 11/01/21		260,000		281,450
Oshkosh Corp., Sr. Unsec. Gtd. Global Notes, 8.50%, 03/01/20		150,000		165,375
Terex Corp., Sr. Unsec. Global Notes, 10.88%, 06/01/16		45,000		51,975
Titan International Inc., Sr. Sec. Gtd. Notes, 7.88%, 10/01/17(b)		65,000		69,063
				1,011,319
Consumer Finance–2.62%
Ally Financial Inc., Sr. Unsec. Gtd. Global Notes,
8.00%, 03/15/20		345,000		379,500
8.00%, 11/01/31		186,000		199,020
Sr. Unsec. Gtd. Notes, 7.50%, 09/15/20(b)		135,000		143,775
Capital One Capital VI, Jr. Ltd. Gtd. Sub. Cum. Trust Pfd. Securities, 8.88%, 05/15/40		205,000		213,969
Ford Motor Credit Co. LLC, Sr. Unsec. Notes, 8.00%, 12/15/16		150,000		168,000
8.13%, 01/15/20		170,000		198,050
National Money Mart Co. (Canada), Sr. Unsec. Gtd. Global Notes, 10.38%, 12/15/16		160,000		174,400
				1,476,714
Data Processing & Outsourced Services–0.31%
SunGard Data Systems Inc., Sr. Unsec. Gtd. Sub. Global Notes,
10.25%, 08/15/15		90,000		94,725
Sr. Unsec. Notes,
7.38%, 11/15/18(b)		40,000		40,400
7.63%, 11/15/20(b)		40,000		40,700
				175,825
Department Stores–0.44%
Sears Holdings Corp., Sr. Sec. Notes, 6.63%, 10/15/18(b)		265,000		250,425
Distillers & Vintners–0.21%
Constellation Brands Inc., Sr. Unsec. Gtd. Global Notes, 7.25%, 05/15/17		110,000		116,600
Diversified Metals & Mining–0.38%
Vedanta Resources PLC (United Kingdom), Sr. Unsec. Notes, 9.50%, 07/18/18(b)		195,000		213,216
Diversified Support Services–0.04%
Mobile Mini, Inc., Sr. Unsec. Gtd. Notes, 7.88%, 12/01/20(b)		20,000		20,850
Drug Retail–0.35%
General Nutrition Centers Inc., Sr. Unsec. Gtd. PIK Floating Rate Global Notes, 5.75%, 03/15/14(e)		200,000		198,000
Electric Utilities–0.70%
Elwood Energy LLC, Sr. Sec. Global Notes, 8.16%, 07/05/26		122,984		120,524
LSP Energy L.P./LSP Batesville Funding Corp., Series C, Sr. Sec. Mortgage Bonds,
7.16%, 01/15/14		86,722		76,575
Series D, Sr. Sec. Bonds, 8.16%, 07/15/25		275,000		199,375
				396,474
Electrical Components & Equipment–0.07%
Polypore International Inc., Sr. Unsec. Gtd. Notes, 7.50%, 11/15/17(b)		40,000		41,200
Electronic Manufacturing Services–0.09%
Jabil Circuit, Inc., Sr. Unsec. Notes, 7.75%, 07/15/16		35,000		39,375
Sanmina-SCI Corp., Sr. Unsec. Gtd. Sub. Global Notes, 6.75%, 03/01/13		10,000		10,025
				49,400
Environmental & Facilities Services–0.17%
EnergySolutions Inc./LLC, Sr. Unsec. Gtd. Notes, 10.75%, 08/15/18(b)		85,000		93,288
Fertilizers & Agricultural Chemicals–0.21%
CF Industries Inc., Sr. Unsec. Gtd. Notes, 7.13%, 05/01/20		110,000		120,725

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Fund

	Principal
	Amount		Value
Food Retail–0.51%
New Albertsons Inc., Sr. Unsec. Bonds, 8.00%, 05/01/31	$	205,000	$	155,031
Simmons Foods Inc., Sr. Sec. Notes, 10.50%, 11/01/17(b)		125,000		134,063
				289,094
Forest Products–0.04%
Sino-Forest Corp. (Canada), Gtd. Notes, 6.25%, 10/21/17(b)		20,000		20,082
Gas Utilities–0.49%
Ferrellgas L.P./Ferrellgas Finance Corp., Sr. Unsec. Notes, 6.50%, 05/01/21(b)		150,000		146,625
Suburban Propane Partners, L.P./Suburban Energy Finance Corp., Sr. Unsec. Notes, 7.38%, 03/15/20		120,000		128,700
				275,325
Health Care Equipment–0.27%
DJO Finance LLC/Corp., Sr. Unsec. Gtd. Global Notes, 10.88%, 11/15/14		140,000		153,300
Health Care Facilities–2.38%
Community Health Systems Inc., Sr. Unsec. Gtd. Global Notes, 8.88%, 07/15/15		250,000		263,750
Hanger Orthopedic Group Inc., Sr. Unsec. Gtd. Global Notes, 7.13%, 11/15/18		40,000		40,100
HCA, Inc., Sr. Sec. Gtd. Global Notes, 7.88%, 02/15/20		195,000		209,625
Sr. Unsec. Global Notes, 6.38%, 01/15/15		245,000		241,937
Sr. Unsec. Notes,
5.75%, 03/15/14		10,000		9,900
7.19%, 11/15/15		155,000		153,062
Health Management Associates Inc., Sr. Sec. Notes, 6.13%, 04/15/16		55,000		55,688
Healthsouth Corp., Sr. Unsec. Gtd. Notes, 7.25%, 10/01/18		15,000		15,338
8.13%, 02/15/20		90,000		97,200
7.75%, 09/15/22		35,000		36,225
Tenet Healthcare Corp., Sr. Unsec. Global Notes, 9.25%, 02/01/15		205,000		219,350
				1,342,175
Health Care Services–0.48%
DaVita Inc., Sr. Unsec. Gtd. Notes, 6.38%, 11/01/18		40,000		39,900
Universal Hospital Services Inc., Sr. Sec. PIK Global Notes, 8.50%, 06/01/15		225,000		232,312
				272,212
Health Care Supplies–0.25%
Alere Inc., Sr. Unsec. Gtd. Sub. Notes, 9.00%, 05/15/16		135,000		139,894
Health Care Technology–0.38%
MedAssets Inc., Sr. Unsec. Gtd. Notes, 8.00%, 11/15/18(b)		210,000		212,100
Homebuilding–0.41%
M/I Homes Inc., Sr. Unsec. Notes, 8.63%, 11/15/18(b)		60,000		60,450
Standard Pacific Corp., Sr. Unsec. Gtd. Notes, 8.38%, 05/15/18(b)		55,000		55,275
TOUSA, Inc., Sr. Unsec. Gtd. Global Notes, 9.00%, 07/01/10(c)		163,000		85,168
9.00%, 07/01/10(c)		60,000		31,350
				232,243
Hotels, Resorts & Cruise Lines–0.81%
Royal Caribbean Cruises Ltd., Sr. Unsec. Global Notes, 6.88%, 12/01/13		40,000		42,800
7.25%, 03/15/18		85,000		91,587
7.50%, 10/15/27		140,000		138,250
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec. Notes, 7.15%, 12/01/19		165,000		181,500
				454,137
Household Products–0.45%
Central Garden and Pet Co., Sr. Gtd. Sub. Notes, 8.25%, 03/01/18		245,000		251,737
Housewares & Specialties–0.54%
Jarden Corp., Sr. Unsec. Gtd. Notes, 6.13%, 11/15/22		15,000		14,381
Yankee Acquisition Corp., Series B, Sr. Gtd. Global Notes, 8.50%, 02/15/15		280,000		291,200
				305,581
Independent Power Producers & Energy Traders–1.33%
AES Corp. (The), Sr. Unsec. Global Notes, 9.75%, 04/15/16		75,000		84,375
8.00%, 10/15/17		65,000		68,738
AES Red Oak LLC, Series A, Sr. Sec. Bonds, 8.54%, 11/30/19		226,060		230,581
NRG Energy, Inc., Sr. Unsec. Gtd. Notes, 7.38%, 02/01/16		120,000		123,000
7.38%, 01/15/17		235,000		240,875
				747,569
Industrial Conglomerates–0.00%
Indalex Holding Corp., Series B, Sr. Sec. Gtd. Global Notes, 11.50%, 02/01/14(c)		230,000		2,013
Industrial Machinery–0.48%
Cleaver-Brooks Inc., Sr. Sec. Notes, 12.25%, 05/01/16(b)		75,000		79,969
Columbus McKinnon Corp., Sr. Unsec. Gtd. Sub. Global Notes, 8.88%, 11/01/13		63,000		64,260

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Fund

	Principal
	Amount		Value
Industrial Machinery–(continued)
Mueller Water Products Inc., Sr. Unsec. Gtd. Global Notes, 8.75%, 09/01/20	$	25,000	$	27,875
SPX Corp., Sr. Unsec. Gtd. Notes, 6.88%, 09/01/17(b)		90,000		96,075
				268,179
Integrated Telecommunication Services–1.74%
Intelsat Intermediate Holding Co. S.A. (Bermuda), Sr. Unsec. Gtd. Disc. Global Notes, 9.50%, 02/01/15		315,000		326,025
Intelsat Jackson Holdings S.A. (Luxembourg), Sr. Unsec. Gtd. Global Notes, 11.25%, 06/15/16		315,000		340,987
Sr. Unsec. Notes, 7.25%, 10/15/20(b)		115,000		116,725
Qwest Communications International Inc., Sr. Unsec. Gtd. Notes, 7.13%, 04/01/18(b)		190,000		196,650
				980,387
Internet Retail–0.81%
Travelport LLC, Sr. Unsec. Gtd. Global Notes, 9.88%, 09/01/14		220,000		215,600
Sr. Unsec. Gtd. Sub. Global Notes,
11.88%, 09/01/16		190,000		187,625
Travelport LLC/Inc., Sr. Unsec. Gtd. Global Notes, 9.00%, 03/01/16		55,000		53,487
				456,712
Internet Software & Services–0.23%
Equinix Inc., Sr. Unsec. Notes, 8.13%, 03/01/18		125,000		131,250
Investment Banking & Brokerage–0.86%
Cantor Fitzgerald L.P., Bonds, 7.88%, 10/15/19(b)		220,000		222,416
E*Trade Financial Corp., Sr. Unsec. Global Notes, 7.38%, 09/15/13		95,000		95,000
Sr. Unsec. Notes, 7.88%, 12/01/15		165,000		164,588
				482,004
Leisure Facilities–0.50%
Universal City Development Partners Ltd./UCDP Finance Inc., Sr. Unsec. Gtd. Global Notes, 8.88%, 11/15/15		265,000		283,550
Leisure Products–0.05%
Toys R Us-Delaware Inc., Sr. Sec. Gtd. Notes, 7.38%, 09/01/16(b)		25,000		26,063
Life Sciences Tools & Services–0.22%
Patheon Inc. (Canada), Sr. Sec. Notes, 8.63%, 04/15/17(b)		125,000		125,313
Marine–0.12%
Stena A.B. (Sweden), Sr. Unsec. Global Notes, 7.00%, 12/01/16		65,000		65,081
Metal & Glass Containers–0.11%
Ball Corp., Sr. Unsec. Gtd. Notes, 5.75%, 05/15/21		65,000		63,375
Movies & Entertainment–1.40%
AMC Entertainment Holdings Inc., Sr. Sub. Notes, 9.75%, 12/01/20(b)		65,000		67,681
AMC Entertainment Inc., Sr. Unsec. Gtd. Global Notes, 8.75%, 06/01/19		50,000		53,500
Sr. Unsec. Gtd. Sub. Global Notes,
8.00%, 03/01/14		275,000		279,125
Cinemark USA Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 06/15/19		95,000		103,313
NAI Entertainment Holdings LLC, Sr. Sec. Notes, 8.25%, 12/15/17(b)		270,000		284,850
				788,469
Multi-Line Insurance–2.24%
American International Group, Inc., Jr. Sub. Variable Rate Global Deb.,
8.18%, 05/15/58(e)		210,000		223,125
Sr. Unsec. Global Notes, 6.40%, 12/15/20		40,000		41,750
Hartford Financial Services Group Inc. (The), Jr. Unsec. Sub. Variable Rate Deb.,
8.13%, 06/15/38(e)		95,000		101,945
Sr. Unsec. Global Notes, 5.95%, 10/15/36		90,000		84,786
Liberty Mutual Group Inc., Jr. Unsec. Gtd. Sub. Bonds, 7.80%, 03/15/37(b)		270,000		267,975
Sr. Unsec. Bonds, 7.50%, 08/15/36(b)		95,000		93,422
Nationwide Mutual Insurance Co., Sub. Notes, 9.38%, 08/15/39(b)		385,000		450,753
				1,263,756
Multi-Sector Holdings–0.18%
Reynolds Group Issuer Inc./LLC, Sr. Sec. Gtd. Notes, 7.13%, 04/15/19(b)		100,000		103,250
Multi-Utilities–0.01%
CMS Energy Corp., Sr. Unsec. Notes, 6.30%, 02/01/12		3,329		3,479
Office Services & Supplies–0.46%
IKON Office Solutions, Inc., Sr. Unsec. Notes, 6.75%, 12/01/25		230,000		221,950
Interface Inc., Sr. Notes, 7.63%, 12/01/18(b)		35,000		36,225
				258,175
Oil & Gas Drilling–0.25%
Precision Drilling Corp. (Canada), Sr. Unsec. Gtd. Notes, 6.63%, 11/15/20(b)		95,000		97,137
Trinidad Drilling Ltd., Sr. Unsec. Notes, 7.88%, 01/15/19(b)		45,000		46,374
				143,511
Oil & Gas Equipment & Services–1.26%
Bristow Group, Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 09/15/17		220,000		231,000
Calfrac Holdings L.P., Sr. Unsec. Notes, 7.50%, 12/01/20(b)		45,000		45,309

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Fund

	Principal
	Amount		Value
Oil & Gas Equipment & Services–(continued)
Compagnie Generale de Geophysique-Veritas (France), Sr. Unsec. Gtd. Global Notes, 7.50%, 05/15/15	$	60,000	$	61,575
Complete Production Services, Inc., Sr. Unsec. Gtd. Global Notes, 8.00%, 12/15/16		110,000		114,400
Key Energy Services Inc., Sr. Unsec. Gtd. Global Notes, 8.38%, 12/01/14		245,000		259,700
				711,984
Oil & Gas Exploration & Production–6.82%
Berry Petroleum Co., Sr. Unsec. Notes, 6.75%, 11/01/20		60,000		60,600
Chaparral Energy Inc., Sr. Unsec. Gtd. Global Notes, 8.50%, 12/01/15		105,000		107,363
8.88%, 02/01/17		155,000		158,488
Chesapeake Energy Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 11/15/20		230,000		233,162
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 7.13%, 05/01/17		160,000		166,600
Concho Resources Inc., Sr. Notes, 7.00%, 01/15/21		40,000		41,200
Continental Resources Inc., Sr. Unsec. Gtd. Global Notes,
8.25%, 10/01/19		80,000		87,800
7.38%, 10/01/20		165,000		174,487
Sr. Unsec. Gtd. Notes, 7.13%, 04/01/21(b)		55,000		58,025
Delta Petroleum Corp., Sr. Unsec. Gtd. Global Notes, 7.00%, 04/01/15		400,000		266,000
Encore Acquisition Co., Sr. Gtd. Sub. Notes, 9.50%, 05/01/16		185,000		206,044
EXCO Resources Inc., Sr. Unsec. Gtd. Notes, 7.50%, 09/15/18		205,000		200,900
Forest Oil Corp., Sr. Unsec. Gtd. Global Notes, 7.25%, 06/15/19		225,000		228,937
Harvest Operations Corp. (Canada), Sr. Unsec. Gtd. Notes, 6.88%, 10/01/17(b)		130,000		134,225
McMoRan Exploration Co., Sr. Unsec. Gtd. Notes, 11.88%, 11/15/14		315,000		349,256
Newfield Exploration Co., Sr. Unsec. Sub. Global Notes, 7.13%, 05/15/18		220,000		232,650
Petrohawk Energy Corp., Sr. Unsec. Gtd. Global Notes, 7.88%, 06/01/15		325,000		339,219
7.25%, 08/15/18		75,000		76,031
Pioneer Natural Resources Co., Sr. Unsec. Notes, 6.65%, 03/15/17		95,000		101,445
Plains Exploration & Production Co., Sr. Unsec. Gtd. Notes, 7.75%, 06/15/15		90,000		94,275
7.63%, 06/01/18		160,000		169,200
8.63%, 10/15/19		100,000		109,750
Range Resources Corp., Sr. Unsec. Gtd. Sub. Notes, 7.50%, 05/15/16		45,000		46,800
7.50%, 10/01/17		105,000		111,038
Whiting Petroleum Corp., Sr. Unsec. Gtd. Sub. Notes, 6.50%, 10/01/18		85,000		86,275
				3,839,770
Oil & Gas Refining & Marketing–1.08%
Tesoro Corp., Sr. Unsec. Gtd. Global Bonds, 6.50%, 06/01/17		120,000		120,750
Sr. Unsec. Gtd. Global Notes, 6.63%, 11/01/15		110,000		112,062
United Refining Co., Series 2, Sr. Unsec. Gtd. Global Notes, 10.50%, 08/15/12		380,000		373,825
				606,637
Oil & Gas Storage & Transportation–2.52%
Copano Energy LLC/Copano Energy Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.13%, 03/01/16		290,000		301,600
Genesis Energy L.P./Genesis Energy Finance Corp., Sr. Unsec. Gtd. Notes, 7.88%, 12/15/18(b)		65,000		64,675
Inergy L.P./Inergy Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.75%, 03/01/15		135,000		144,281
8.25%, 03/01/16		180,000		188,550
MarkWest Energy Partners L.P./MarkWest Energy Finance Corp., Sr. Unsec. Gtd. Notes, 6.75%, 11/01/20		60,000		59,925
Series B, Sr. Unsec. Gtd. Global Notes,
8.75%, 04/15/18		215,000		233,544
Overseas Shipholding Group, Inc., Sr. Unsec. Notes, 8.13%, 03/30/18		180,000		181,350
Regency Energy Partners L.P./Regency Energy Finance Corp., Sr. Unsec. Gtd. Notes, 6.88%, 12/01/18		130,000		132,275
Teekay Corp. (Canada), Sr. Unsec. Global Notes, 8.50%, 01/15/20		105,000		114,844
				1,421,044
Other Diversified Financial Services–1.18%
International Lease Finance Corp., Sr. Sec. Notes,
6.75%, 09/01/16(b)		135,000		142,678
7.13%, 09/01/18(b)		135,000		144,112
Sr. Unsec. Notes,
8.63%, 09/15/15(b)		105,000		113,138
8.75%, 03/15/17(b)		120,000		129,300
8.25%, 12/15/20		70,000		72,625
Series R, Sr. Unsec. Medium-Term Notes,
5.65%, 06/01/14		60,000		59,850
				661,703

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Fund

	Principal
	Amount		Value
Packaged Foods & Meats–0.39%
Chiquita Brands International, Inc., Sr. Unsec. Global Notes, 8.88%, 12/01/15	$	105,000	$	107,494
Del Monte Corp., Sr. Unsec. Gtd. Sub. Global Notes, 7.50%, 10/15/19		30,000		35,175
Dole Food Co. Inc., Sr. Sec. Notes, 8.00%, 10/01/16(b)		60,000		63,600
Smithfield Foods Inc., Series B, Sr. Unsec. Global Notes, 7.75%, 05/15/13		10,000		10,675
				216,944
Paper Packaging–0.16%
Cascades Inc., Sr. Unsec. Gtd. Global Notes, 7.88%, 01/15/20		85,000		87,550
Paper Products–1.50%
Clearwater Paper Corp., Sr. Gtd. Notes, 7.13%, 11/01/18(b)		60,000		62,250
Exopack Holding Corp., Sr. Unsec. Gtd. Global Notes, 11.25%, 02/01/14		210,000		217,875
Mercer International Inc., Sr. Unsec. Notes, 9.50%, 12/01/17(b)		85,000		87,975
Neenah Paper, Inc., Sr. Unsec. Gtd. Global Notes, 7.38%, 11/15/14		179,000		182,580
P.H. Glatfelter Co., Sr. Unsec. Gtd. Global Notes, 7.13%, 05/01/16		10,000		10,353
7.13%, 05/01/16		90,000		93,182
PE Paper Escrow GmbH (Austria), Sr. Sec. Gtd. Notes, 12.00%, 08/01/14(b)		100,000		117,500
Sappi Papier Holding AG (Austria), Unsec. Gtd. Unsub. Notes, 6.75%, 06/15/12(b)		75,000		75,082
				846,797
Personal Products–0.16%
NBTY Inc., Sr. Gtd. Notes, 9.00%, 10/01/18(b)		55,000		58,712
Sabra Health Care L.P./Sabra Capital Corp., Sr. Gtd. Notes, 8.13%, 11/01/18(b)		30,000		31,088
				89,800
Pharmaceuticals–0.46%
Elan Finance PLC/Corp. (Ireland), Sr. Unsec. Gtd. Global Notes, 8.75%, 10/15/16		105,000		106,837
Endo Pharmaceuticals Holdings Inc., Sr. Unsec. Gtd. Notes, 7.00%, 12/15/20(b)		30,000		30,750
Mylan Inc., Sr. Unsec. Gtd. Notes, 6.00%, 11/15/18(b)		85,000		83,938
Valeant Pharmaceuticals International, Sr. Unsec. Gtd. Notes, 6.75%, 10/01/17(b)		20,000		19,950
7.00%, 10/01/20(b)		20,000		19,800
				261,275
Property & Casualty Insurance–0.61%
Crum & Forster Holdings Corp., Sr. Unsec. Global Notes, 7.75%, 05/01/17		210,000		220,500
XL Group PLC (Ireland), Series E, Jr. Sub. Variable Rate Global Pfd. Bonds, 6.50%(e)(f)		140,000		121,100
				341,600
Publishing–0.84%
Gannett Co. Inc., Sr. Unsec. Gtd. Global Notes, 8.75%, 11/15/14		90,000		101,025
9.38%, 11/15/17		310,000		345,650
MediMedia USA Inc., Sr. Sub. Notes, 11.38%, 11/15/14(b)		30,000		26,025
				472,700
Railroads–0.44%
Kansas City Southern de Mexico S.A. de C.V. (Mexico), Sr. Unsec. Global Notes, 8.00%, 02/01/18		230,000		248,168
Real Estate Services–0.24%
CB Richard Ellis Services Inc., Sr. Unsec. Gtd. Notes, 6.63%, 10/15/20(b)		135,000		135,506
Regional Banks–1.31%
Regions Financial Corp., Unsec. Sub. Notes, 7.38%, 12/10/37		245,000		230,300
Susquehanna Capital II, Jr. Ltd. Gtd. Sub. Notes, 11.00%, 03/23/40		175,000		191,318
Zions Bancorp., Sr. Unsec. Notes, 7.75%, 09/23/14		200,000		208,300
Unsec. Sub. Notes, 5.50%, 11/16/15		110,000		107,250
				737,168
Research & Consulting Services–0.14%
FTI Consulting Inc., Sr. Gtd. Notes, 6.75%, 10/01/20(b)		80,000		79,800
Restaurants–0.05%
Dunkin Finance Corp., Sr. Notes, 9.63%, 12/01/18(b)		25,000		25,500
Semiconductor Equipment–0.25%
Amkor Technology Inc., Sr. Unsec. Global Notes, 7.38%, 05/01/18		135,000		140,738
Semiconductors–1.50%
Advanced Micro Devices Inc., Sr. Unsec. Notes, 7.75%, 08/01/20(b)		45,000		46,800
Freescale Semiconductor Inc., Sr. Sec. Gtd. Notes, 9.25%, 04/15/18(b)		55,000		60,775
Sr. Unsec. Gtd. Global Notes, 8.88%, 12/15/14		230,000		241,500
Sr. Unsec. Gtd. Notes, 10.75%, 08/01/20(b)		250,000		274,375
NXP BV/NXP Funding LLC (Netherlands), Sr. Sec. Gtd. Global Notes, 7.88%, 10/15/14		209,000		218,666
				842,116

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Fund

	Principal
	Amount		Value
Specialized Finance–1.78%
CIT Group Inc., Sr. Sec. Bonds, 7.00%, 05/01/14	$	430,000	$	434,300
7.00%, 05/01/17		565,000		567,825
				1,002,125
Specialized REIT’s–0.41%
Host Hotels & Resorts Inc., Sr. Gtd. Notes, 6.00%, 11/01/20(b)		130,000		128,050
Host Hotels & Resorts L.P., Sr. Unsec. Gtd. Global Notes, 7.13%, 11/01/13		3,898		3,976
Omega Healthcare Investors Inc., Sr. Unsec. Gtd. Notes, 6.75%, 10/15/22(b)		100,000		99,250
				231,276
Specialty Chemicals–1.21%
Ferro Corp., Sr. Unsec. Notes, 7.88%, 08/15/18		165,000		174,487
Huntsman International LLC, Sr. Unsec. Gtd. Sub. Global Notes, 7.38%, 01/01/15		84,000		86,310
Nalco Co., Sr. Notes, 6.63%, 01/15/19(b)		40,000		41,000
NewMarket Corp., Sr. Unsec. Gtd. Global Notes, 7.13%, 12/15/16		150,000		153,375
PolyOne Corp., Sr. Unsec. Notes, 7.38%, 09/15/20		215,000		223,600
				678,772
Specialty Stores–0.08%
Michaels Stores Inc., Sr. Notes, 7.75%, 11/01/18(b)		45,000		44,888
Steel–1.19%
AK Steel Corp., Sr. Unsec. Gtd. Notes, 7.63%, 05/15/20		175,000		176,750
FMG Resources Ltd. (Australia), Sr. Notes, 6.38%, 02/01/16(b)		110,000		110,318
Metals USA, Inc., Sr. Sec. Gtd. Global Notes, 11.13%, 12/01/15		195,000		205,969
Steel Dynamics Inc., Sr. Unsec. Gtd. Global Notes, 7.75%, 04/15/16		50,000		53,000
United States Steel Corp., Sr. Unsec. Notes, 7.00%, 02/01/18		90,000		90,900
7.38%, 04/01/20		30,000		30,600
				667,537
Systems Software–0.65%
Allen Systems Group Inc., Sr. Sec. Notes, 10.50%, 11/15/16(b)		355,000		363,875
Tires & Rubber–0.60%
Cooper Tire & Rubber Co., Sr. Unsec. Notes, 8.00%, 12/15/19		185,000		189,625
7.63%, 03/15/27		155,000		145,700
				335,325
Trading Companies & Distributors–1.98%
Ashtead Capital Inc., Sr. Sec. Gtd. Notes, 9.00%, 08/15/16(b)		250,000		261,875
Avis Budget Car Rental LLC/Avis Budget Finance Inc., Sr. Unsec. Gtd. Notes, 8.25%, 01/15/19(b)		265,000		268,312
H&E Equipment Services Inc., Sr. Unsec. Gtd. Global Notes, 8.38%, 07/15/16		305,000		312,625
Hertz Corp. (The), Sr. Unsec. Gtd. Notes,
7.50%, 10/15/18(b)		110,000		115,225
7.38%, 01/15/21(b)		65,000		66,625
Sr. Unsec. Gtd. Global Notes, 8.88%, 01/01/14		6,569		6,717
Sunstate Equipment Co., LLC, Sr. Unsec. Notes, 10.50%, 04/01/13 (Acquired 01/13/10-01/21/10; Cost $79,300)(b)		90,000		83,475
				1,114,854
Wireless Telecommunication Services–5.75%
Clearwire Communications LLC/Clearwire Finance Inc., Sr. Sec. Gtd. Notes, 12.00%, 12/01/15(b)		385,000		417,725
Sr. Unsec. Gtd. Conv. Putable Notes,
8.25%, 12/01/17(b)		60,000		61,200
Cricket Communications, Inc., Sr. Sec. Gtd. Global Notes, 7.75%, 05/15/16		110,000		114,813
Sr. Unsec. Gtd. Global Notes, 10.00%, 07/15/15		70,000		75,600
Sr. Unsec. Gtd. Notes, 7.75%, 10/15/20(b)		180,000		172,800
Digicel Group Ltd. (Bermuda), Sr. Unsec. Notes, 8.88%, 01/15/15(b)		145,000		147,356
Digicel Ltd. (Bermuda), Sr. Notes, 8.25%, 09/01/17(b)		155,000		161,587
Sr. Unsec. Notes, 12.00%, 04/01/14(b)		110,000		128,700
MetroPCS Wireless Inc., Sr. Unsec. Gtd. Notes, 7.88%, 09/01/18		125,000		129,453
6.63%, 11/15/20		90,000		85,950
SBA Telecommunications Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 08/15/19		155,000		169,725
Sprint Capital Corp., Sr. Unsec. Gtd. Global Notes, 6.90%, 05/01/19		150,000		149,813
6.88%, 11/15/28		230,000		201,537
Sprint Nextel Corp., Sr. Unsec. Notes, 8.38%, 08/15/17		560,000		597,800
Wind Acquisition Finance S.A. (Luxembourg), Sr. Sec. Gtd. Notes, 7.25%, 02/15/18(b)		200,000		204,000
Sr. Sec. Gtd. Sub. Notes, 11.75%, 07/15/17(b)		375,000		421,875
				3,239,934
Total U.S. Dollar Denominated Bonds & Notes (Cost $43,994,186)				46,958,746

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Fund

	Principal
	Amount		Value
Non-U.S. Dollar Denominated Bonds & Notes–8.31%(g)
Canada–0.18%
Gateway Casinos & Entertainment Ltd., Sr. Sec. Gtd. Notes, 8.88%, 11/15/17(b)	CAD	95,000	$	98,472
Croatia–0.33%
Agrokor, Sr. Unsec. Gtd. Medium-Term Euro Notes, 10.00%, 12/07/16	EUR	130,000		186,860
Czech Republic–0.16%
CET 21 spol sro, Sr. Sec. Notes, 9.00%, 11/01/17(b)	EUR	65,000		89,953
Germany–0.26%
Hapag-Lloyd AG, Sr. Gtd. Notes, 9.00%, 10/15/15(b)	EUR	100,000		143,404
Ireland–0.85%
Ardagh Packaging Finance PLC, Sr. Gtd. Notes, 9.25%, 10/15/20(b)	EUR	200,000		275,442
Bord Gais Eireann, Sr. Unsec. Medium-Term Euro Notes, 5.75%, 06/16/14	EUR	160,000		202,798
				478,240
Luxembourg–2.46%
Boardriders S.A., Sr. Notes, 8.88%, 12/15/17(b)	EUR	100,000		140,396
Calcipar S.A., REGS, Sr. Unsec. Gtd. Floating Rate Euro Notes, 2.09%, 07/01/14(b)(e)	EUR	185,000		228,811
Cirsa Funding Luxembourg S.A., Sr. Unsec. Gtd. Notes, 8.75%, 05/15/18(b)	EUR	50,000		68,861
Codere Finance Luxembourg S.A., Sr. Sec. Gtd. Notes, 8.25%, 06/15/15(b)	EUR	100,000		133,710
ConvaTec Healthcare S.A.,
REGS, Sr. Sec. Euro Notes, 7.38%, 12/15/17(b)	EUR	100,000		136,050
Sr. Unsec. Euro Notes, 10.88%, 12/15/18(b)	EUR	100,000		134,552
Hellas Telecommunications Luxembourg V, REGS, Sr. Sec. Gtd. Floating Rate Euro Bonds, 4.84%, 10/15/12(b)(c)(e)	EUR	465,902		140,165
TMD Friction Finance S.A., REGS, Sr. Sec. Gtd. Euro Notes, 10.75%, 05/15/17(b)	EUR	195,000		267,227
Wind Acquisition Finance S.A., Sr. Sec. Gtd. Notes, 7.38%, 02/15/18(b)	EUR	100,000		134,713
				1,384,485
Netherlands–1.71%
Boats Investments B.V., Sec. PIK Medium-Term Euro Notes, 11.00%, 03/31/17	EUR	73,050		84,978
Carlson Wagonlit B.V., Sr. Gtd. Floating Rate Notes, 6.80%, 05/01/15(b)(e)	EUR	240,000		309,672
EN Germany Holdings B.V., REGS, Sr. Sec. Gtd. Euro Notes, 10.75%, 11/15/15(b)	EUR	100,000		137,592
Polish Television Holding B.V., REGS, Sr. Sec. Medium-Term Euro Notes, 11.25%, 05/15/17(b)	EUR	60,000		83,383
Ziggo Bond Co. B.V., Sr. Sec. Gtd. Notes, 8.00%, 05/15/18(b)	EUR	250,000		345,975
				961,600
Spain–0.11%
Inaer Aviation Finance Ltd., Sr. Sec. Bonds, 9.50%, 08/01/17(b)	EUR	50,000		64,181
Sweden–0.13%
TVN Finance Corp. II A.B., REGS, Sr. Unsec. Gtd. Euro Notes, 10.75%, 11/15/17(b)	EUR	50,000		73,875
United Kingdom–1.88%
Avis Finance Co. PLC, Sr. Unsec. Gtd. Floating Rate Euro Bonds, 3.67%, 07/31/13(e)	EUR	110,000		142,669
EC Finance PLC, Sr. Sec. Gtd. Bonds, 9.75%, 08/01/17(b)	EUR	50,000		72,538
Infinis PLC, Sr. Notes, 9.13%, 12/15/14(b)	GBP	80,000		132,271
ITV PLC, Series 2005-1, Unsec. Gtd. Unsub. Medium-Term
Euro Notes, 5.38%, 10/19/15	GBP	50,000		76,040
Series 2006-1 Tranche 1, Unsec. Gtd. Unsub.
Medium-Term Euro Notes, 7.38%, 01/05/17	GBP	50,000		79,940
Kerling PLC, Sr. Sec. Gtd. Notes, 10.63%, 02/01/17(b)	EUR	80,000		116,060
Pipe Holdings PLC, REGS, Sr. Sec. Euro Bonds, 9.50%, 11/01/15(b)	GBP	100,000		159,489
R&R Ice Cream Ltd., Sr. Sec. Notes, 8.38%, 11/15/17(b)	EUR	200,000		280,798
				1,059,805
United States–0.24%
Hertz Corp. (The), Sr. Unsec. Gtd. Global Notes, 7.88%, 01/01/14	EUR	100,000		135,716
Total Non-U.S. Dollar Denominated Bonds & Notes (Cost $4,748,706)				4,676,591
	Shares
Preferred Stocks–1.10%
Automobile Manufacturers–0.24%
General Motors Co., Series B, $2.38 Conv. Pfd.		2,560		138,522
Diversified Banks–0.57%
Ally Financial, Inc., Series G, 7.00%–Pfd.(b)		340		321,353
Other Diversified Financial Services–0.29%
Citigroup Capital XIII, 7.88% Variable Rate Pfd.(e)		6,035		162,109
Total Preferred Stocks (Cost $470,970)				621,984

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Fund

	Shares		Value
Common Stocks & Other Equity Interests–0.73%
Broadcasting–0.03%
Adelphia Communications Corp.(h)		—	$	3,280
Adelphia Recovery Trust, Series ACC-1(h)		318,570		3,186
Adelphia Recovery Trust, Series ARAHOVA(h)		109,170		10,917
				17,383
Building Products–0.02%
Nortek, Inc.(i)		215		7,740
Construction Materials–0.28%
U.S. Concrete, Inc.(i)		20,786		159,221
Integrated Telecommunication Services–0.39%
Hawaiian Telcom Holdco Inc.–Wts., expiring 10/28/15(i)		1,527		6,108
Wind Hellas Telecommunications S.A.–Class B (Luxembourg)(i)		158,069		211,354
				217,462
Publishing–0.00%
Reader’s Digest Association Inc. (The), Wts., expiring 02/19/14(i)		669		—
Semiconductors–0.01%
MagnaChip Semiconductor LLC		10,979		7,114
Total Common Stocks & Other Equity Interests (Cost $1,226,810)				408,920
	Principal
	Amount		Value
Bundled Security–0.30%
Investment Banking & Brokerage–0.30%
Targeted Return Index Securities Trust, Series HY 2006-1, Sec. Variable Rate Bonds, 7.12%, 05/01/16 (Acquired 08/15/08; Cost $160,650) (Cost $162,949)(b)(e)	$	170,000	$	170,092
Senior Secured Floating Rate Interest Loans–0.11%
Airlines–0.11%
Evergreen International Aviation, Inc., Sr. Gtd. Floating Rate First Lien Term Loans, 9.00%, 10/31/11 (Cost $63,442)(e)		63,442		63,026
	Shares
Money Market Funds–3.26%
Liquid Assets Portfolio–Institutional Class(j)		917,684		917,684
Premier Portfolio–Institutional Class(j)		917,684		917,684
Total Money Market Funds (Cost $1,835,368)				1,835,368
TOTAL INVESTMENTS–97.22% (Cost $52,502,431)				54,734,727
OTHER ASSETS LESS LIABILITIES–2.78%				1,564,815
NET ASSETS–100.00%			$	56,299,542

Investment Abbreviations:

CAD	– Canadian Dollar
Conv.	– Convertible
Ctfs.	– Certificates
Cum	– Cumulative
Deb.	– Debentures
Disc.	– Discounted
EUR	– Euro
GBP	– British Pound
Gtd.	– Guaranteed
Jr.	– Junior
Ltd.	– Limited
Pfd.	– Preferred
PIK	– Payment in Kind
REGS	– Regulation S
REIT	– Real Estate Investment Trust
Sec.	– Secured
Sr.	– Senior
Sub.	– Subordinated
Unsec.	– Unsecured
Unsub.	– Unsubordinated
Wts.	– Warrants

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2010 was $18,579,746, which represented 33.00% of the Fund’s Net Assets.
(c)	Defaulted security. Currently, the issuer is partially or fully in default with respect to interest payments. The aggregate value of these securities at December 31, 2010 was $548,627, which represented 0.97% of the Fund’s Net Assets.
(d)	Step coupon bond issued at discount. The interest rate represents the coupon rate at which the bond will accrue at a specified future date.
(e)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2010.
(f)	Perpetual bond with no specified maturity date.
(g)	Foreign denominated security. Principal amount is denominated in currency indicated.
(h)	Non-income producing security acquired as part of the Adelphia Communications bankruptcy reorganization.
(i)	Non-income producing security.
(j)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $50,667,063)	$	52,899,359
Investments in affiliated money market funds, at value and cost		1,835,368
Total investments, at value (Cost $52,502,431)		54,734,727
Receivable for:
Investments sold		264,033
Fund shares sold		429,176
Dividends and interest		1,003,937
Foreign currency contracts outstanding		169,639
Investment for trustee deferred compensation and retirement plans		32,485
Total assets		56,633,997
Liabilities:
Payable for:
Investments purchased		173,006
Fund shares reacquired		1,438
Amount due custodian		5,069
Accrued fees to affiliates		76,583
Accrued other operating expenses		39,717
Trustee deferred compensation and retirement plans		38,642
Total liabilities		334,455
Net assets applicable to shares outstanding	$	56,299,542
Net assets consist of:
Shares of beneficial interest	$	55,240,044
Undistributed net investment income		4,198,259
Undistributed net realized gain (loss)		(5,540,518	)
Unrealized appreciation		2,401,757
	$	56,299,542
Net Assets:
Series I	$	55,802,550
Series II	$	496,992
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		10,429,292
Series II		92,918
Series I:
Net asset value per share	$	5.35
Series II:
Net asset value per share	$	5.35

Statement of Operations

For the year ended December 31, 2010

Investment income:
Interest (net of foreign withholding taxes of $278)	$	4,940,047
Dividends		33,962
Dividends from affiliated money market funds (includes securities lending income of $5,295)		6,470
Total investment income		4,980,479
Expenses:
Advisory fees		346,698
Administrative services fees		182,873
Custodian fees		21,541
Distribution fees–Series II		1,100
Transfer agent fees		14,025
Trustees’ and officers’ fees and benefits		17,584
Professional services fees		42,660
Other		22,481
Total expenses		648,962
Less: Fees waived		(124,628	)
Net expenses		524,334
Net investment income		4,456,145
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		3,413,005
Foreign currencies		(21,708	)
Foreign currency contracts		145,357
		3,536,654
Change in net unrealized appreciation (depreciation) of:
Investment securities		(1,076,953	)
Foreign currencies		1,400
Foreign currency contracts		97,585
		(977,968	)
Net realized and unrealized gain		2,558,686
Net increase in net assets resulting from operations	$	7,014,831

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	4,456,145		$	5,270,463
Net realized gain (loss)		3,536,654			(16,824	)
Change in net unrealized appreciation (depreciation)		(977,968	)		17,080,223
Net increase in net assets resulting from operations		7,014,831			22,333,862
Distributions to shareholders from net investment income:
Series I		(5,284,452	)		(4,425,953	)
Series II		(38,411	)		(35,151	)
Total distributions from net investment income		(5,322,863	)		(4,461,104	)
Share transactions–net:
Series I		(6,523,411	)		3,004,710
Series II		17,659			(55,854	)
Net increase (decrease) in net assets resulting from share transactions		(6,505,752	)		2,948,856
Net increase (decrease) in net assets		(4,813,784	)		20,821,614
Net assets:
Beginning of year		61,113,326			40,291,712
End of year (includes undistributed net investment income of $4,198,259 and $5,286,704, respectively)	$	56,299,542		$	61,113,326

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. High Yield Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is total return, comprised of current income and capital appreciation.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Senior secured floating rate loans and senior secured floating rate debt securities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may reflect appropriate factors such as ratings, tranche type, industry, company performance, spread, individual trading characteristics, institution-size trading in similar groups of securities and other market data.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean

Invesco V.I. High Yield Fund

	between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.

Invesco V.I. High Yield Fund

F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Lower-Rated Securities — The Fund normally invests at least 80% of its net assets in lower-quality debt securities, i.e., “junk bonds”. Investments in lower-rated securities or unrated securities of comparable quality tend to be more sensitive to economic conditions than higher rated securities. Junk bonds involve a greater risk of default by the issuer because such securities are generally unsecured and are often subordinated to other creditors’ claims.
J.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
K.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
L.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

Invesco V.I. High Yield Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $200 million		0	.625%
Next $300 million		0	.55%
Next $500 million		0	.50%
Over $1 billion		0	.45%

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, 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 Series I shares to 0.95% and Series II shares to 1.20% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $124,628.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $132,873 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.

Invesco V.I. High Yield Fund

  Level 3 — Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	2,161,062	$	483,462	$	221,748	$	2,866,272
Corporate Debt Securities		—		51,868,455		—		51,868,455
	$	2,161,062	$	52,351,917	$	221,748	$	54,734,727
Foreign Currency Contracts*		—		169,639		—		169,639
Total Investments	$	2,161,062	$	52,521,556	$	221,748	$	54,904,366

*  Unrealized appreciation.

NOTE 4—Derivative Investments

The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Value of Derivative Instruments at Period-End

The table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2010:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Currency risk
Foreign Currency Contracts(a)	$	169,639	$	—

^(a) Values are disclosed on the Statement of Assets and Liabilities under the Foreign currency contracts outstanding.

Effect of Derivative Instruments for the year ended December 31, 2010

The table below summarizes the gains on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain on
	Statement of Operations
	Foreign Currency Contracts*
Realized Gain
Currency risk	$	145,357
Change in Unrealized Appreciation
Currency risk		97,585
Total	$	242,942

*  The average value of foreign currency contracts outstanding during the period was $2,119,481.

Open Foreign Currency Contracts
Settlement		Contract to						Unrealized
Date	Counterparty	Deliver		Receive		Value		Appreciation
02/09/11	RBC Dain Rauscher	EUR	2,510,000	USD	3,521,615	$	3,355,756	$	165,859
02/09/11	RBC Dain Rauscher	EUR	230,000	USD	311,279		307,499		3,780
Total open foreign currency contracts								$	169,639

Currency Abbreviations:
EUR	– Euro
USD	– U.S. Dollar

Invesco V.I. High Yield Fund

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $2,615 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund may borrow for leveraging in an amount up to 5% of the Fund’s total assets (excluding the amount borrowed) at the time the borrowing is made. In doing so, the Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate. A Fund may not purchase additional securities when any borrowings from banks exceeds 5% of the Fund’s total assets.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Distributions to Shareholders:

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	5,322,863	$	4,461,104

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	4,263,103
Net unrealized appreciation — investments		1,905,236
Net unrealized appreciation (depreciation) — other investments		(178	)
Temporary book/tax differences		(35,114	)
Post-October deferrals		(29,731	)
Capital loss carryforward		(5,043,818	)
Shares of beneficial interest		55,240,044
Total net assets	$	56,299,542

  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 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 utilized $3,585,252 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	3,209,400
December 31, 2017		1,834,418
Total capital loss carryforward	$	5,043,818

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

Invesco V.I. High Yield Fund

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $55,246,430 and $65,325,730, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	3,881,731
Aggregate unrealized (depreciation) of investment securities		(1,976,495	)
Net unrealized appreciation of investment securities	$	1,905,236
Cost of investments for tax purposes is $52,829,491.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforward, on December 31, 2010, undistributed net investment income was decreased by $221,727, undistributed net realized gain (loss) was increased by $6,861,500 and shares of beneficial interest decreased by $6,639,773. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Years ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		4,999,888		$	26,982,826			9,049,093		$	37,158,640
Series II		16,305			86,476			49			222
Issued as reinvestment of dividends:
Series I		1,018,199			5,284,452			862,759			4,425,953
Series II		7,401			38,411			6,852			35,151
Reacquired:
Series I		(7,205,545	)		(38,790,689	)		(9,123,929	)		(38,579,883	)
Series II		(19,746	)		(107,228	)		(19,361	)		(91,227	)
Net increase (decrease) in share activity		(1,183,498	)	$	(6,505,752	)		775,463		$	2,948,856

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 72% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. High Yield Fund

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																					Ratio of			Ratio of
					Net gains																expenses			expenses
					(losses)																to average			to average net			Ratio of net
	Net asset				on securities						Dividends										net assets			assets without			investment
	value,		Net		(both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	5.22	$	0.43	$	0.26		$	0.69		$	(0.56	)	$	5.35		13.57	%	$	55,803		0.95	%(d)		1.17	%(d)		8.04	%(d)		102	%
Year ended 12/31/09		3.69		0.47		1.47			1.94			(0.41	)		5.22		52.79			60,649		0.95			1.22			10.29			125
Year ended 12/31/08		5.74		0.49		(2.00	)		(1.51	)		(0.54	)		3.69		(25.69	)		39,918		0.95			1.22			9.19			85
Year ended 12/31/07		6.12		0.46		(0.38	)		0.08			(0.46	)		5.74		1.24			51,225		0.96			1.15			7.42			113
Year ended 12/31/06		6.03		0.45		0.19			0.64			(0.55	)		6.12		10.74			58,336		0.96			1.18			7.22			135
Series II
Year ended 12/31/10		5.22		0.42		0.26			0.68			(0.55	)		5.35		13.27			497		1.20	(d)		1.42	(d)		7.79	(d)		102
Year ended 12/31/09		3.68		0.46		1.48			1.94			(0.40	)		5.22		52.77			464		1.20			1.47			10.04			125
Year ended 12/31/08		5.72		0.47		(1.99	)		(1.52	)		(0.52	)		3.68		(26.00	)		374		1.20			1.47			8.94			85
Year ended 12/31/07		6.09		0.44		(0.38	)		0.06			(0.43	)		5.72		1.01			666		1.21			1.40			7.17			113
Year ended 12/31/06		6.00		0.43		0.19			0.62			(0.53	)		6.09		10.41			919		1.21			1.43			6.97			135

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s) of $55,032 and $440 for Series I and Series II shares, respectively.

NOTE 12—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would acquire all of the assets and liabilities of Invesco Van Kampen V.I. High Yield Fund (the “Target Fund”) in exchange for shares of the Fund. The Agreement requires approval of the Target Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

Invesco V.I. High Yield Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. High Yield Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. High Yield Fund, (formerly known as AIM V.I. High Yield Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. High Yield Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,095.80	$	5.02	$	1,020.42	$	4.84		0.95	%
Series II		1,000.00		1,094.90		6.34		1,019.16		6.11		1.20

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. High Yield 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	0.88%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. High Yield Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. International Growth Fund

Annual Report to Shareholders • December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VIIGR-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2010, all share classes of Invesco V.I. International Growth Fund delivered double-digit gains, outperforming its style-specific benchmark, the MSCI EAFE Growth Index. The Fund’s allocations in the Asia/Pacific region provided the largest contribution to performance. The Fund’s exposure to strong-performing emerging market stocks, a segment of the market not represented in the MSCI EAFE Growth Index, also enhanced relative returns.

     The Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	12.86	%
Series II Shares	12.61
MSCI EAFE Index▼ (Broad Market Index)	7.75
MSCI EAFE Growth Index▼ (Style-Specific Index)	12.25
Lipper VUF International Growth Funds Index▼ (Peer Group Index)	14.25

^▼ Lipper Inc.

How we invest

When selecting stocks for your Fund, we employ a disciplined investment strategy that emphasizes fundamental research, supported by both quantitative analysis and portfolio construction techniques. Our EQV (earnings, quality, valuation) strategy focuses primarily on identifying quality companies that have experienced, or exhibit the potential for, accelerated or above-average earnings growth, but their stock prices have not fully reflected these attributes.

     While research responsibilities within the portfolio management team are focused by geographic region, we select investments for the Fund using a bottom-up investment approach, which means we construct the Fund primarily on a stock-by-stock basis. We focus on the strengths of individual companies rather than sectors, countries or market-cap trends.

     We believe disciplined sell decisions are key to successful investing. We consider selling a stock for one of the following reasons:

n	A company’s fundamentals deteriorate, or it posts disappointing earnings.
n	A stock’s price seems overvalued.
n	A more attractive opportunity becomes available.

Market conditions and your Fund

After rallying for much of 2009 on prospects of improving global economic conditions, global equity markets faced headwinds in early 2010. Notably, several southern European economies, including Greece, Spain, Portugal and Italy, faced solvency concerns amid massive fiscal deficits. Although the U.S. economy expanded in 2010, investors continued to be concerned about high unemployment and a still-weak housing market. However, equity markets seemed to shrug off some of the macroeconomic burdens that pulled them into double-digit losses in the first half of 2010, ending the year with strong gains.

     Looking at Asian markets, the message was pretty simple — growth fundamentals remained stronger here than in the West.

And, although we saw marginal differences in stock valuations, with slight premiums in some areas, it was nothing overly concerning, in our opinion.

     Emerging markets, the biggest winners in 2010, saw exports slow during the latter half of the reporting period. The deceleration in exports was offset, however, by strong growth in retail and auto sales, as well as strong housing markets within emerging economies. The key drivers for growth in domestic demand were low interest rates and underleveraged consumers.

     Turning to Europe, the European Central Bank (ECB) remained an interesting foil to the U.S. Federal Reserve (the Fed), as ECB officials showed little sign they were willing to provide additional economic stimulus. Instead, they seemed to be leaving the heavy global economic lifting to the Fed. As a result, we saw the slide in the euro’s value reverse during the first half of 2010. After June, the euro appreciated by double digits versus the dollar, which sparked numerous headlines downplaying growth prospects for the eurozone economy. Nevertheless, Europe’s solid performance during a period of marked volatility served as a useful reminder that, in general, when people focus disproportionately on macroeconomic or gross domestic product (GDP) trends in a market, stocks, when they move contrary to common wisdom, can surprise investors.

     In this environment, we continued to construct the Fund’s portfolio on a bottom-up basis, selecting stocks on an individual basis. Meaningful outperformance versus the MSCI EAFE Growth Index came from the health care, financials and consumer discretionary sectors.

     In the health care sector, strong stock selection in the pharmaceuticals industry led to outperformance versus the index’s

Portfolio Composition

By sector

Consumer Discretionary	17.7	%
Health Care	13.7
Consumer Staples	13.2
Energy	10.5
Industrials	10.0
Financials	9.5
Information Technology	7.9
Telecommunication Services	5.7
Materials	3.1
Utilities	3.0
Money Market Funds Plus
Other Assets Less Liabilities	5.7

Top 10 Equity Holdings*

1.	Nidec Corp.	2.2	%
2.	Nestle S.A.	2.1
3.	Roche Holding AG	2.0
4.	Teva Pharmaceutical Industries Ltd.	2.0
5.	BHP Billiton Ltd.	2.0
6.	America Movil,
	S.A. B. de C.V.— Series L-ADR	1.9
7.	Shire PLC	1.8
8.	Imperial Tobacco Group PLC	1.8
9.	Compass Group PLC	1.8
10.	Novo Nordisk A.S.- Class B	1.8

Top Five Industries

1.	Pharmaceuticals	10.1	%
2.	Integrated Oil & Gas	7.0
3.	Diversified Banks	6.0
4.	Wireless Telecommunication Services	4.3
5.	Packaged Foods & Meats	4.0

Total Net Assets	$1.2 billion
Total Number of Holdings*		86

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.

Invesco V.I. International Growth Fund

health care component. Top contributors to Fund performance included Denmark-based Novo Nordisk, a leading insulin and diabetes care company, and global biopharmaceutical company SHIRE (United Kingdom). In the consumer discretionary sector, particular strength was seen in the media, specialty retail and automobile industries. Top stock-level contributors to Fund performance included the world’s largest media company catering to a Spanish-speaking audience, Grupo Televisia of Mexico, Europe’s leading home improvement retailer, U.K.-based Kingfisher, and German auto manufacturer BMW.

     In the financials sector, a meaningful underweight position versus the index was a key driver of outperformance. We remained underweight in large European banks, preferring to invest in higher quality, local customer-oriented emerging market banks in China and Brazil. Favorable stock selection, primarily in the commercial banking and capital markets industries, also enhanced returns.

     Although our materials holdings delivered double-digit gains, our underweight position was a drag on relative performance. We questioned the ability of materials companies to maintain current return levels, and we were cautious about these companies’ ability to maintain capital discipline. Stock level detractors from performance included global insurance giants AXA Group (France) and QBE Group (Australia).
     In broad geographic terms, the Fund meaningfully outperformed in Asia. Exposure to emerging Asian markets, including South Korea and India, was the key driver of relative performance in this region, as emerging markets saw signifi-cant gains during the reporting period. In contrast, relative gains were modestly offset by the negative impact of stock selection in Sweden, France and Italy.

     Stock selection was driven primarily by the underlying fundamentals of companies rather than top-down macroeconomic considerations. That being said, our belief in growing consumer demand outside the U.S. explained the Fund’s overweight position in the consumer discretionary sector. Similarly, healthy technology spending over the last several months was supportive of our overweight position in the information technology sector. The Fund’s exposure to the health care sector was reduced slightly; however, we remained overweight in this sector. We ended the reporting period with the most significant underweight positions in the materials, industrials and consumer

staples sectors. Our underweight position in the financials sector narrowed over the year as we added to select positions in this market segment during the latter half of the reporting period.

     Investor confidence rose, boosted by strong stock market performance in the second half of 2010, low interest rates, ample liquidity and improving global GDP projections. At the same time, the risks of tighter monetary policy in robust emerging market economies and the lingering sovereign debt situation in Europe meant investors should be prepared for volatility. At the close of the reporting period, we remained focused on investing according to our fundamentally driven investment process and maintaining our long-term investment view.

     We thank you for your continued investment in Invesco V.I. International Growth Fund.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Clas Olsson
Portfolio manager and CIO of Invesco’s International Growth Investment Management Unit, is lead manager with respect to the Fund’s investments in Europe and Canada of Invesco V.I. International Growth Fund. He joined Invesco in 1994. Mr. Olsson became a commissioned officer at the Royal Swedish Naval Academy in 1988. He also earned a B.B.A. from The University of Texas at Austin.

Barrett Sides
Portfolio manager, is lead manager with respect to the Fund’s investments in Asia Pacific and Latin America of Invesco V.I. International Growth Fund. He joined Invesco in 1990. Mr. Sides earned a B.S. in economics from Bucknell University. He also earned an M.B.A. in international business from the University of St. Thomas.

Shuxin Cao
Chartered Financial Analyst, portfolio manager, is manager of Invesco International V.I. Growth Fund. He joined Invesco in 1997. Mr. Cao earned a B.A. in English from the Tianjin Foreign Language Institute. He earned an M.B.A. from Texas A&M University. He is also a Certified Public Accountant.

Matthew Dennis
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. International Growth Fund. He joined Invesco in 2000. Mr. Dennis earned a B.A. in economics from The University of Texas at Austin. He also earned an M.S. in finance from Texas A&M University.

Jason Holzer
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. International Growth Fund. He joined Invesco in 1996. Mr. Holzer earned a B.A. in quantitative economics and an M.S. in engineering economic systems from Stanford University.

Assisted by the Asia Pacific/Latin America Team and the Europe/Canada Team

Invesco V.I. International Growth Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 4/30/93, Fund data from 5/5/93

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (5/5/93)			7.82	%
	10	Years	5.00
	5	Years	6.01
	1	Year	12.86
Series II Shares
	10	Years	4.73	%
	5	Years	5.74
	1	Year	12.61

Series II shares incepted on September 19, 2001. Performance shown prior to that date is that of Series I shares, restated to reflect the higher 12b-1 fees applicable to Series II. Series I performance reflects any applicable fee waivers or expense reimbursements. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.06% and 1.31%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. International Growth Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly.

     Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

Invesco V.I. International Growth Fund

Invesco V.I. International Growth Fund’s investment objective is long-term growth of capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

     The Fund’s foreign investments may be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     Securities issued by foreign companies and governments located in developing countries may be affected more negatively by inflation, devaluation of their currencies, higher transaction costs, delays in settlement, adverse political developments, the introduction of capital controls, withholding taxes, nationalization of private assets, expropriation, social unrest, war or lack of timely information than those in developed countries.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

About indexes used in this report

The MSCI EAFE^® Index is an unmanaged index considered representative of stocks of Europe, Australasia and the Far East.

     The MSCI EAFE^® Growth Index is an unmanaged index considered representative of growth stocks of Europe, Austral-asia and the Far East.

     The Lipper VUF International Growth Funds Index is an unmanaged index considered representative of international growth variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     CPA^® and Certified Public Accountant^® are trademarks owned by the American Institute of Certified Public Accountants.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. International Growth Fund

Schedule of Investments

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–94.11%
Australia–7.11%
BHP Billiton Ltd.		500,148	$	23,228,883
Cochlear Ltd.		182,366		14,958,819
CSL Ltd.		310,217		11,485,280
QBE Insurance Group Ltd.		471,691		8,748,682
Woolworths Ltd.		283,804		7,821,821
WorleyParsons Ltd.		581,263		15,883,364
				82,126,849
Belgium–1.62%
Anheuser-Busch InBev N.V.		327,097		18,719,068
Brazil–2.41%
Banco Bradesco S.A.–ADR		858,232		17,413,527
Petroleo Brasileiro S.A.–ADR		304,649		10,409,856
				27,823,383
Canada–5.19%
Canadian National Railway Co.		81,019		5,390,164
Canadian Natural Resources Ltd.		243,148		10,812,809
Cenovus Energy Inc.		307,650		10,266,311
Encana Corp.		229,860		6,704,730
Fairfax Financial Holdings Ltd.		21,920		8,989,332
Suncor Energy, Inc.		283,673		10,888,401
Talisman Energy Inc.		310,163		6,879,380
				59,931,127
China–1.43%
Industrial & Commercial Bank of China Ltd.–Class H		22,193,000		16,507,250
Denmark–1.78%
Novo Nordisk A.S.–Class B		182,245		20,523,057
France–5.01%
AXA S.A.		356,149		5,946,792
BNP Paribas		194,755		12,440,647
Cie Generale des Etablissements Michelin–Class B		74,859		5,387,575
Danone S.A.		170,156		10,697,783
Eutelsat Communications		189,046		6,923,464
Publicis Groupe S.A.		122,906		6,416,723
Total S.A.		190,825		10,139,453
				57,952,437
Germany–6.34%
Adidas AG		218,142		14,260,121
Bayer AG		151,576		11,207,776
Bayerische Motoren Werke AG		213,047		16,764,314
Fresenius Medical Care AG & Co. KGaA		170,041		9,828,852
Puma AG Rudolf Dassler Sport		32,633		10,821,129
SAP AG		205,187		10,452,946
				73,335,138
Hong Kong–1.73%
Hutchison Whampoa Ltd.		1,235,000		12,710,992
Li & Fung Ltd.		1,264,000		7,334,088
				20,045,080
India–1.81%
Bharat Heavy Electricals Ltd.		110,887		5,187,369
Infosys Technologies Ltd.		226,553		15,687,279
				20,874,648
Israel–2.03%
Teva Pharmaceutical Industries Ltd.–ADR		450,205		23,469,187
Japan–9.45%
Canon Inc.		208,500		10,683,420
Denso Corp.		276,000		9,520,522
FANUC Ltd.		133,300		20,463,511
Keyence Corp.		39,900		11,529,717
Komatsu Ltd.		334,900		10,129,870
Nidec Corp.		245,400		24,732,664
Toyota Motor Corp.		251,800		9,910,806
Yamada Denki Co., Ltd.		179,520		12,243,516
				109,214,026
Mexico–3.59%
America Movil, S.A.B. de C.V.–Series L–ADR		383,352		21,981,404
Fomento Economico Mexicano, S.A.B. de C.V.–ADR		132,372		7,402,242
Grupo Televisa, S.A.B. de C.V.–ADR		465,877		12,080,190
				41,463,836
Netherlands–3.79%
Koninklijke (Royal) KPN N.V.		727,191		10,626,476
Koninklijke Ahold N.V.		861,209		11,380,420
TNT N.V.		416,664		11,021,018
Unilever N.V.		346,969		10,809,621
				43,837,535
Philippines–1.05%
Philippine Long Distance Telephone Co.		209,125		12,194,184

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. International Growth Fund

	Shares		Value
Russia–1.54%
Gazprom OAO–ADR		490,669	$	12,389,392
VimpelCom Ltd.–ADR		358,402		5,390,366
				17,779,758
Singapore–2.83%
Keppel Corp. Ltd.		2,190,000		19,324,032
United Overseas Bank Ltd.		944,000		13,392,158
				32,716,190
South Korea–2.39%
Hyundai Mobis		72,784		18,389,918
NHN Corp.(a)		46,098		9,271,313
				27,661,231
Sweden–1.56%
Kinnevik Investment A.B.–Class B		274,789		5,605,017
Telefonaktiebolaget LM Ericsson–Class B		512,029		5,937,225
Volvo A.B.–Class B(a)		364,483		6,504,948
				18,047,190
Switzerland–7.56%
Julius Baer Group Ltd.		232,305		10,895,127
Nestle S.A.		409,482		24,005,932
Novartis AG		286,688		16,889,904
Roche Holding AG		160,014		23,473,517
Syngenta AG		41,344		12,124,287
				87,388,767
Taiwan–2.28%
Hon Hai Precision Industry Co., Ltd.		2,523,680		10,105,329
Taiwan Semiconductor Manufacturing Co. Ltd.–ADR		1,295,677		16,247,790
				26,353,119
Turkey–0.84%
Akbank T.A.S.		1,741,503		9,703,145
United Kingdom–20.77%
BG Group PLC		733,043		14,838,653
British American Tobacco PLC		379,124		14,602,344
Centrica PLC		3,011,153		15,586,990
Compass Group PLC		2,316,764		20,995,530
Imperial Tobacco Group PLC		685,516		21,043,191
Informa PLC		1,587,392		10,089,757
International Power PLC		2,823,086		19,269,495
Kingfisher PLC		2,639,299		10,856,585
Next PLC		332,274		10,236,050
Reckitt Benckiser Group PLC		197,289		10,847,531
Reed Elsevier PLC		1,346,855		11,375,964
Royal Dutch Shell PLC–Class B		357,683		11,839,492
Shire PLC		880,897		21,218,202
Smith & Nephew PLC		478,496		5,030,537
Tesco PLC		2,342,619		15,529,573
Vodafone Group PLC		6,098,329		15,885,415
WPP PLC		874,276		10,807,947
				240,053,256
Total Common Stocks & Other Equity Interests (Cost $727,626,605)				1,087,719,461
Money Market Funds–6.87%
Liquid Assets Portfolio–Institutional Class(b)		39,693,594		39,693,594
Premier Portfolio–Institutional Class(b)		39,693,594		39,693,594
Total Money Market Funds (Cost $79,387,188)				79,387,188
TOTAL INVESTMENTS–100.98% (Cost $807,013,793)				1,167,106,649
OTHER ASSETS LESS LIABILITIES–(0.98)%				(11,276,909	)
NET ASSETS–100.00%			$	1,155,829,740

Investment Abbreviations:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

(a)	Non-income producing security.
(b)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. International Growth Fund

Statement of Assets and Liabilities

For the year ended December 31, 2010

Assets:
Investments, at value (Cost $727,626,605)	$	1,087,719,461
Investments in affiliated money market funds, at value and cost		79,387,188
Total investments, at value (Cost $807,013,793)		1,167,106,649
Cash		209,372
Foreign currencies, at value (Cost $164,270)		274,270
Receivable for:
Fund shares sold		10,351,728
Dividends		3,366,683
Investment for trustee deferred compensation and retirement plans		55,477
Other assets		190
Total assets		1,181,364,369
Liabilities:
Payable for:
Investments purchased		22,699,582
Fund shares reacquired		802,700
Accrued fees to affiliates		1,627,416
Accrued other operating expenses		257,138
Trustee deferred compensation and retirement plans		147,793
Total liabilities		25,534,629
Net assets applicable to shares outstanding	$	1,155,829,740
Net assets consist of:
Shares of beneficial interest	$	1,077,757,031
Undistributed net investment income		15,003,445
Undistributed net realized gain (loss)		(297,257,793	)
Unrealized appreciation		360,327,057
	$	1,155,829,740
Net Assets:
Series I	$	586,219,407
Series II	$	569,610,333
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		20,431,296
Series II		20,091,300
Series I:
Net asset value per share	$	28.69
Series II:
Net asset value per share	$	28.35

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $3,333,739)	$	35,097,966
Dividends from affiliated money market funds		95,935
Total investment income		35,193,901
Expenses:
Advisory fees		10,017,355
Administrative services fees		3,765,710
Custodian fees		698,186
Distribution fees:
Distribution fees — Series II		2,222,116
Transfer agent fees		76,397
Trustees’ and officers’ fees and benefits		60,249
Other		129,268
Total expenses		16,969,281
Less: Fees waived, expenses reimbursed and expense offset arrangement(s)		(147,130	)
Net expenses		16,822,151
Net investment income		18,371,750
Realized and unrealized gain from:
Net realized gain (loss) from:
Investment securities (includes net gains from securities sold to affiliates of $(1,349))		(13,917,143	)
Foreign currencies		(3,239,844	)
		(17,156,987	)
Change in net unrealized appreciation (depreciation) of:
Investment securities (net of foreign taxes on holdings of $(1,239,463))		41,249,334
Foreign currencies		(71,241	)
		41,178,093
Net realized and unrealized gain		24,021,106
Net increase in net assets resulting from operations	$	42,392,856

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. International Growth Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	18,371,750		$	20,309,315
Net realized gain (loss)		(17,156,987	)		(147,739,857	)
Change in net unrealized appreciation		41,178,093			630,344,796
Net increase in net assets resulting from operations		42,392,856			502,914,254
Distributions to shareholders from net investment income:
Series I		(11,906,519	)		(7,359,852	)
Series II		(9,115,881	)		(17,849,719	)
Total distributions from net investment income		(21,022,400	)		(25,209,571	)
Distributions to shareholders from net realized gains:
Share transactions-net:
Series I		(19,927,647	)		(27,076,452	)
Series II		(903,010,172	)		366,967,140
Net increase (decrease) in net assets resulting from share transactions		(922,937,819	)		339,890,688
Net increase (decrease) in net assets		(901,567,363	)		817,595,371
Net assets:
Beginning of year		2,057,397,103			1,239,801,732
End of year (includes undistributed net investment income of $15,003,445 and $20,893,939, respectively)	$	1,155,829,740		$	2,057,397,103

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. International Growth Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.

Invesco V.I. International Growth Fund

	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.

Invesco V.I. International Growth Fund

G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
J.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.75%
Over $250 million		0	.70%

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $146,928.

Invesco V.I. International Growth Fund

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $335,035 for accounting and fund administrative services and reimbursed $3,430,675 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1*		Level 2*		Level 3		Total
Australia	$	32,453,866	$	49,672,983	$	—	$	82,126,849
Belgium		18,719,068		—		—		18,719,068
Brazil		27,823,383		—		—		27,823,383
Canada		59,931,127		—		—		59,931,127
China		—		16,507,250		—		16,507,250
Denmark		—		20,523,057		—		20,523,057
France		17,621,246		40,331,191		—		57,952,437
Germany		73,335,138		—		—		73,335,138
Hong Kong		20,045,080		—		—		20,045,080
India		—		—		23,194,053		23,194,053
Israel		23,469,187		—		—		23,469,187
Japan		52,357,419		56,856,607		—		109,214,026
Mexico		41,463,836		—		—		41,463,836
Netherlands		10,809,621		33,027,914		—		43,837,535
Philippines		12,194,184		—		—		12,194,184
Russia		17,779,758		—		—		17,779,758

Invesco V.I. International Growth Fund

	Level 1*		Level 2*		Level 3		Total
Singapore		32,716,190		—		—		32,716,190
South Korea		18,389,918		9,271,313		—		27,661,231
Sweden		5,605,017		12,442,173		—		18,047,190
Switzerland		87,388,767		—		—		87,388,767
Taiwan		16,247,790		10,105,329		—		26,353,119
Turkey		—		9,703,145		—		9,703,145
United Kingdom		119,387,092		120,666,164		—		240,053,256
United States		79,387,188		—		—		79,387,188
Total Investments	$	767,124,875	$	379,107,126	$	23,194,053	$	1,169,426,054

*  Transfers occurred between Level 1 and Level 2 due to foreign fair value adjustments.

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $0 and securities sales of $30,109, which resulted in net realized gains (losses) of $(1,349).

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $6,610 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

Invesco V.I. International Growth Fund

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	21,022,400	$	25,209,571

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	15,257,998
Net unrealized appreciation — investments		331,759,754
Net unrealized appreciation — other investments		234,201
Temporary book/tax differences		(142,789	)
Post-October deferrals		(111,764	)
Capital loss carryforward		(268,924,691	)
Shares of beneficial interest		1,077,757,031
Total net assets	$	1,155,829,740

  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 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 December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	87,932,439
December 31, 2017		143,189,697
December 31, 2018		37,802,555
Total capital loss carryforward	$	268,924,691

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $512,908,794 and $1,336,207,806, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	334,653,685
Aggregate unrealized (depreciation) of investment securities		(2,893,932	)
Net unrealized appreciation of investment securities	$	331,759,753
Cost of investments for tax purposes is $835,346,896.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, on December 31, 2010, undistributed net investment income (loss) was decreased by $3,239,844 and undistributed net realized gain (loss) was increased by $3,239,844. This reclassification had no effect on the net assets of the Fund.

Invesco V.I. International Growth Fund

NOTE 10—Share Information

	Summary of Share Activity
	Years ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		3,482,926		$	94,266,556			3,456,056		$	76,132,583
Series II		6,653,404			171,405,013			21,080,766			443,187,963
Issued as reinvestment of dividends:
Series I		445,770			11,906,519			284,164			7,359,852
Series II		345,168			9,115,882			698,893			17,849,719
Reacquired:
Series I		(4,909,461	)		(126,100,722	)		(5,238,473	)		(110,568,887	)
Series II		(45,442,204	)		(1,083,531,067	)		(4,496,473	)		(94,070,542	)
Net increase (decrease) in share activity		(39,424,397	)	$	(922,937,819	)		15,784,933		$	339,890,688

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 54% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																											Ratio of			Ratio of
																											expenses			expenses
					Net gains																						to average			to average net			Ratio of net
	Net asset				(losses) on						Dividends			Distributions													net assets			assets without			investment
	value,		Net		securities (both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			Distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	26.01	$	0.38	$	2.92		$	3.30		$	(0.62	)	$	—		$	(0.62	)	$	28.69		12.86	%	$	586,219		1.03	%(d)		1.04	%(d)		1.46	%(d)		38	%
Year ended 12/31/09		19.49		0.32		6.55			6.87			(0.35	)		—			(0.35	)		26.01		35.24			556,883		1.02			1.04			1.47			27
Year ended 12/31/08		33.63		0.54		(14.16	)		(13.62	)		(0.15	)		(0.37	)		(0.52	)		19.49		(40.38	)		446,437		1.05			1.06			1.96			44
Year ended 12/31/07		29.44		0.34		3.98			4.32			(0.13	)		—			(0.13	)		33.63		14.68			792,779		1.06			1.07			1.06			20
Year ended 12/31/06		23.17		0.23		6.32			6.55			(0.28	)		—			(0.28	)		29.44		28.28			563,460		1.10			1.10			0.90			34
Series II
Year ended 12/31/10		25.63		0.31		2.89			3.20			(0.48	)		—			(0.48	)		28.35		12.61			569,610		1.28	(d)		1.29	(d)		1.21	(d)		38
Year ended 12/31/09		19.23		0.27		6.44			6.71			(0.31	)		—			(0.31	)		25.63		34.91			1,500,514		1.27			1.29			1.22			27
Year ended 12/31/08		33.24		0.45		(13.96	)		(13.51	)		(0.13	)		(0.37	)		(0.50	)		19.23		(40.55	)		793,365		1.30			1.31			1.71			44
Year ended 12/31/07		29.16		0.26		3.94			4.20			(0.12	)		—			(0.12	)		33.24		14.41			745,206		1.31			1.32			0.81			20
Year ended 12/31/06		23.00		0.17		6.25			6.42			(0.26	)		—			(0.26	)		29.16		27.92			163,657		1.35			1.35			0.65			34

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $524,347 and $888,847 for Series I and Series II, respectively.

NOTE 12—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco Van Kampen V.I. International Growth Equity Fund (the “Acquiring Fund”) in exchange for shares of the Acquiring Fund. The Agreement requires approval of the Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

Invesco V.I. International Growth Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)
and Shareholders of Invesco V.I. International Growth Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. International Growth Fund (formerly known as AIM V.I. International Growth Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. International Growth Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,232.90	$	5.85	$	1,019.96	$	5.30		1.04	%
Series II		1,000.00		1,231.30		7.26		1,018.70		6.56		1.29

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*		0%
Foreign Taxes	$	0.0855 per share
Foreign Source Income	$	1.0019 per share

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. International Growth Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Large Cap Growth Fund

Annual Report to Shareholders  § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VILCG-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

In June 2010, Erik Voss and Ido Cohen assumed management of the Fund. A listing of your Fund’s managers appears later in this report.

     For the fiscal year ended December 31, 2010, Invesco V.I. Large Cap Growth Fund had positive double-digit returns and slightly outperformed the Fund’s benchmark, the Russell 1000 Growth Index.

     The Fund also outperformed the broad market as represented by the S&P 500 Index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares*	17.25	%
Series II Shares*	16.87
S&P 500 Index▼ (Broad Market Index)	15.08
Russell 1000 Growth Index▼ (Style-Specific Index)	16.71
Lipper VUF Large-Cap Growth Funds Index▼ (Peer Group)	14.92

▼	Lipper Inc.
*	Performance includes litigation proceeds. Had these proceeds not been received, total return would have been lower.

How we invest

We believe a growth investment strategy is an essential component of a diversified portfolio. Our investment process emphasizes rigorous bottom-up analysis of individual companies. We seek to invest in companies with strong or improving fundamentals, attractive valuation relative to growth prospects and earnings expectations that appear fair to conservative.

     To narrow our investment universe, we utilize a holistic approach that emphasizes fundamental research and, to a lesser extent, includes quantitative analysis. At the end of this distillation process, we have a set of stocks to analyze in greater depth.

     Our fundamental analysis focuses on identifying companies with strong drivers of growth. To accomplish this goal, we conduct rigorous bottom-up analysis to develop higher conviction in each company’s prospects for growth. Through our analysis, we develop a

mosaic of each company through detailed discussions with company management teams, competitors, distributors, suppliers, Wall Street analysts and customers. We also utilize a variety of valuation techniques based on the company in question, the industry in which the company operates, the stage of the business cycle and other factors that best reflect a company’s value.

     Risk management plays an important role in portfolio construction, as our target portfolio attempts to maximize the relationship between risk and return. We seek to accomplish this goal by investing in companies with attractive fundamental prospects for growth, and we divide the portfolio between stable growth stocks and catalyst-driven stocks.

     We consider selling a stock for any of the following reasons:

n	The price target set at purchase has been reached.
n	There is deterioration in fundamentals.

n	The catalysts for growth are no longer present or are reflected in the stock price.
n	There is a more attractive investment opportunity.

Market conditions and your Fund

The U.S. economy showed signs of improvement during the Fund’s fiscal year, potentially indicating that the economy had transitioned from a contraction phase into an expansionary phase. Nevertheless, the pace of recovery remained modest, and the transition from government stimulus- induced growth to private economic recovery was uncertain.

     The U.S. Federal Reserve’s (the Fed) federal funds target rate remained low ranging from zero to 0.25%.¹ Real gross domestic product (GDP) registered positive growth during the reporting period with quarterly annualized increases of 3.7%, 1.7% and 2.6% for the first, second and third quarters of 2010, respectively.² Inflation, measured by the seasonally adjusted Consumer Price Index, remained relatively benign. While labor markets improved as layoffs moderated, new hiring remained quite weak. Unemployment, after climbing steadily throughout 2009, fell slightly during 2010 to a rate of 9.4% nationwide as of December 2010.³

      While stock market volatility increased significantly during the fiscal year, indexes measuring the performance of large-, mid- and small-cap stocks finished the period with positive, double-digit returns. In terms of investment style, growth stocks outperformed value stocks. The sectors with the highest returns in the Russell 1000 Growth Index included more economically sensitive sectors such as consumer discretionary, industrials and materials, as well as the telecommunication services sector.

Portfolio Composition

By sector

Information Technology	30.9	%
Consumer Discretionary	13.9
Energy	12.5
Industrials	11.5
Health Care	9.4
Materials	8.8
Financials	4.8
Consumer Staples	2.8
Telecommunication Services	1.4
Money Market Funds Plus
Other Assets Less Liabilities	4.0

Top 10 Equity Holdings*

1. Apple Inc.	7.6	%
2. Monsanto Co.	3.6
3. Visa Inc., Class A	3.1
4. Potash Corp. of Saskatchewan Inc.	2.7
5. Google Inc., Class A	2.7
6. Oracle Corp.	2.5
7. EMC Corp.	2.3
8. Rovi Corp.	2.2
9. Goodrich Corp.	2.0
10. Schlumberger Ltd.	2.0

Top Five Industries

1. Oil & Gas Equipment & Services	7.8	%
2. Computer Hardware	7.6
3. Fertilizers & Agricultural Chemicals	7.1
4. Systems Software	5.5
5. Computer Storage & Peripherals	3.8

Total Net Assets	$68.6 million
Total Number of Holdings*		72

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.

Invesco V.I. Large Cap Growth Fund

Conversely, the health care and utilities sectors had the lowest returns but were still in positive territory.

     The Fund had positive returns and outperformed the Russell 1000 Growth Index. Outperformance was driven primarily by stock selection in several sectors, including information technology (IT), industrials and consumer discretionary.

     Over the year, the Fund outperformed by the widest margin in the IT sector, largely due to stock selection. The leading contributor to Fund performance was Apple. Apple continued to benefit from strong consumer demand for its innovative technology products, including the iPad tablet computer, as well as a new version of the iPhone. Rovi, a company that develops software for the interactive program guide for televisions, was also among the Fund’s leading contributors to performance.

     The Fund also outperformed in the industrials sector, driven by stock selection. One of the leading contributors to performance was railroad operator Union Pacific, which continued to benefit from improving volume trends, stronger pricing and operation efficiency.

     Outperformance in the consumer discretionary sector was due to stock selection. Two of the leading contributors to Fund performance were clothing retailer Limited Brands and casino operator Las Vegas Sands. Both companies benefited from improving consumer spending trends.

     Some of this outperformance was offset by underperformance in other sectors, including financials, materials and telecommunication services. The Fund underperformed by the widest margin in the financials sector, driven by stock selection. One of the leading detractors from Fund performance was investment bank holding Goldman Sachs Group, which had weak performance caused by declining revenues and earnings in several areas in this more challenging economic environment. We sold this holding.

     Underperformance in the materials sector was due to stock selection. One of the weakest performing stocks in this sector was Syngenta, a company that produces crop protection products and seeds. We sold this holding. Under-performance in the telecommunication services sector was also due to stock selection.

     After taking over management of the Fund, we made several changes to the portfolio. The most significant changes included the sale of holdings in the health care, IT and consumer staples sectors. Proceeds from the sale of holdings in these sectors were used to add exposure in other sectors, including energy, materials and industrials.

     As we’ve discussed, the stock market has experienced significant volatility during the last 12 months. We would like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult a financial adviser to discuss your individual financial program. We thank you for your commitment to Invesco V.I. Large Cap Growth Fund.

1	U.S. Federal Reserve
2	Bureau of Economic Analysis
3	Bureau of Labor Statistics

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Erik Voss

Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Large Cap Growth Fund. He joined Invesco in 2010. Mr. Voss earned a B.S. in mathematics and an M.S. in finance, both from the University of Wisconsin.

Ido Cohen

Portfolio manager, is manager of Invesco V.I. Large Cap Growth Fund. He joined Invesco in 2010. Mr. Cohen is a cum laude graduate of the Wharton School of the University of Pennsylvania.

Invesco V.I. Large Cap Growth Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Classes since Inception

Fund data from 8/29/03, index data from 8/31/03

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (8/29/03)	5.25	%
5 Years	2.64
1 Year	17.25
Series II Shares
Inception (8/29/03)	5.01	%
5 Years	2.37
1 Year	16.87

Performance includes litigation proceeds. Had these proceeds not been received, total return would have been lower.

The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses,

reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.02% and 1.27%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.16% and 1.41%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Large Cap Growth Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly.

Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2012. See current prospectus for more information.

Invesco V.I. Large Cap Growth Fund

Invesco V.I. Large Cap Growth Fund’s investment objective is long-term growth of capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

     An investment by the Fund in ETFs generally presents the same primary risks as an investment in a mutual fund. In addition, ETFs may be subject to the following: a discount of the ETF’s shares to its net asset value; failure to develop an active trading market for the ETF’s shares; the listing exchange halting trading of the ETF’s shares; failure of the ETF’s shares to track the referenced index; and holding troubled securities in the referenced index. ETFs may involve duplication of management fees and certain other expenses, as the Fund indirectly bears its proportionate share of any expenses paid by the ETFs in which it invests. Further, certain of the ETFs in which each Fund may invest are leveraged. The more a Fund invests in such leveraged ETFs, the more this leverage will magnify any losses on those investments.

     The Fund’s foreign investments may be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

     The Fund may invest a large percentage of its assets in a limited number of securities or other instruments, which could negatively affect the value of the Fund.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Russell 1000^® Growth Index is an unmanaged index considered representative of large-cap growth stocks. The Russell 1000 Growth Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Lipper VUF Large-Cap Growth Funds Index is an unmanaged index considered representative of large-cap growth variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Large Cap Growth Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–95.99%
Aerospace & Defense–3.08%
Goodrich Corp.		15,964	$	1,405,949
Honeywell International Inc.		13,306		707,347
				2,113,296
Air Freight & Logistics–1.26%
C.H. Robinson Worldwide, Inc.		10,761		862,925
Apparel Retail–2.39%
Limited Brands, Inc.		34,093		1,047,678
Ross Stores, Inc.		9,368		592,526
				1,640,204
Application Software–2.10%
Citrix Systems, Inc.(b)		10,999		752,442
Salesforce.com, Inc.(b)		5,241		691,812
				1,444,254
Asset Management & Custody Banks–2.63%
Ameriprise Financial, Inc.		17,626		1,014,376
Franklin Resources, Inc.		7,091		788,590
				1,802,966
Automobile Manufacturers–0.89%
Ford Motor Co.(b)		36,386		610,921
Biotechnology–3.33%
Dendreon Corp.(b)		14,898		520,238
Gilead Sciences, Inc.(b)		34,473		1,249,302
United Therapeutics Corp.(b)		8,202		518,530
				2,288,070
Cable & Satellite–2.99%
Comcast Corp.–Class A		61,969		1,361,459
DIRECTV–Class A(b)		17,259		689,152
				2,050,611
Casinos & Gaming–1.06%
Las Vegas Sands Corp.(b)		15,784		725,275
Coal & Consumable Fuels–1.80%
Peabody Energy Corp.		19,305		1,235,134
Communications Equipment–2.52%
Cisco Systems, Inc.(b)		41,382		837,158
QUALCOMM, Inc.		18,006		891,117
				1,728,275
Computer Hardware–7.60%
Apple Inc.(b)		16,164		5,213,860
	Shares
Computer Storage & Peripherals–3.88%
EMC Corp.(b)		70,109		1,605,496
SanDisk Corp.(b)		10,693		533,153
Western Digital Corp.(b)		15,404		522,196
				2,660,845
Construction & Engineering–0.20%
Foster Wheeler AG (Switzerland)(b)		3,924		135,456
Construction, Farm Machinery & Heavy Trucks–2.03%
Cummins, Inc.		4,827		531,019
Deere & Co.		10,385		862,474
				1,393,493
Consumer Finance–0.60%
American Express Co.		9,575		410,959
Data Processing & Outsourced Services–3.08%
Visa Inc.–Class A		30,045		2,114,567
Diversified Banks–0.54%
Comerica Inc.		8,782		370,952
Electronic Manufacturing Services–0.27%
Tyco Electronics Ltd. (Switzerland)		5,254		185,992
Fertilizers & Agricultural Chemicals–7.08%
Monsanto Co.		35,431		2,467,415
Mosaic Co. (The)		7,126		544,141
Potash Corp. of Saskatchewan Inc. (Canada)		11,923		1,846,038
				4,857,594
General Merchandise Stores–1.50%
Dollar Tree, Inc.(b)		9,030		506,402
Target Corp.		8,682		522,049
				1,028,451
Gold–1.70%
Barrick Gold Corp. (Canada)		21,910		1,165,174
Health Care Distributors–0.75%
McKesson Corp.		7,351		517,363
Health Care Equipment–1.96%
Baxter International Inc.		13,114		663,831
Covidien PLC (Ireland)		14,970		683,530
				1,347,361
Health Care Services–0.50%
Medco Health Solutions, Inc.(b)		5,568		341,151

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Large Cap Growth Fund

	Shares		Value
Hotels, Resorts & Cruise Lines–0.98%
Starwood Hotels & Resorts Worldwide, Inc.		11,108	$	675,144
Industrial Machinery–1.63%
Ingersoll-Rand PLC (Ireland)		23,817		1,121,543
Internet Retail–2.07%
Amazon.com, Inc.(b)		5,090		916,200
Netflix Inc.(b)		2,873		504,786
				1,420,986
Internet Software & Services–2.69%
Google Inc.–Class A(b)		3,104		1,843,683
IT Consulting & Other Services–1.25%
Cognizant Technology Solutions Corp.–Class A(b)		11,663		854,781
Managed Health Care–0.78%
UnitedHealth Group Inc.		14,862		536,667
Movies & Entertainment–0.75%
Walt Disney Co. (The)		13,722		514,712
Oil & Gas Drilling–1.45%
Transocean Ltd.(b)		14,291		993,367
Oil & Gas Equipment & Services–7.79%
Cameron International Corp.(b)		14,976		759,732
Halliburton Co.		33,585		1,371,276
National Oilwell Varco Inc.		11,880		798,930
Schlumberger Ltd.		16,721		1,396,203
Weatherford International Ltd.(b)		44,676		1,018,613
				5,344,754
Oil & Gas Exploration & Production–1.47%
EOG Resources, Inc.		11,046		1,009,715
Other Diversified Financial Services–1.04%
JPMorgan Chase & Co.		16,833		714,056
Packaged Foods & Meats–1.87%
Mead Johnson Nutrition Co.		20,599		1,282,288
Pharmaceuticals–2.09%
Hospira, Inc.(b)		17,997		1,002,253
Teva Pharmaceutical Industries Ltd.–ADR (Israel)		8,325		433,982
				1,436,235
Railroads–1.74%
Union Pacific Corp.		12,891		1,194,480
Restaurants–0.71%
McDonald’s Corp.		6,383		489,959
Semiconductors–2.08%
Broadcom Corp.–Class A		16,032		698,194
Xilinx, Inc.		25,224		730,991
				1,429,185
Soft Drinks–0.89%
Hansen Natural Corp.(b)		3,914		204,624
PepsiCo, Inc.		6,236		407,398
				612,022
Specialty Stores–0.57%
Tiffany & Co.		6,283		391,242
Systems Software–5.48%
Oracle Corp.		53,964		1,689,073
Red Hat, Inc.(b)		12,289		560,993
Rovi Corp.(b)		24,396		1,512,796
				3,762,862
Trading Companies & Distributors–0.99%
W.W. Grainger, Inc.		4,929		680,744
Trucking–0.57%
J.B. Hunt Transport Services, Inc.		9,567		390,429
Wireless Telecommunication Services–1.36%
American Tower Corp.–Class A(b)		18,142		936,853
Total Common Stocks & Other Equity Interests (Cost $51,269,455)				65,880,856
Money Market Funds–3.93%
Liquid Assets Portfolio–Institutional Class(c)		1,348,609		1,348,609
Premier Portfolio–Institutional Class(c)		1,348,609		1,348,609
Total Money Market Funds (Cost $2,697,218)				2,697,218
TOTAL INVESTMENTS–99.92% (Cost $53,966,673)				68,578,074
OTHER ASSETS LESS LIABILITIES–0.08%				52,346
NET ASSETS–100.00%			$	68,630,420

Investment Abbreviations:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Large Cap Growth Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $51,269,455)	$	65,880,856
Investments in affiliated money market funds, at value and cost		2,697,218
Total investments, at value (Cost $53,966,673)		68,578,074
Receivable for:
Investments sold		330,724
Dividends		51,343
Investment for trustee deferred compensation and retirement plans		29,579
Total assets		68,989,720
Liabilities:
Payable for:
Investments purchased		23,303
Fund shares reacquired		155,956
Amount due custodian		17,373
Accrued fees to affiliates		91,970
Accrued other operating expenses		29,452
Trustee deferred compensation and retirement plans		41,246
Total liabilities		359,300
Net assets applicable to shares outstanding	$	68,630,420
Net assets consist of:
Shares of beneficial interest	$	61,051,135
Undistributed net investment income		145,907
Undistributed net realized gain (loss)		(7,179,966	)
Unrealized appreciation		14,613,344
	$	68,630,420
Net Assets:
Series I	$	68,032,372
Series II	$	598,048
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		4,748,464
Series II		42,045
Series I:
Net asset value per share	$	14.33
Series II:
Net asset value per share	$	14.22

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $6,120)	$	791,989
Dividends from affiliated money market funds (includes securities lending income of $1,963)		6,223
Total investment income		798,212
Expenses:
Advisory fees		449,012
Administrative services fees		204,146
Custodian fees		12,257
Distribution fees — Series II		1,484
Transfer agent fees		9,413
Trustees’ and officers’ fees and benefits		17,625
Other		42,013
Total expenses		735,950
Less: Fees waived and expense offset arrangement(s)		(85,969	)
Net expenses		649,981
Net investment income		148,231
Realized and unrealized gain from:
Net realized gain from:
Investment securities (includes net gains from securities sold to affiliates of $417,974)		7,619,615
Foreign currencies		36,209
		7,655,824
Change in net unrealized appreciation of:
Investment securities		2,362,438
Foreign currencies		1,369
		2,363,807
Net realized and unrealized gain		10,019,631
Net increase in net assets resulting from operations	$	10,167,862

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Large Cap Growth Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	148,231		$	282,650
Net realized gain (loss)		7,655,824			(3,064,495	)
Change in net unrealized appreciation		2,363,807			17,627,936
Net increase in net assets resulting from operations		10,167,862			14,846,091
Distributions to shareholders from net investment income:
Series I		(294,279	)		(225,916	)
Series II		(1,038	)		(60	)
Total distributions from net investment income		(295,317	)		(225,976	)
Share transactions–net:
Series I		(9,585,554	)		(9,298,793	)
Series II		(188,163	)		(166,783	)
Net increase (decrease) in net assets resulting from share transactions		(9,773,717	)		(9,465,576	)
Net increase in net assets		98,828			5,154,539
Net assets:
Beginning of year		68,531,592			63,377,053
End of year (includes undistributed net investment income of $145,907 and $256,783, respectively)	$	68,630,420		$	68,531,592

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Large Cap Growth Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as

Invesco V.I. Large Cap Growth Fund

	institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the

Invesco V.I. Large Cap Growth Fund

	financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.695%
Next $250 million		0	.67%
Next $500 million		0	.645%
Next $1.5 billion		0	.62%
Next $2.5 billion		0	.595%
Next $2.5 billion		0	.57%
Next $2.5 billion		0	.545%
Over $10 billion		0	.52%

Invesco V.I. Large Cap Growth Fund

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, 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 Series I shares to 1.01% and Series II shares to 1.26% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $85,832.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $154,146 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”).

  The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. 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.

Invesco V.I. Large Cap Growth Fund

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	68,578,074	$	—	$	—	$	68,578,074

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $6,531,855 and securities sales of $3,531,838, which resulted in net realized gains of $417,974.

NOTE 5—Expense Offset Arrangement(s)

The expense offset arrangement is comprised of custodian credits which result from periodic overnight cash balances at the custodian. For the year ended December 31, 2010, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $137.

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $2,634 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 7—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	295,317	$	225,976

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	184,485
Net unrealized appreciation — investments		13,764,139
Net unrealized appreciation — other investments		1,943
Temporary book/tax differences		(38,578	)
Capital loss carryforward		(6,332,704	)
Shares of beneficial interest		61,051,135
Total net assets	$	68,630,420

  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 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.

Invesco V.I. Large Cap Growth 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 utilized $7,599,209 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes.

  The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	898,943
December 31, 2017		5,433,761
Total capital loss carryforward	$	6,332,704

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $93,134,807 and $105,515,879, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	14,088,503
Aggregate unrealized (depreciation) of investment securities		(324,364	)
Net unrealized appreciation of investment securities	$	13,764,139
Cost of investments for tax purposes is $54,813,935.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, on December 31, 2010, undistributed net investment income was increased by $36,210 and undistributed net realized gain (loss) was decreased by $36,210. This reclassification had no effect on the net assets of the Fund.

NOTE 11—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		347,494		$	4,540,690			1,174,128		$	11,561,836
Series II		264			3,320			143			1,375
Issued as reinvestment of dividends:
Series I		23,190			294,279			19,033			225,916
Series II		82			1,038			5			60
Reacquired:
Series I		(1,143,878	)		(14,420,523	)		(2,077,325	)		(21,086,545	)
Series II		(15,758	)		(192,521	)		(16,099	)		(168,218	)
Net increase (decrease) in share activity		(788,606	)	$	(9,773,717	)		(900,115	)	$	(9,465,576	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 89% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Large Cap Growth Fund

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																						Ratio of			Ratio of
																						expenses			expenses
						Net gains																to average			to average net			Ratio of net
	Net asset		Net			(losses) on						Dividends										net assets			assets without			investment
	value,		investment			securities (both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income			realized and			investment			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)			unrealized)			operations			income			of period		return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/10	$	12.28	$	0.03	(c)	$	2.08		$	2.11		$	(0.06	)	$	14.33		17.25	%	$	68,032		1.01	%(d)		1.14	%(d)		0.23	%(d)		151	%
Year ended 12/31/09		9.78		0.04	(c)		2.50	(e)		2.54			(0.04	)		12.28		25.99	(e)		67,831		1.01			1.15			0.44			57
Year ended 12/31/08		15.85		0.03	(c)		(6.10	)		(6.07	)		(0.00	)		9.78		(38.29	)		62,665		1.01			1.10			0.23			41
Year ended 12/31/07		13.71		0.02			2.13			2.15			(0.01	)		15.85		15.64			129,071		1.01			1.08			0.11			58
Year ended 12/31/06		12.71		0.02			1.00			1.02			(0.02	)		13.71		8.05			120,825		1.02			1.23			0.06			76
Series II
Year ended 12/31/10		12.19		(0.00	)(c)		2.05			2.05			(0.02	)		14.22		16.87			598		1.26	(d)		1.39	(d)		(0.02	)(d)		151
Year ended 12/31/09		9.70		0.02	(c)		2.47	(e)		2.49			(0.00	)		12.19		25.68	(e)		700		1.26			1.40			0.19			57
Year ended 12/31/08		15.75		0.00	(c)		(6.05	)		(6.05	)		—			9.70		(38.41	)		712		1.26			1.35			(0.02	)		41
Year ended 12/31/07		13.66		(0.04	)		2.13			2.09			—			15.75		15.30			1,259		1.26			1.33			(0.14	)		58
Year ended 12/31/06		12.67		(0.01	)		1.00			0.99			—			13.66		7.81			1,949		1.27			1.48			(0.19	)		76

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Calculated using average shares outstanding.
(d)	Ratios are based on average daily net assets (000’s) of $64,012 and $594 for Series I and Series II shares, respectively.
(e)	Includes litigation proceeds received during the period. Had the litigation proceeds not been received Net gains on securities (both realized and unrealized) per share would have been $2.44 and $2.41 for Series I and Series II shares, respectively, and total returns would have been lower.

NOTE 13—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco Van Kampen V.I. Capital Growth Fund (the “Acquiring Fund”) in exchange for shares of the Acquiring Fund. The Agreement requires approval of the Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

Invesco V.I. Large Cap Growth Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Large Cap Growth Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Large Cap Growth Fund (formerly known as AIM V.I. Large Cap Growth Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Large Cap Growth Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
							Ending
	Beginning		Ending		Expenses		Account		Expenses		Annualized
	Account Value		Account Value		Paid During		Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,252.10	$	5.68	$	1,020.16	$	5.09		1.00	%
Series II		1,000.00		1,249.70		7.09		1,018.90		6.36		1.25

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Large Cap 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Large Cap Growth Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Leisure Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

I-VILEI-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

During the year ended December 31, 2010, the economy showed signs of improvement, fueling equity markets’ continued upward trajectory. The consumer discretionary sector benefited from a rotation to more cyclical stocks as investors anticipated an economic recovery. As a result, Invesco V.I. Leisure Fund outperformed the broad market, as measured by the S&P 500 Index, for the reporting period. The Fund, however, underperformed the S&P 500 Consumer Discretionary Index, its style-specific index, predominately as a result of security selection within the hotels, restaurants and leisure industry. An overweight exposure in the internet software and services industry and an underweight exposure in automobiles were also contributing factors to Fund underperformance.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	21.88	%
Series II Shares	21.70
S&P 500 Index▼ (Broad Market Index)	15.08
S&P 500 Consumer Discretionary Index▼ (Style-Specific Index)	27.66

^▼ Lipper Inc.

How we invest

We focus on companies that profit from consumer spending on leisure activities — products or services purchased with consumers’ discretionary dollars. The Fund emphasizes stocks of cable television, publishing, cruise line, advertising, hotel, casino, electronic game and toy manufacturing, restaurant, retailing and entertainment companies.

     Stock selection is based on a research driven bottom-up investment approach focusing on company fundamentals and growth prospects. Quantitative screens are used to help identify attractive stock candidates within the universe of leisure-related companies. Portfolio candidates

Portfolio Composition

By sector

Consumer Discretionary	95.6	%
Consumer Staples	2.4
Information Technology	1.9
Money Market Funds Plus Other Assets
Less Liabilities	0.1

Total Net Assets	$20.9 million
Total Number of Holdings*		59

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.

are further refined by fundamental analysis performed at the company level which includes an evaluation of industry dynamics, competitive intensity and drivers of growth.

     The investment process seeks to identify attractively valued leisure-related companies exhibiting the following characteristics:

n	Attractive revenue growth profile.
n	Strong free cash flow generation.
n	Returns on invested capital in excess of weighted-average cost of capital.
n	Operating in low capital intensity businesses.
n	Management teams that are good stewards of capital.

Top 10 Equity Holdings*

1.	Target Corp.	3.5	%
2.	Marriott International Inc.	3.4
3.	Comcast Corp.	3.2
4.	Amazon.com, Inc.	3.1
5.	Ford Motor Co.	3.1
6.	Walt Disney Co. (The)	2.9
7.	Darden Restaurants, Inc.	2.9
8.	Home Depot, Inc. (The)	2.8
9.	Lowe’s Cos., Inc.	2.7
10.	NIKE, Inc.	2.7

Top Five Industries

1.	Restaurants	12.4	%
2.	Hotels, Resorts & Cruise Lines	9.0
3.	Movies & Entertainment	7.1
4.	Broadcasting	6.5
5.	Cable & Satellite	5.9

     We construct the Fund with the goal of holding from 40 to 75 individual stocks with an average investment horizon of 18 to 24 months. Fund weightings are adjusted based on current economic and industry conditions:

n	A company reaches its price target.
n	A more compelling opportunity is identified.
n	A change in fundamentals occurs — either company specific or industry wide.
n	A stock’s technical profile indicated negative underlying information and is further determined to have violated a fundamental investment thesis.

Market conditions and your Fund

Equity markets were choppy during the fiscal year as investors weighed the competing issues of solid corporate profits and soft macroeconomic data. Corporate earnings were largely positive, but often overshadowed by concerns about high unemployment, a lack of consumer spending, soft housing data and the possibility of additional Federal Reserve accommodation. After rising through April, the major equity indexes sold off precipitously in May as the sovereign debt crisis unfolded in the eurozone while U.S. economic indicators remained weak, prompting fears of a double-dip recession. Uncertainty created by the debt crisis combined with subdued employment, consumer spending and housing data added to concerns that the recovery was slowing to a subnormal growth rate. Just as abruptly, however, the markets reversed course and rallied in September and October on modestly better economic news, ending the year with double-digit gains.

     The major equity indexes garnered positive returns for the fiscal year, and all 10 sectors within the S&P 500 Index posted gains. More economically sensitive sectors such as consumer discretionary, industrials and materials had the highest returns, while the less economically sensitive sectors such as health care had some of the lowest returns.

     The Fund’s underperformance relative to the S&P 500 Consumer Discretionary Index was primarily the result of security selection in the hotels, restaurants and leisure industry. The Fund’s underweight in retailing-focused industries, such as the automobiles industry and internet and catalog retail industry, also detracted as these industries experienced signifi-cant growth during the reporting period. Additionally, the Fund’s overweight in

Invesco V.I. Leisure Fund

internet software and services also hurt relative performance. Top detractors to Fund performance included Google, International Game Technology and (The) Knot. The Fund no longer holds International Game Technology and (The) Knot.

     The Fund’s lack of exposure to diversified consumer services was beneficial from a relative performance standpoint. Security selection and an underweight exposure in the media industry also contributed positively to relative performance during the fiscal year. Additionally, security selection in personal products also positively impacted benchmark-relative performance. Top individual contributors to performance during the period included Marriott International, Interpublic Group, Abercrombie & Fitch and Nike.

     Significant allocation changes during the year included the introduction of automobile exposure to the Fund with the purchase of Ford Motor, Honda Motor and Harley-Davidson. We also increased the Fund’s weight in hotels, restaurants and leisure by purchasing Starbucks, Starwood Hotels & Resorts and PF Chang’s.

     We sought to increase our consumer discretionary exposure and reduce our consumer staples exposure during the fiscal year. Thus, our allocation to beverages was significantly reduced through the sale of Anheuser-Busch, Heineken, Pepsico and Coca-Cola. Additionally, significant trims were made within the textile, apparel and luxury goods industry, and one holding, Carters, was completely sold during the reporting period.

     We believe discretionary spending may continue to improve. However, its rate of growth may lag prior economic recoveries because consumer leverage remains above the long-term average and personal savings, as a percentage of disposable personal income, may remain above recent levels as consumers reduce their leverage. Thrifty consumers may place greater emphasis on the quality of products, not the quantity of products. Consumers may also shift from conspicuous consumption to conscious consumption.

     Finally, sales of luxury and big ticket items are beginning to improve as the stock market rises, housing prices stabilize and consumer confidence recovers from the lows experienced in early 2009.

     As always, we thank you for your continued investment in Invesco V.I. Leisure Fund.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Juan Hartsfield
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Leisure Fund. Mr. Hartsfield joined Invesco in 2004. He earned a B.S. in petroleum engineering from The University of Texas at Austin and an M.B.A. from the University of Michigan.

Jonathan Mueller
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Leisure Fund. Mr. Mueller joined Invesco in 2001. He earned a B.B.A. in accounting from Texas Christian University and an M.B.A. in finance from The University of Texas at Austin. Mr. Mueller is a Certified Public Accountant.

Invesco V.I. Leisure Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Fund and index data from 4/30/02

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (4/30/02)		3.95	%
5	Years	2.64
1	Year	21.88
Series II Shares
Inception		3.72	%
5	Years	2.40
1	Year	21.70

Series II shares incepted on April 30, 2004. Performance shown prior to that date is that of Series I shares, restated to reflect the higher 12b-1 fees applicable to Series II. Series I performance reflects any applicable fee waivers or expense reimbursements. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for

the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.02% and 1.27%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.75% and 2.00%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Leisure Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through

insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2012. See current prospectus for more information.

Invesco V.I. Leisure Fund

Invesco V.I. Leisure Fund’s investment objective is long-term growth of capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

An investment by an underlying fund in ETFs generally presents the same primary risks as an investment in a mutual fund. In addition, ETFs may be subject to the following: (1) a discount of the ETFs shares to its net asset value; (2) failure to develop an active trading market for the ETFs shares; (3) the listing exchange halting trading of the ETFs shares; (4) failure of the ETFs shares to track the referenced index; and (5) holding troubled securities in the referenced index. ETFs may involve duplication of management fees and certain other expenses, as the Fund indirectly bears its proportionate share of any expenses paid by the ETFs in which it invests. Further, certain of the ETFs in which the Fund may invest are leveraged. The more a Fund invests in such leveraged ETFs, the more this leverage will magnify any losses on those investments.

     The Fund’s investments are concentrated in a comparatively narrow segment of the economy, which may make the Fund more volatile.

     The leisure sector depends on consumer discretionary spending, which generally falls during economic downturns. Securities of gambling casinos are often subject to high price volatility and are considered speculative. Video and electronic games are subject to the risk of rapid obsolescence.

     The Fund’s foreign investments will be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     The Fund may invest a large percentage of its assets in a limited number of securities, which could negatively affect the value of the Fund.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

     The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The S&P 500 Consumer Discretionary Index is an unmanaged index considered representative of the consumer discretionary market.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     CPA^® and Certified Public Accountant^® are trademarks owned by the American Institute of Certified Public Accountants.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally classified 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.

Invesco V.I. Leisure Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–99.88%
Advertising–4.20%
Interpublic Group of Cos., Inc. (The)(b)		35,308	$	374,971
National CineMedia, Inc.		9,351		186,178
Omnicom Group Inc.		6,907		316,341
				877,490
Apparel Retail–2.62%
Abercrombie & Fitch Co.–Class A		7,362		424,272
Urban Outfitters, Inc.(b)		3,437		123,079
				547,351
Apparel, Accessories & Luxury Goods–3.03%
Coach, Inc.		4,303		237,999
Hanesbrands, Inc.(b)		6,726		170,840
Polo Ralph Lauren Corp.		2,020		224,059
				632,898
Auto Parts & Equipment–4.11%
Autoliv, Inc. (Sweden)		5,540		437,327
Johnson Controls, Inc.		11,055		422,301
				859,628
Automobile Manufacturers–4.95%
Ford Motor Co.(b)		37,981		637,701
Honda Motor Co., Ltd. (Japan)		10,085		398,399
				1,036,100
Automotive Retail–1.92%
CarMax, Inc.(b)		12,628		402,581
Broadcasting–6.53%
CBS Corp.–Class B		12,133		231,134
Discovery Communications, Inc.–Class A(b)		8,210		342,357
Grupo Televisa S.A.–ADR (Mexico)		15,034		389,831
Scripps Networks Interactive Inc.–Class A		7,791		403,184
				1,366,506
Cable & Satellite–5.95%
Comcast Corp., Class A		30,810		676,896
DIRECTV–Class A(b)		8,750		349,387
Time Warner Cable Inc.		3,294		217,503
				1,243,786
Casinos & Gaming–4.98%
Las Vegas Sands Corp.(b)		4,982		228,923
MGM Resorts International(b)		6,011		89,263
Penn National Gaming, Inc.(b)		8,837		310,621
WMS Industries Inc.(b)		9,126		412,860
				1,041,667
Department Stores–4.63%
Kohl’s Corp.(b)		9,917		538,890
Macy’s, Inc.		8,741		221,147
Nordstrom, Inc.		4,933		209,061
				969,098
Footwear–2.68%
NIKE, Inc.–Class B		6,552		559,672
General Merchandise Stores–3.49%
Target Corp.		12,130		729,377
Home Furnishings–1.86%
Mohawk Industries, Inc.(b)		6,873		390,111
Home Improvement Retail–5.55%
Home Depot, Inc. (The)		16,837		590,305
Lowe’s Cos., Inc.		22,758		570,771
				1,161,076
Homefurnishing Retail–0.97%
Bed Bath & Beyond Inc.(b)		4,146		203,776
Hotels, Resorts & Cruise Lines–9.00%
Carnival Corp.(c)		4,705		216,948
Choice Hotels International, Inc.		5,314		203,367
Hyatt Hotels Corp.–Class A(b)		9,350		427,856
Marriott International Inc.–Class A		16,975		705,141
Starwood Hotels & Resorts Worldwide, Inc.		5,422		329,549
				1,882,861
Household Appliances–0.96%
Stanley Black & Decker, Inc.		3,018		201,814
Hypermarkets & Super Centers–1.36%
Costco Wholesale Corp.		3,938		284,363
Internet Retail–4.12%
Amazon.com, Inc.(b)		3,632		653,760
Netflix Inc.(b)		1,180		207,326
				861,086

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Leisure Fund

	Shares		Value
Internet Software & Services–1.94%
Baidu, Inc.–ADR (China)(b)		2,102	$	202,906
Google Inc., Class A(b)		340		201,950
				404,856
Motorcycle Manufacturers–1.12%
Harley-Davidson, Inc.		6,786		235,271
Movies & Entertainment–7.13%
Time Warner Inc.		10,980		353,227
Viacom Inc.–Class A(d)		7,140		327,440
Viacom Inc.–Class B		5,018		198,763
Walt Disney Co. (The)		16,296		611,263
				1,490,693
Restaurants–12.36%
Brinker International, Inc.		15,783		329,549
Buffalo Wild Wings, Inc.(b)		3,572		156,632
Darden Restaurants, Inc.		12,941		600,980
Jack in the Box Inc.(b)		7,763		164,032
McDonald’s Corp.		6,438		494,181
P.F. Chang’s China Bistro, Inc.(d)		5,927		287,222
Starbucks Corp.		17,183		552,090
				2,584,686
Soft Drinks–1.04%
Hansen Natural Corp.(b)		4,171		218,060
Specialty Stores–3.38%
Staples, Inc.		15,772		359,128
Tiffany & Co.		5,598		348,588
				707,716
Total Common Stocks & Other Equity Interests (Cost $15,869,843)				20,892,523
Money Market Funds–0.97%
Liquid Assets Portfolio–Institutional Class(e)		102,057		102,057
Premier Portfolio–Institutional Class(e)		102,057		102,057
Total Money Market Funds (Cost $204,114)				204,114
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.85% (Cost $16,073,957)				21,096,637
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–1.80%
Liquid Assets Portfolio–Institutional Class (Cost $376,320)(e)(f)		376,320		376,320
TOTAL INVESTMENTS–102.65% (Cost $16,450,277)				21,472,957
OTHER ASSETS LESS LIABILITIES–(2.65)%				(555,290	)
NET ASSETS–100.00%			$	20,917,667

Investment Abbreviation:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	Issued in units.
(d)	All or a portion of this security was out on loan at December 31, 2010.
(e)	The money market fund and the Fund are affiliated by having the same investment adviser.
(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.

Invesco V.I. Leisure Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $15,869,843)*	$	20,892,523
Investments in affiliated money market funds, at value and cost		580,434
Total investments, at value (Cost $16,450,277)		21,472,957
Foreign currencies, at value (Cost $669)		663
Receivables for:
Investments sold		7,755
Dividends		21,126
Investment for trustee deferred compensation and retirement plans		11,853
Total assets		21,514,354
Liabilities:
Payable for:
Fund shares reacquired		135,392
Collateral upon return of securities loaned		376,320
Accrued fees to affiliates		38,434
Accrued other operating expenses		31,656
Trustee deferred compensation and retirement plans		14,885
Total liabilities		596,687
Net assets applicable to shares outstanding	$	20,917,667
Net assets consist of:
Shares of beneficial interest	$	19,930,506
Undistributed net investment income		55,122
Undistributed net realized gain (loss)		(4,090,543	)
Unrealized appreciation		5,022,582
	$	20,917,667
Net Assets:
Series I	$	20,771,751
Series II	$	145,916
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		2,616,619
Series II		18,411
Series I:
Net asset value per share	$	7.94
Series II:
Net asset value per share	$	7.93

*  At December 31, 2010, securities with an aggregate value of $369,054 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $994)	$	271,420
Dividends from affiliated money market funds (includes securities lending income of $12,804)		13,053
Total investment income		284,473
Expenses:
Advisory fees		149,777
Administrative services fees		99,868
Custodian fees		14,582
Distribution fees — Series II		176
Transfer agent fees		2,899
Trustees’ and officers’ fees and benefits		16,315
Professional services fees		33,177
Other		13,540
Total expenses		330,334
Less: Fees waived and expenses reimbursed		(128,782	)
Net expenses		201,552
Net investment income		82,921
Realized and unrealized gains (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains from securities sold to affiliates of $21,255)		1,767,542
Foreign currencies		(12,050	)
		1,755,492
Change in net unrealized appreciation (depreciation) of:
Investment securities		2,139,838
Foreign currencies		(9	)
		2,139,829
Net realized and unrealized gain		3,895,321
Net increase in net assets resulting from operations	$	3,978,242

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Leisure Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	82,921		$	127,249
Net realized gain (loss)		1,755,492			(3,631,778	)
Change in net unrealized appreciation		2,139,829			8,741,336
Net increase in net assets resulting from operations		3,978,242			5,236,807
Distributions to shareholders from net investment income:
Series I		(104,603	)		(347,842	)
Series II		(460	)		(128	)
Total distributions from net investment income		(105,063	)		(347,970	)
Share transactions–net:
Series I		(3,420,143	)		(2,556,830	)
Series II		122,973			1,158
Net increase (decrease) in net assets resulting from share transactions		(3,297,170	)		(2,555,672	)
Net increase in net assets		576,009			2,333,165
Net assets:
Beginning of year		20,341,658			18,008,493
End of year (includes undistributed net investment income of $55,122 and $89,315, respectively)	$	20,917,667		$	20,341,658

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Leisure Fund, (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as

Invesco V.I. Leisure Fund

	institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the

Invesco V.I. Leisure Fund

	financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Other Risks — The Fund’s investments are concentrated in a comparatively narrow segment of the economy, which may make the Fund more volatile.
	The leisure sector depends on consumer discretionary spending, which generally falls during economic downturns. Securities of gambling casinos are often subject to high price volatility and are considered speculative. Securities of companies that make video and electronic games may be affected by the games’ risk of rapid obsolescence.
J.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
K.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
L.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

Invesco V.I. Leisure Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.75%
Next $250 million		0	.74%
Next $500 million		0	.73%
Next $1.5 billion		0	.72%
Next $2.5 billion		0	.71%
Next $2.5 billion		0	.70%
Next $2.5 billion		0	.69%
Over $10 billion		0	.68%

  Under the terms of master intergroup sub-advisory contracts between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 1.01% and Series II shares to 1.26% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the net annual fund operating expenses to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $128,782.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $49,868 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

  Level 1 — Prices are determined using quoted prices in an active market for identical assets.

Invesco V.I. Leisure Fund

Level 2 —

Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.

Level 3 —

Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	21,074,558	$	398,399	$	—	$	21,472,957

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been

  designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $198,203 and securities sales of $150,339, which resulted in net realized gains of $21,255.

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $2,529 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	105,063	$	347,970

Invesco V.I. Leisure Fund

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	69,788
Net unrealized appreciation — investments		5,002,245
Net unrealized appreciation (depreciation) — other investments		(97	)
Temporary book/tax differences		(13,815	)
Capital loss carryforward		(4,070,110	)
Post-October deferrals		(850	)
Shares of beneficial interest		19,930,506
Total net assets	$	20,917,667

  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 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 utilized $1,756,906 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2017	$	4,070,110

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $11,625,688 and $14,768,102, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	5,068,879
Aggregate unrealized (depreciation) of investment securities		(66,634	)
Net unrealized appreciation of investment securities	$	5,002,245
Cost of investments for tax purposes is $16,470,712

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, on December 31, 2010, undistributed net investment income was decreased by $12,051 and undistributed net realized gain (loss) was increased by $12,051. This reclassification had no effect on the net assets of the Fund.

Invesco V.I. Leisure Fund

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		28,641		$	201,622			15,116		$	86,339
Series II		28,815			204,872			195			1,057
Issued as reinvestment of dividends:
Series I		14,816			104,602			54,350			347,842
Series II		65			460			20			128
Reacquired:
Series I		(531,332	)		(3,726,367	)		(553,001	)		(2,991,011	)
Series II		(11,814	)		(82,359	)		(5	)		(27	)
Net increase (decrease) in share activity		(470,809	)	$	(3,297,170	)		(483,325	)	$	(2,555,672	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 99% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																												Ratio of			Ratio of
																												expenses			expenses
						Net gains																						to average			to average net			Ratio of net
	Net asset					(losses) on						Dividends			Distributions													net assets			assets without			investment
	value,		Net			securities (both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment			realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income			unrealized)			operations			income			gains			Distributions			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/10	$	6.55	$	0.03	(c)	$	1.40		$	1.43		$	(0.04	)	$	—		$	(0.04	)	$	7.94		21.88	%	$	20,772		1.01	%(d)		1.65	%(d)		0.41	%(d)		59	%
Year ended 12/31/09		5.02		0.04	(c)		1.60			1.64			(0.11	)		—			(0.11	)		6.55		32.78			20,333		1.01			1.74			0.69			61
Year ended 12/31/08		12.67		0.12	(c)		(5.67	)		(5.55	)		(0.12	)		(1.98	)		(2.10	)		5.02		(43.04	)		18,003		1.01			1.44			1.15			7
Year ended 12/31/07		13.82		0.09			(0.15	)		(0.06	)		(0.24	)		(0.85	)		(1.09	)		12.67		(0.79	)		42,593		1.01			1.28			0.50			15
Year ended 12/31/06		11.86		0.07			2.83			2.90			(0.16	)		(0.78	)		(0.94	)		13.82		24.61			52,820		1.01			1.26			0.54			14
Series II
Year ended 12/31/10		6.55		0.01	(c)		1.41			1.42			(0.04	)		—			(0.04	)		7.93		21.70			146		1.26	(d)		1.90	(d)		0.16	(d)		59
Year ended 12/31/09		5.02		0.02	(c)		1.61			1.63			(0.10	)		—			(0.10	)		6.55		32.47			9		1.26			1.99			0.44			61
Year ended 12/31/08		12.63		0.09	(c)		(5.64	)		(5.55	)		(0.08	)		(1.98	)		(2.06	)		5.02		(43.17	)		6		1.26			1.69			0.90			7
Year ended 12/31/07		13.78		0.05			(0.15	)		(0.10	)		(0.20	)		(0.85	)		(1.05	)		12.63		(1.13	)		9		1.26			1.53			0.25			15
Year ended 12/31/06		11.84		0.04			2.82			2.86			(0.14	)		(0.78	)		(0.92	)		13.78		24.28			14		1.26			1.51			0.29			14

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Calculated using average shares outstanding.
(d)	Ratios are based on average daily net assets (000’s omitted) of $19,900 and $70 for Series I and Series II shares, respectively.

Invesco V.I. Leisure Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Leisure Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Leisure Fund (formerly known as AIM V.I. Leisure Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Leisure Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,287.60	$	5.82	$	1,020.11	$	5.14		1.01	%
Series II		1,000.00		1,285.70		7.26		1,018.85		6.41		1.26

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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 183/365 to reflect the most recent fiscal half year.

Invesco V.I. Leisure 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Reduction*	100%

*  The above percentage is based on income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Leisure Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Mid Cap Core Equity Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VIMCCE-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the 12 months ended December 31, 2010, Invesco V.I. Mid Cap Core Equity Fund lagged the broad market, as measured by the S&P 500 Index, and the Russell Midcap Index, the Fund’s style-specific benchmark. The Fund’s underweight to the consumer discretionary sector and significant underweight in real estate investment trusts (REITs) in the financials sector also largely explains why it trailed the Russell Midcap Index. The Fund’s large allocation to cash detracted from relative returns in a rising market environment. Although the Fund’s overweight position in the health care sector detracted from results relative to the benchmark, it was a positive contributor to the Fund’s absolute returns. The industrials and energy sectors were also strong contributors to the Fund’s absolute returns.

     The Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	14.11	%
Series II Shares	13.78
S&P 500 Index▼ (Broad Market Index)	15.08
Russell Midcap Index▼ (Style-Specific Index)	25.48
Lipper VUF Mid-Cap Core Funds Index▼ (Peer Group)	24.74

^▼ Lipper Inc.

How we invest

We seek to manage your Fund using a conservative approach to mid-cap stock investing. We seek to provide attractive upside participation during buoyant equity markets and a measure of downside protection during weak equity markets. As part of a well-diversified asset allocation strategy, the Fund may complement more aggressive or cyclical investment strategies.

     We conduct thorough fundamental research of companies and their businesses to gain a deeper understanding of their prospects, growth potential and return on invested capital (ROIC) characteristics. The process we use to identify potential investments for the Fund includes three phases: financial analysis, business analysis and valuation analysis.

     Financial analysis provides insights into historical returns on invested capital, a key indicator of business quality, and historical capital allocation, a key indicator

of management quality. Business analysis, which evaluates the competitive landscape and any structural or cyclical business opportunities or threats, allows us to identify key revenue, profit and return drivers of the company. Both the financial and business analyses serve as a basis to construct valuation models that help us appraise a company’s fair value. In our valuation analysis, we use three primary techniques, including discounted cash flow, traditional valuation multiples and net asset value.

     We consider selling a stock when it exceeds our target price, we have not seen a demonstrable improvement in fundamentals or a more compelling investment opportunity exists.

Market conditions and your Fund

Equity markets were volatile during 2010 as investors weighed the competing issues of solid corporate profits and soft macroeconomic data. Corporate earnings

were largely positive, but often overshadowed by concerns about high unemployment, a lack of consumer spending, soft housing data and the possibility of additional U.S. Federal Reserve accommodation. After rising through April, the major equity indexes sold off precipitously in May as the sovereign debt crisis unfolded in the eurozone while U.S. economic indicators remained weak, prompting concerns of a double-dip recession. Uncertainty created by the debt crisis combined with subdued employment, consumer spending and housing data added to concerns that the recovery was slowing to a sub-normal growth rate. Just as abruptly, however, markets reversed course and rallied again during the last four months of the year on better economic news, ending the year with double-digit gains.

     All 10 sectors within the S&P 500 Index posted gains for the year. The more economically sensitive sectors such as consumer discretionary, industrials and materials had the highest returns, while the less economically sensitive sectors such as health care and utilities had some of the lowest returns.

     Commercial vehicle parts supplier WABCO Holdings was the largest contributor to Fund returns for the period, as shares of the company more than doubled during the year. The company’s earnings rose steadily throughout the year as growth in truck and bus production accelerated across the company’s geographic business segments; the company’s operations in Europe, South America, China, India and Brazil experienced double-digit growth. Both new vehicle technology and after-market sales increased, while operating margins improved, a result of the company’s prior year cost-cutting efforts.

     Smith International, a diversified oilfield services company, was another contributor to Fund results. The company’s

Portfolio Composition

By sector

Industrials	19.3	%
Health Care	17.4
Information Technology	12.2
Financials	11.3
Energy	8.3
Consumer Staples	6.3
Materials	6.1
Consumer Discretionary	5.8
Telecommunication Services	1.1
Utilities	1.1
Money Market Funds Plus
Other Assets Less Liabilities	11.1

Top 10 Equity Holdings*

1.	Symantec Corp.	3.0	%
2.	ITT Corp.	2.6
3.	Safeway Inc.	2.6
4.	Boston Scientific Corp.	2.3
5.	Northern Trust Corp.	2.3
6.	Hologic, Inc.	1.9
7.	Legg Mason, Inc.	1.8
8.	Sigma-Aldrich Corp.	1.7
9.	People’s United Financial Inc.	1.6
10.	Alliant Techsystems Inc.	1.6

Total Net Assets	$473.4 million
Total Number of Holdings*		100

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.

Invesco V.I. Mid Cap Core Equity Fund

merger with Schlumberger was finalized in the third quarter of 2010. We held our shares of the company through the end of the acquisition, and also retained a position in Schlumberger.

     H&R Block was the largest detractor from Fund returns as the company faced both cyclical and secular pressures. While the high unemployment rate lowered the number of tax filers, H&R Block continued to cede market share to less expensive online tax preparation providers and smaller independent providers. Shares were also negatively affected by the ongoing regulatory uncertainties with regards to mortgage repurchase liability. We sold our position in the company.

     Medical device maker Boston Scientific was another key detractor from Fund returns. Early in the year, the company reported disappointing earnings results due to eroding profit margins, and management reduced its growth outlook for 2010 as a result. In addition, sales for one of the firm’s ICD (implantable cardioverter-defibrillator) devices were halted during the period, thus weighing on the company’s stock price. However, we believe the new management team has made progress in turning around the company, and we added to our investment on weakness during the year.

     Maintaining a conservative approach is an enduring part of our investment philosophy. Amid the market’s volatility, we sought judicious long-term investments in high quality businesses. During the year, we increased our exposure to the consumer discretionary, materials, financials and industrials sectors, and reduced exposure to the health care and consumer staples sectors. These moves increased the number of holdings in the Fund, and at the end of the year, the Fund’s largest sector weightings were in information technology, health care, financials and industrials.

     Over the past year, we witnessed significant dissonance in the market between strong corporate earnings and weak or erratic macro-economic data. At some point during this period, we believe we reached a crossroads in the current market cycle: In our view, we have likely entered a phase in which the economy is transitioning from recovery to possible expansion, or at least economic sustainability. Historically, as part of these transitions, market leadership typically shifts from early cycle to late cycle companies where profit stability, earnings visibility and positive — albeit modest — growth companies are favored. We believe this transition created good opportunities for investors to upgrade the quality of their equity exposure.

     Regardless of market conditions, our goal remains the same: To serve as a conservative cornerstone for your mid-cap stock investment allocation, seeking to provide upside participation with a measure of downside protection, so that over a full market cycle we have the potential to deliver strong investment results with reduced risk relative to the benchmarks. As always, we thank you for your continued investment in Invesco V.I. Mid Cap Core Equity Fund.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Ronald Sloan
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Mid Cap Core Equity Fund. Mr. Sloan has worked in the investment industry since 1971 and joined Invesco in 1998. Mr. Sloan attended the University of Missouri, where he earned both a B.S. in business administration and an M.B.A.

Douglas Asiello
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Mid Cap Core Equity Fund. He joined Invesco in 2001. Mr. Asiello graduated summa cum laude with Phil Beta Kappa honors from Vanderbilt University, where he earned a B.A. in international relations and Spanish. He earned an M.B.A. with a concentration in finance from the Wharton School at the University of Pennsylvania. He also earned an M.A. in international management from the Joseph H. Lauder Institute of Management and International Studies.

Brian Nelson
Chartered Financial Analyst, portfolio manager, is manager of AIM V.I. Mid Cap Core Equity Fund. He began his investment career in 1988 and joined Invesco in 2004. He earned a B.A. from the University of California-Santa Barbara and is a member of the CFA Society of San Francisco.

Assisted by the Invesco U.S. Core Team

Invesco V.I. Mid Cap Core Equity Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Classes since Inception

Index data from 8/31/01, Fund data from 9/10/01

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (9/10/01)			7.30	%
	5	Years	5.30
	1	Year	14.11
Series II Shares
Inception (9/10/01)			7.04	%
	5	Years	5.03
	1	Year	13.78

The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses,

reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.07% and 1.32%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Mid Cap Core Equity Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent

the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco automated information line, 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

Invesco V.I. Mid Cap Core Equity Fund

Invesco V.I. Mid Cap Core Equity Fund’s investment objective is long-term growth of capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

     An investment by the Fund in ETFs generally presents the same primary risks as an investment in a mutual fund. In addition, ETFs may be subject to the following: a discount of the ETF’s shares to its net asset value; failure to develop an active trading market for the ETF’s shares; the listing exchange halting trading of the ETF’s shares; failure of the ETF’s shares to track the referenced index; and holding troubled securities in the referenced index. ETFs may involve duplication of management fees and certain other expenses, as the fund indirectly bears its proportionate share of any expenses paid by the ETFs in which it invests. Further, certain of the ETFs in which each fund may invest are leveraged. The more a fund invests in such leveraged ETFs, the more this leverage will magnify any losses on those investments.

     The Fund’s foreign investments may be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa.

     The issuer of instruments in which the Fund invests may be unable to meet interest and/or principal payments, thereby causing its instruments to decrease in value and lowering the issuer’s credit rating.

     The Fund may invest in obligations issued by U.S. government agencies and instrumentalities that may receive varying levels of support from the government, which could affect the fund’s ability to recover should they default.

     Stocks of small and mid-sized companies tend to be more vulnerable to adverse developments in the above factors and may have little or no operating history or track record of success, and limited product lines, markets, management and financial resources. The securities of small and mid-sized companies may be more volatile due to less market interest and less publicly available information about the issuer. They also may be illiquid or restricted as to resale, or may trade less frequently and in smaller volumes, all of which may cause difficulty when establishing or closing a position at a desirable price.

     Holding cash or cash equivalents may negatively affect performance.

     The investment techniques and risk analysis used by the fund’s portfolio managers may not produce the desired results.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Russell Midcap^® Index is an unmanaged index considered representative of mid-cap stocks. The Russell Midcap Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Lipper VUF Mid-Cap Core Funds Index is an unmanaged index considered representative of mid-cap core variable insurance underlying funds tracked by Lipper.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Mid Cap Core Equity Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–88.86%
Aerospace & Defense–7.08%
Alliant Techsystems Inc.		102,563	$	7,633,764
Goodrich Corp.		47,374		4,172,228
ITT Corp.		239,867		12,499,470
Moog Inc.–Class A(b)		106,504		4,238,859
Precision Castparts Corp.		35,776		4,980,377
				33,524,698
Air Freight & Logistics–0.95%
Expeditors International of Washington, Inc.		82,679		4,514,273
Apparel Retail–1.25%
American Eagle Outfitters, Inc.		405,672		5,934,981
Apparel, Accessories & Luxury Goods–1.79%
Carter’s, Inc.(b)		229,397		6,769,506
True Religion Apparel, Inc.(b)		75,609		1,683,056
				8,452,562
Application Software–1.20%
Adobe Systems Inc.(b)		184,977		5,693,592
Asset Management & Custody Banks–4.10%
Legg Mason, Inc.		240,800		8,733,816
Northern Trust Corp.		192,582		10,670,969
				19,404,785
Automotive Retail–0.28%
Pep Boys (The)-Manny, Moe & Jack		98,218		1,319,068
Biotechnology–1.59%
Biogen Idec Inc.(b)		71,652		4,804,267
Genzyme Corp.(b)		38,005		2,705,956
				7,510,223
Brewers–0.94%
Molson Coors Brewing Co.–Class B		88,614		4,447,537
Communications Equipment–1.47%
Motorola Solutions, Inc.(b)		766,393		6,951,184
Computer & Electronics Retail–0.21%
Best Buy Co., Inc.		29,486		1,011,075
Computer Storage & Peripherals–0.27%
NetApp, Inc.(b)		22,901		1,258,639
Construction & Engineering–1.03%
Chicago Bridge & Iron Co. N.V.–New York Shares(b)		148,698		4,892,164
Construction Materials–0.73%
CRH PLC (Ireland)		167,208		3,465,394
Construction, Farm Machinery & Heavy Trucks–1.59%
Terex Corp.(b)		201,631		6,258,626
WABCO Holdings Inc.(b)		21,213		1,292,508
				7,551,134
Data Processing & Outsourced Services–0.76%
Western Union Co. (The)		192,981		3,583,657
Department Stores–0.46%
Macy’s, Inc.		85,782		2,170,285
Distributors–0.16%
Genuine Parts Co.		15,037		772,000
Electric Utilities–0.97%
Edison International		118,852		4,587,687
Electrical Components & Equipment–1.84%
Cooper Industries PLC (Ireland)		64,968		3,786,985
Thomas & Betts Corp.(b)		101,950		4,924,185
				8,711,170
Electronic Manufacturing Services–0.71%
Molex Inc.(c)		148,034		3,363,332
Environmental & Facilities Services–1.28%
Republic Services, Inc.		202,466		6,045,635
Fertilizers & Agricultural Chemicals–0.48%
Scotts Miracle-Gro Co. (The)–Class A		44,691		2,268,962
Food Retail–3.07%
Kroger Co. (The)		95,913		2,144,615
Safeway Inc.		550,056		12,370,759
				14,515,374
Gas Utilities–0.14%
UGI Corp.		21,717		685,823
Health Care Equipment–6.15%
Boston Scientific Corp.(b)		1,454,258		11,008,733
Hologic, Inc.(b)		469,199		8,830,325
Teleflex Inc.		36,387		1,957,985
Zimmer Holdings, Inc.(b)		136,668		7,336,338
				29,133,381

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Mid Cap Core Equity Fund

	Shares		Value
Health Care Facilities–1.03%
Rhoen-Klinikum AG (Germany)		125,735	$	2,768,941
VCA Antech, Inc.(b)		90,444		2,106,441
				4,875,382
Health Care Services–3.08%
DaVita, Inc.(b)		79,335		5,512,989
Laboratory Corp. of America Holdings(b)		43,893		3,859,073
Quest Diagnostics Inc.		96,138		5,188,568
				14,560,630
Household Products–0.66%
Energizer Holdings, Inc.(b)		42,593		3,105,030
Hypermarkets & Super Centers–1.58%
BJ’s Wholesale Club, Inc.(b)		156,236		7,483,704
Industrial Conglomerates–0.55%
Tyco International Ltd.		62,664		2,596,796
Industrial Gases–0.14%
Air Products & Chemicals, Inc.		7,555		687,127
Industrial Machinery–2.56%
Actuant Corp.–Class A		97,323		2,590,738
Danaher Corp.		19,064		899,249
Pall Corp.		42,365		2,100,457
Parker Hannifin Corp.		50,612		4,367,815
SPX Corp.		30,308		2,166,719
				12,124,978
Insurance Brokers–1.46%
Marsh & McLennan Cos., Inc.		253,291		6,924,976
Investment Banking & Brokerage–0.71%
Charles Schwab Corp. (The)		196,419		3,360,729
Leisure Products–0.63%
Hasbro, Inc.		62,852		2,965,357
Life & Health Insurance–0.79%
Torchmark Corp.		62,309		3,722,340
Life Sciences Tools & Services–4.36%
Agilent Technologies, Inc.(b)		176,480		7,311,566
Pharmaceutical Product Development, Inc.		241,518		6,554,799
Techne Corp.		31,596		2,074,909
Waters Corp.(b)		60,459		4,698,269
				20,639,543
Managed Health Care–1.44%
Aetna Inc.		219,398		6,693,833
Health Net Inc.(b)		5,348		145,947
				6,839,780
Marine–0.69%
Kirby Corp.(b)		73,786		3,250,273
Metal & Glass Containers–0.40%
Owens-Illinois, Inc.(b)		62,179		1,908,895
Mortgage REIT’s–0.22%
Annaly Capital Management Inc.		58,300		1,044,736
Multi-Sector Holdings–0.19%
PICO Holdings, Inc.(b)		28,327		900,799
Office Electronics–0.22%
Xerox Corp.		88,731		1,022,181
Office Services & Supplies–0.86%
Pitney Bowes Inc.		168,145		4,065,746
Oil & Gas Equipment & Services–4.15%
Baker Hughes Inc.		114,935		6,570,834
Cameron International Corp.(b)		80,599		4,088,787
Dresser-Rand Group, Inc.(b)		128,809		5,485,975
National Oilwell Varco Inc.		31,059		2,088,718
Schlumberger Ltd.		16,981		1,417,914
				19,652,228
Oil & Gas Exploration & Production–2.07%
Newfield Exploration Co.(b)		68,063		4,908,023
PetroQuest Energy, Inc.(b)		19,277		145,156
Pioneer Natural Resources Co.		7,591		659,051
Southwestern Energy Co.(b)		109,878		4,112,733
				9,824,963
Oil & Gas Refining & Marketing–0.62%
Valero Energy Corp.		127,937		2,957,903
Oil & Gas Storage & Transportation–1.43%
Williams Cos., Inc. (The)		273,801		6,768,361
Paper Packaging–1.01%
Sealed Air Corp.		187,458		4,770,806
Personal Products–0.10%
Avon Products, Inc.		15,614		453,743
Pharmaceuticals–1.33%
Hospira, Inc.(b)		63,622		3,543,109
Teva Pharmaceutical Industries Ltd.–ADR (Israel)		52,822		2,753,611
				6,296,720
Property & Casualty Insurance–1.68%
Axis Capital Holdings Ltd.		19,675		705,939
Progressive Corp. (The)		363,861		7,229,918
				7,935,857

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Mid Cap Core Equity Fund

	Shares		Value
Research & Consulting Services–0.41%
Dun & Bradstreet Corp. (The)		23,706	$	1,946,026
Restaurants–0.70%
Darden Restaurants, Inc.		71,307		3,311,497
Semiconductor Equipment–0.44%
FormFactor Inc.(b)		232,197		2,061,909
Semiconductors–2.50%
Linear Technology Corp.		207,062		7,162,275
Microchip Technology Inc.(c)		70,224		2,402,363
Xilinx, Inc.		78,155		2,264,932
				11,829,570
Specialized Finance–0.54%
Moody’s Corp.		95,682		2,539,400
Specialty Chemicals–3.30%
International Flavors & Fragrances Inc.		137,260		7,630,283
Sigma-Aldrich Corp.		119,826		7,975,619
				15,605,902
Systems Software–3.07%
CA, Inc.		22,196		542,470
Symantec Corp.(b)		836,869		14,009,187
				14,551,657
Thrifts & Mortgage Finance–1.63%
People’s United Financial Inc.		551,642		7,728,504
Trucking–0.71%
Con-way Inc.		92,273		3,374,424
Wireless Telecommunication Services–1.10%
MetroPCS Communications, Inc.(b)		411,930		5,202,676
Total Common Stocks & Other Equity Interests (Cost $328,132,915)				420,659,763
Money Market Funds–13.65%
Liquid Assets Portfolio–Institutional Class(d)		32,302,319		32,302,319
Premier Portfolio–Institutional Class(d)		32,302,319		32,302,319
Total Money Market Funds (Cost $64,604,638)				64,604,638
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–102.51% (Cost $392,737,553)				485,264,401
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–0.75%
Liquid Assets Portfolio–Institutional Class (Cost $3,568,190)(d)(e)		3,568,190		3,568,190
TOTAL INVESTMENTS–103.26% (Cost $396,305,743)				488,832,591
OTHER ASSETS LESS LIABILITIES–(3.26)%				(15,433,018	)
NET ASSETS–100.00%			$	473,399,573

Investment Abbreviations:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	All or a portion of this security was out on loan at December 31, 2010.
(d)	The money market fund and the Fund are affiliated by having the same investment adviser.
(e)	The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1I.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Mid Cap Core Equity Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $328,132,915)*	$	420,659,763
Investments in affiliated money market funds, at value and cost		68,172,828
Total investments, at value (Cost $396,305,743)		488,832,591
Receivable for:
Fund shares sold		125,996
Dividends		444,819
Investment for trustee deferred compensation and retirement plans		23,261
Total assets		489,426,667
Liabilities:
Payable for:
Fund shares reacquired		11,731,561
Collateral upon return of securities loaned		3,568,190
Accrued fees to affiliates		612,980
Accrued other operating expenses		40,443
Trustee deferred compensation and retirement plans		73,920
Total liabilities		16,027,094
Net assets applicable to shares outstanding	$	473,399,573
Net assets consist of:
Shares of beneficial interest	$	413,564,041
Undistributed net investment income		1,024,635
Undistributed net realized gain (loss)		(33,715,723	)
Unrealized appreciation		92,526,620
	$	473,399,573
Net Assets:
Series I	$	411,812,116
Series II	$	61,587,457
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		33,248,726
Series II		5,014,390
Series I:
Net asset value per share	$	12.39
Series II:
Net asset value per share	$	12.28

*  At December 31, 2010, securities with an aggregate value of $3,480,231 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $49,336)	$	5,844,679
Dividends from affiliated money market funds (includes securities lending income of $23,595)		118,551
Total investment income		5,963,230
Expenses:
Advisory fees		3,384,323
Administrative services fees		1,273,541
Custodian fees		17,846
Distribution fees — Series II		137,688
Transfer agent fees		31,903
Trustees’ and officers’ fees and benefits		28,247
Other		52,970
Total expenses		4,926,518
Less: Fees waived		(112,810	)
Net expenses		4,813,708
Net investment income		1,149,522
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains from securities sold to affiliates of $674,870)		41,002,526
Foreign currencies		(54,385	)
Foreign currency contracts		257,196
		41,205,337
Change in net unrealized appreciation (depreciation) of:
Investment securities		18,526,310
Foreign currencies		1,559
Foreign currency contracts		(112,609	)
		18,415,260
Net realized and unrealized gain		59,620,597
Net increase in net assets resulting from operations	$	60,770,119

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Mid Cap Core Equity Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	1,149,522		$	2,434,222
Net realized gain (loss)		41,205,337			(61,873,895	)
Change in net unrealized appreciation		18,415,260			174,517,834
Net increase in net assets resulting from operations		60,770,119			115,078,161
Distributions to shareholders from net investment income:
Series I		(2,274,130	)		(5,080,173	)
Series II		(186,084	)		(530,907	)
Total distributions from net investment income		(2,460,214	)		(5,611,080	)
Distributions to shareholders from net realized gains:
Series I		—			(4,902,328	)
Series II		—			(669,176	)
Total distributions from net realized gains		—			(5,571,504	)
Share transactions–net:
Series I		(71,565,903	)		(11,987,008	)
Series II		(1,706,198	)		(4,824,114	)
Net increase (decrease) in net assets resulting from share transactions		(73,272,101	)		(16,811,122	)
Net increase (decrease) in net assets		(14,962,196	)		87,084,455
Net assets:
Beginning of year		488,361,769			401,277,314
End of year (includes undistributed net investment income of $1,024,635 and $2,389,712, respectively)	$	473,399,573		$	488,361,769

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Mid Cap Core Equity Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).

Invesco V.I. Mid Cap Core Equity Fund

	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.

Invesco V.I. Mid Cap Core Equity Fund

	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

Invesco V.I. Mid Cap Core Equity Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $500 million		0	.725%
Next $500 million		0	.70%
Next $500 million		0	.675%
Over $1.5 billion		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 Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $112,810.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $117,365 for accounting and fund administrative services and reimbursed $1,156,176 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.

Invesco V.I. Mid Cap Core 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 Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	488,832,591	$	—	$	—	$	488,832,591

NOTE 4—Derivative Investments

The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Effect of Derivative Instruments for the year ended December 31, 2010

The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on Statement of Operations
	Foreign Currency Contracts*
Realized Gain
Currency risk	$	257,196
Change in Unrealized Appreciation (Depreciation)
Currency risk		(112,609	)
Total	$	144,587

*  The average value of foreign currency contracts outstanding during the period was $290,305.

NOTE 5—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $12,589,221 and securities sales of $10,717,006, which resulted in net realized gains of $674,870.

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $3,643 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 7—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

Invesco V.I. Mid Cap Core Equity Fund

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	2,460,214	$	5,621,148
Long-term capital gain		—		5,561,436
Total distributions	$	2,460,214	$	11,182,584

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	1,096,457
Net unrealized appreciation — investments		89,287,047
Net unrealized appreciation (depreciation) — other investments		(228	)
Temporary book/tax differences		(71,822	)
Capital loss carryforward		(30,475,922	)
Shares of beneficial interest		413,564,041
Total net assets	$	473,399,573

  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 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 utilized $40,263,751 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2017	$	30,475,922

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $242,761,560 and $306,438,392, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	91,482,380
Aggregate unrealized (depreciation) of investment securities		(2,195,333	)
Net unrealized appreciation of investment securities	$	89,287,047
Cost of investments for tax purposes is $399,545,544.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, on December 31, 2010, undistributed net investment income was decreased by $54,385 and undistributed net realized gain (loss) was increased by $54,385. This reclassification had no effect on the net assets of the Fund.

Invesco V.I. Mid Cap Core Equity Fund

NOTE 11—Share Information

	Summary of Share Activity
	Years ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		1,854,251		$	21,138,305			3,776,568		$	34,511,811
Series II		2,043,008			22,984,219			1,852,803			16,828,951
Issued as reinvestment of dividends:
Series I		201,607			2,274,130			939,088			9,982,501
Series II		16,630			186,084			113,860			1,200,083
Reacquired:
Series I		(8,395,150	)		(94,978,338	)		(6,211,044	)		(56,481,320	)
Series II		(2,228,501	)		(24,876,501	)		(2,477,573	)		(22,853,148	)
Net increase (decrease) in share activity		(6,508,155	)	$	(73,272,101	)		(2,006,298	)	$	(16,811,122	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 74% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																													Ratio of			Ratio of
						Net gains																							expenses			expenses
						(losses)																							to average			to average net			Ratio of net
	Net asset					on securities							Dividends			Distributions													net assets			assets without			investment
	value,		Net			(both			Total from				from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment			realized and			investment				investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income			unrealized)			operations				income			gains			Distributions			of period		return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/10	$	10.92	$	0.03	(c)	$	1.50		$	1.53			$	(0.06	)	$	—		$	(0.06	)	$	12.39		14.11	%	$	411,812		1.01	%(d)		1.03	%(d)		0.27	%(d)		61	%
Year ended 12/31/09		8.59		0.06	(c)		2.53			2.59				(0.13	)		(0.13	)		(0.26	)		10.92		30.21			432,233		1.02			1.04			0.60			41
Year ended 12/31/08		14.57		0.14	(c)		(4.33	)		(4.19	)			(0.22	)		(1.57	)		(1.79	)		8.59		(28.52	)		352,788		1.01			1.04			1.05			62
Year ended 12/31/07		13.52		0.19			1.11			1.30		��		(0.04	)		(0.21	)		(0.25	)		14.57		9.55			585,608		1.00			1.01			1.23			62
Year ended 12/31/06		13.61		0.14			1.39			1.53				(0.14	)		(1.48	)		(1.62	)		13.52		11.24			581,154		1.04			1.04			0.93			83
Series II
Year ended 12/31/10		10.83		0.00	(c)		1.49			1.49				(0.04	)		—			(0.04	)		12.28		13.78			61,587		1.26	(d)		1.28	(d)		0.02	(d)		61
Year ended 12/31/09		8.52		0.03	(c)		2.51			2.54				(0.10	)		(0.13	)		(0.23	)		10.83		29.85			56,129		1.27			1.29			0.35			41
Year ended 12/31/08		14.45		0.10	(c)		(4.28	)		(4.18	)			(0.18	)		(1.57	)		(1.75	)		8.52		(28.68	)		48,489		1.26			1.29			0.80			62
Year ended 12/31/07		13.42		0.13			1.12			1.25				(0.01	)		(0.21	)		(0.22	)		14.45		9.29			79,079		1.25			1.26			0.98			62
Year ended 12/31/06		13.52		0.10			1.38			1.48				(0.10	)		(1.48	)		(1.58	)		13.42		10.98			56,766		1.29			1.29			0.68			83

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Calculated using average shares outstanding.
(d)	Ratios are based on average daily net assets (000’s) of $411,728 and $55,075 for Series I and Series II shares, respectively.

Invesco V.I. Mid Cap Core Equity Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Mid Cap Core Equity Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Mid Cap Core Equity Fund, (formerly known as AIM V.I. Mid Cap Core Equity; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Mid Cap Core Equity Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,194.70	$	5.53	$	1,020.16	$	5.09		1.00	%
Series II		1,000.00		1,191.70		6.91		1,018.90		6.36		1.25

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Mid Cap Core 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Mid Cap Core Equity Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Money Market Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VIMKT-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion

Fund information

This annual report on the performance of Invesco V.I. Money Market Fund covers the 12 months ended December 31, 2010.

     As of December 31, 2010:

n	The Fund had 23 holdings.
n	The Fund’s net assets totaled $26.6 million.
n	The Fund’s weighted average maturity was 16.76 days.
n	The Fund’s weighted average life was 16.76 days.

How we invest

Your Fund invests only in high-quality U.S. dollar-denominated short-term fixed-income obligations. During the fiscal year, as always, your Fund focused on three objectives:

n	Safety of principal
n	Liquidity
n	The highest possible yield consistent with safety of principal

Market conditions and your Fund

Economic uncertainty caused investors to seek out relatively safe, liquid and short-term investments for much of the period covered by this report. Strong demand for such investments and the monetary policies of the U.S. Federal Reserve (the Fed) were among the factors that caused yields on money market funds to remain low.

     Although it was somewhat anemic and uneven, the economic expansion that began in the second half of 2009 continued in 2010. Gross domestic product (GDP), the broadest measure of overall U.S. economic activity, rose at annualized rates of 3.7%, 1.7% and 2.6% in the first, second and third quarters of 2010, respectively.¹ The government’s initial estimate, subject to revision, of fourth quarter GDP growth was 3.2%.¹

     Despite this growth in the economy, unemployment remained stubbornly high and hovered near double-digits for most of the year covered by this report. Unemployment stood at 9.7% in January 2010 and declined only modestly to 9.4% by year-end.² Among those who remained in the workforce, job insecurity was widespread – one reason many Americans spent less and saved more of their income.

     In its final interest rate announcement of 2010, the Fed stated that “the economic recovery is continuing, though

at a rate that has been insufficient to bring down unemployment.”³ The Fed added that:

n	Household spending was increasing at a moderate pace but continued to be hampered by high unemployment, modest income growth, lower housing wealth and tight credit.
n	Business spending on equipment was rising, but more slowly than earlier in the year.
n	The housing sector remained depressed.
n	Employers remained reluctant to add to their payrolls.
n	Measures of underlying inflation were somewhat low.

     These were among the factors that prompted the Fed to keep its federal funds target rate unchanged in a range of zero to 0.25% – and among the factors that it said “are likely to warrant exceptionally low levels for the federal funds rate for an extended period.”³

     In early November, the Fed unveiled a plan to expand its purchase of longer term Treasury securities by $600 billion, or $75 billion per month, through mid-2011.³ This second round of “quantitative easing” is intended to force down yields on Treasury bonds (and interest rates closely tied to U.S. Treasury yields), thereby stimulating the economy. An earlier round of quantitative easing, in which the Fed purchased $1.7 trillion of Treasury and mortgage-backed securities between late 2008 and early 2010, was considered crucial in preventing an economic meltdown.⁴

     Over the course of the year covered by this report, yields on short-term Treasury bills increased slightly while yields on long-term bonds declined slightly. From December 31, 2009 to December 31, 2010, yields on three-month Treasury notes rose from 0.07% to 0.13%.⁵ During the same period,

yields on 30-year Treasury bonds declined from 4.64% to 4.35%.⁵ Low yields on short-term Treasuries were chiefly due to the Fed’s accommodative monetary policies – as well as strong investor demand for relatively safe, liquid and short-term investments during a period of economic uncertainty. Because money market funds invest in such securities, the yield you earned on your investment in Invesco V.I. Money Market Fund remained low throughout the period covered by this report.

     On a positive note, at the close of the reporting period, the yield curve was positive (meaning that short-term yields were lower than longer-term yields). A yield curve is a graph that shows the yields of similarly rated fixed income investments according to their maturities. While no one can predict the future performance of the economy, positive yield curves historically have signaled economic expansion.

     Thank you for investing with us.

1	Bureau of Economic Analysis
2	Bureau of Labor Statistics
3	U.S. Federal Reserve
4	The Wall Street Journal
5	Barclays Capital

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Team managed by Invesco Advisers, Inc.

Invesco V.I. Money Market Fund

Invesco V.I. Money Market Fund’s investment objective is to provide as high a level of current income as is consistent with the preservation of capital and liquidity.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa.

     The issuer of instruments in which the Fund invests may be unable to meet interest and/or principal payments, thereby causing its instruments to decrease in value and lowering the issuer’s credit rating.

     The Fund may invest in obligations issued by U.S. government agencies and instrumentalities that may receive varying levels of support from the government, which could affect the Fund’s ability to recover should they default.

     The value of, payment of interest and repayment of principal with respect to, and the ability of the Fund to sell, a municipal security may be affected by constitutional amendments, legislative enactments, executive orders, administrative regulations, voter initiatives, and the issuer’s regional economic conditions. Failure of the issuer of a municipal

security to comply with applicable tax requirements may make income paid thereon taxable, resulting in a decline in the value of such security.

     The Fund’s foreign investments may be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     To the extent that the Fund is concentrated in securities of issuers in the banking and financial services industries, the Fund’s performance will depend to a greater extent on the overall condition of those industries, which may be affected by the following factors: the supply of short-term financing; changes in government regulation and interest rates; and overall economy.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

     The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

     The issuer of instruments in which the Fund invests may be unable to meet interest and/or principal payments, thereby causing its instruments to decrease in value and lowering the issuer’s credit rating.

     If the seller of a repurchase agreement in which the Fund invests defaults on its obligation or declares bankruptcy, the Fund may experience delays in selling the securities underlying the repurchase agreement, resulting in losses.

Portfolio Composition by Maturity

In days, as of 12/31/10

1-7	73.8	%
8-30	11.3
31-60	7.5
61-90	3.8
91-180	3.6

The number of days to maturity of each holding is determined in accordance with the provisions of Rule 2a-7 of the Investment Company Act of 1940.

Invesco V.I. Money Market Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. For the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

Invesco V.I. Money Market Fund

Schedule of Investments

December 31, 2010

						Principal
	Interest			Maturity		Amount
	Rate			Date		(000)		Value
Variable Rate Demand Notes–30.33%(a)
Credit Enhanced–30.33%
Benjamin Rose Institute (The) (Kethley House); Series 2005, VRD Taxable Notes (LOC–JPMorgan Chase Bank, N.A.)(b)		0.34	%		12/01/28	$	1,800	$	1,800,000
Collier (County of), Florida Industrial Development Authority (Allete, Inc.); Series 2006, Ref. VRD IDR (LOC–Wells Fargo Bank, N.A.)(b)		0.40	%		10/01/25		1,000		1,000,000
Hamilton (County of), Ohio (Children’s Hospital Medical Center); Series 1997 A, VRD Hospital Facilities RB (LOC–PNC Bank, N.A.)(b)		0.34	%		05/15/17		600		600,000
Miami-Dade (County of), Florida Industrial Development Authority (Professional Modification Services, Inc.); Series 1998, VRD RB (LOC–JPMorgan Chase Bank, N.A.)(b)		0.40	%		08/01/18		1,000		1,000,000
Nashville (City of) & Davidson (County of), Tennessee Metropolitan Government Industrial Development Board (L & S, LLC); Series 2001, VRD IDR (LOC–JPMorgan Chase Bank, N.A.)(b)		0.34	%		03/01/26		520		520,000
Pitney Road Partners, LLC; Series 2008, VRD Notes (CEP–General Electric Capital Corp.)(c)		0.44	%		07/01/25		2,260		2,260,000
Rock Island (County of), Illinois Metropolitan Airport Authority (Quad City International Airport Air Freight Project); Series 1998 A, VRD Priority RB (LOC–U.S. Bank, N.A.)(b)		0.55	%		12/01/18		390		390,000
St. Paul (City of), Minnesota Port Authority; Series 2009-10 CC, VRD District Cooling RB (LOC–Deutsche Bank AG)(b)(d)		0.30	%		03/01/29		500		500,000
Total Variable Rate Demand Notes (Cost $8,070,000)									8,070,000
Commercial Paper–26.69%(e)
Asset-Backed Securities–Consumer Receivables–3.76%
Thames Asset Global Securitization No. 1, Inc.(c)(d)		0.25	%		01/12/11		1,000		999,924
Asset-Backed Securities–Fully Supported Bank–15.03%
Concord Minutemen Capital Co., LLC–Series A, (Multi-CEP’s-Liberty Hampshire Co., LLC; agent)(c)(d)		0.37	%		02/01/11		1,000		999,681
Crown Point Capital Co., LLC–Series A, (Multi-CEP’s-Liberty Hampshire Co., LLC; agent)(c)(d)		0.40	%		01/05/11		1,000		999,956
Grampian Funding Ltd./LLC (CEP–Lloyds TSB Bank PLC)(c)(d)		0.30	%		02/17/11		1,000		999,608
Lexington Parker Capital Co., LLC (Multi CEP’s-Liberty Hemisphere Co., LLC; agent)(c)(d)		0.40	%		01/11/11		1,000		999,889
									3,999,134
Asset-Backed Securities–Securities–3.76%
Solitaire Funding Ltd./LLC(c)(d)		0.26	%		01/06/11		1,000		999,964
Life & Health Insurance–4.14%
Metlife Short Term Funding LLC(c)		0.25	%		01/05/11		1,100		1,099,969
Total Commercial Paper (Cost $7,098,991)									7,098,991
Certificates of Deposit–15.04%
Barclays Bank PLC		0.33	%		03/02/11		1,000		1,000,000
Deutsche Bank A.G.		0.23	%		01/03/11		1,000		1,000,000
Mitsubishi UFJ Trust & Banking Corp.		0.29	%		01/18/11		1,000		1,000,000
Societe Generale		0.29	%		01/05/11		1,000		1,000,000
Total Certificates of Deposit (Cost $4,000,000)									4,000,000
Medium-Term Notes–3.71%
European Investment Bank, Sr. Unsec. Global MTN(d) (Cost $987,264)		5.25	%		06/15/11		968		987,264
TOTAL INVESTMENTS (excluding Repurchase Agreements)–75.77% (Cost $20,156,255)									20,156,255

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Money Market Fund

	Interest			Maturity		Repurchase
	Rate			Date		Amount		Value
Medium-Term Notes–(continued)
	Interest			Maturity		Repurchase
	Rate			Date		Amount		Value
Repurchase Agreements–24.32%(f)
BMO Capital Markets Corp., Joint agreement dated 12/31/10, aggregate maturing value $940,018,017 (collateralized by U.S. Treasury obligations valued at $958,800,026; 0%-5.00%, 01/27/11-02/15/40),		0.23	%		01/03/11	$	4,069,443	$	4,069,365
BNP Paribas, Joint agreement dated 12/31/10, aggregate maturing value $592,016,280 (collateralized by U.S. Government sponsored agency & Corporate obligations valued at $607,601,359; 0%-7.50%, 11/21/12-01/25/48),		0.33	%		01/03/11		1,200,033		1,200,000
Wells Fargo Securities, LLC, Joint agreement dated 12/31/10, aggregate maturing value $700,014,583 (collateralized by Corporate obligations valued at $735,000,000; 0%-9.13%, 01/05/11-01/01/99),		0.25	%		01/03/11		1,200,025		1,200,000
Total Repurchase Agreements (Cost $6,469,365)									6,469,365
TOTAL INVESTMENTS–100.09% (Cost $26,625,620)(g)(h)									26,625,620
OTHER ASSETS LESS LIABILITIES–(0.09%)									(23,003	)
NET ASSETS–100.00%								$	26,602,617

Investment Abbreviations:

CEP	– Credit Enhancement Provider
IDR	– Industrial Development Revenue Bonds
LOC	– Letter of Credit
MTN	– Medium-Term Notes
RB	– Revenue Bonds
Ref.	– Refunding
Sr.	– Senior
Unsec.	– Unsecured
VRD	– Variable Rate Demand

Notes to Schedule of Investments:

(a)	Demand security payable upon demand by the Fund at specified time intervals no greater than thirteen months. Interest rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2010.
(b)	Principal and interest payments are fully enhanced by a letter of credit from the bank listed or a predecessor bank, branch or subsidiary.
(c)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2010 was $9,358,991, which represented 35.18% of the Fund’s Net Assets.
(d)	The security is credit guaranteed, enhanced or has credit risk by a foreign entity. The foreign credit exposure to countries other than the United States of America (as a percentage of net assets) is summarized as follows: United Kingdom: 22.6%; other countries less than 5% each: 10.1%.
(e)	Security may be traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund.
(f)	Principal amount equals value at period end. See Note 1I.
(g)	Also represents cost for federal income tax purposes.
(h)	This table provides a listing of those entities that have either issued, guaranteed, backed or otherwise enhanced the credit quality of more than 5% of the securities held in the portfolio. In instances where the entity has guaranteed, backed or otherwise enhanced the credit quality of a security, it is not primarily responsible for the issuer’s obligations but may be called upon to satisfy the issuer’s obligations.

Entities	Percentage
JPMorgan Chase Bank, N.A.		12.5	%
Liberty Hampshire Co.		11.3
General Electric Capital Corp.		8.5
Wells Fargo Bank, N.A.		8.3
Deutsche Bank AG		5.6

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Money Market Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, excluding repurchase agreements, at value and cost	$	20,156,255
Repurchase agreements, at value and cost		6,469,365
Total investments, at value and cost		26,625,620
Receivables for:
Fund shares sold		36,571
Interest		5,769
Investment for trustee deferred compensation and retirement plans		41,479
Total assets		26,709,439
Liabilities:
Payable for:
Fund shares reacquired		5,363
Accrued fees to affiliates		23,840
Accrued other operating expenses		27,430
Trustee deferred compensation and retirement plans		50,189
Total liabilities		106,822
Net assets applicable to shares outstanding	$	26,602,617
Net assets consist of:
Shares of beneficial interest	$	26,604,760
Undistributed net realized gain (loss)		(2,143	)
	$	26,602,617
Net Assets:
Series I	$	25,578,381
Series II	$	1,024,236
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		25,579,294
Series II		1,024,040
Series I:
Net asset value per share	$	1.00
Series II:
Net asset value per share	$	1.00

Statement of Operations

For the year ended December 31, 2010

Investment income:
Interest	$	104,373
Expenses:
Advisory fees		122,854
Administrative services fees		102,235
Custodian fees		11,562
Distribution fees – Series II		3,254
Transfer agent fees		6,104
Trustees’ and officers’ fees and benefits		16,769
Professional services fees		37,167
Other		13,511
Total expenses		313,456
Less: Fees waived and expenses reimbursed		(264,754	)
Net expenses		48,702
Net investment income		55,671
Net realized gain (loss) from investment securities		(2,143	)
Net increase in net assets resulting from operations	$	53,528

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Money Market Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	55,671		$	50,085
Net realized gain (loss)		(2,143	)		—
Net increase in net assets resulting from operations		53,528			50,085
Distributions to shareholders from net investment income:
Series I		(53,205	)		(48,846	)
Series II		(2,466	)		(1,239	)
Total distributions from net investment income		(55,671	)		(50,085	)
Share transactions-net:
Series I		(7,905,234	)		(15,518,673	)
Series II		(665,170	)		(576,067	)
Net increase (decrease) in net assets resulting from share transactions		(8,570,404	)		(16,094,740	)
Net increase (decrease) in net assets		(8,572,547	)		(16,094,740	)
Net assets:
Beginning of year		35,175,164			51,269,904
End of year	$	26,602,617		$	35,175,164

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Money Market Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is to provide as high a level of current income as is consistent with the preservation of capital and liquidity.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — The Fund’s securities are recorded on the basis of amortized cost which approximates value as permitted by Rule 2a-7 under the 1940 Act. This method values a security at its cost on the date of purchase and, thereafter, assumes a constant amortization to maturity of any premiums or accretion of any discounts.
	Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income, adjusted for amortization of premiums and accretion of discounts on investments, is recorded on the accrual basis from settlement date. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized gains (losses) on securities per share in the

Invesco V.I. Money Market Fund

	Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates realized and unrealized capital gains and losses to a class based on the relative net assets of each class. The Fund allocates income to a class based on the relative value of the settled shares of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income are declared daily and paid monthly to separate accounts of participating insurance companies. Distributions from net realized gain, if any, are generally paid annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Repurchase Agreements — The Fund may enter into repurchase agreements. Collateral on repurchase agreements, including the Fund’s pro-rata interest in joint repurchase agreements, is taken into possession by the Fund upon entering into the repurchase agreement. Eligible securities for collateral are securities consistent with the Fund’s investment objectives and may consist of U.S. Government Securities, U.S. Government Sponsored Agency Securities and/or, Investment Grade Debt Securities. Collateral consisting of U.S. Government Securities and U.S. Government Sponsored Agency Securities is marked to market daily to ensure its market value is at least 102% of the sales price of the repurchase agreement. Collateral consisting of Investment Grade Debt Securities is marked to market daily to ensure its market value is at least 105% of the sales price of the repurchase agreement. The investments in some repurchase agreements, pursuant to procedures approved by the Board of Trustees, are through participation with other mutual funds, private accounts and certain non-registered investment companies managed by the investment advisor or its affiliates (“Joint repurchase agreements”). The principal amount of the repurchase agreement is equal to the value at period-end. If the seller of a repurchase agreement fails to repurchase the security in accordance with the terms of the agreement, the Fund might incur expenses in enforcing its rights, and could experience losses, including a decline in the value of the collateral and loss of income.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.40%
Over $250 million		0	.35%

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

Invesco V.I. Money Market Fund

  The Adviser has contractually agreed, through at least April 30, 2012, 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 Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual operating expenses after fee waiver and/or expense reimbursment to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales (4) extraordinary or non-routine items; (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012.

  The Adviser and/or Invesco Distributors, Inc., (“IDI”) voluntarily agreed to waive fees and/or reimbursed expenses in order to increase the Fund’s yield. Voluntary fee waivers and/or reimbursements may be modified at any time upon consultation with the Board of Trustees without further notice to investors.

  For the year ended December 31, 2010, Invesco voluntarily waived advisory fees of $122,854 and reimbursed class level expenses of $132,769 and 9,131 for Series I and Series II Shares, respectively.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $52,235 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Short-term Investments	$	—	$	26,625,620	$	—	$	26,625,620

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or

Invesco V.I. Money Market Fund

common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $1,520,060 and securities sales of $660,016.

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $2,558 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The Bank of New York Mellon, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	55,671	$	50,085

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	46,443
Temporary book/tax differences		(46,443	)
Capital loss carryforward		(2,143	)
Shares of beneficial interest		26,604,760
Total net assets	$	26,602,617

  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.

	Capital Loss
Expiration	Carryforward*
December 31, 2018	$	2,143

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

Invesco V.I. Money Market Fund

NOTE 8—Share Information

	Summary of Share Activity
	Years ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		9,579,686		$	9,579,686			14,958,501		$	14,958,537
Series II		36,103			36,103			51,965			51,965
Issued as reinvestment of dividends:
Series I		53,205			53,205			48,883			48,846
Series II		2,466			2,466			1,238			1,239
Reacquired:
Series I		(17,538,125	)		(17,538,125	)		(30,526,056	)		(30,526,056	)
Series II		(703,739	)		(703,739	)		(629,271	)		(629,271	)
Net increase (decrease) in share activity		(8,570,404	)	$	(8,570,404	)		(16,094,740	)	$	(16,094,740	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 92% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 9—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																					Ratio of			Ratio of
																					expenses			expenses
																					to average			to average net			Ratio of net
	Net asset					Net gains					Dividends										net assets			assets without			investment
	value,		Net			(losses)			Total from		from net			Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment			on securities			investment		investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average
	of period		income			(realized)			operations		income			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets
Series I
Year ended 12/31/10	$	1.00	$	0.00	(b)	$	(0.00	)	$	0.00	$	(0.00	)	$	1.00		0.18	%	$	25,578		0.16	%(c)		1.01	%(c)		0.18	%(c)
Year ended 12/31/09		1.00		0.00	(b)		—			0.00		(0.00	)		1.00		0.11			33,486		0.65			0.90			0.11
Year ended 12/31/08		1.00		0.02	(b)		—			0.02		(0.02	)		1.00		2.04			49,004		0.86			0.86			2.02
Year ended 12/31/07		1.00		0.04			—			0.04		(0.04	)		1.00		4.54			46,492		0.86			0.86			4.45
Year ended 12/31/06		1.00		0.04			—			0.04		(0.04	)		1.00		4.27			43,568		0.90			0.90			4.20
Series II
Year ended 12/31/10		1.00		0.00	(b)		(0.00	)		0.00		(0.00	)		1.00		0.18			1,024		0.16	(c)		1.26	(c)		0.18	(c)
Year ended 12/31/09		1.00		0.00	(b)		—			0.00		(0.00	)		1.00		0.06			1,690		0.70			1.15			0.06
Year ended 12/31/08		1.00		0.02	(b)		—			0.02		(0.02	)		1.00		1.78			2,266		1.11			1.11			1.77
Year ended 12/31/07		1.00		0.04			—			0.04		(0.04	)		1.00		4.28			2,515		1.11			1.11			4.20
Year ended 12/31/06		1.00		0.04			—			0.04		(0.04	)		1.00		4.01			2,341		1.15			1.15			3.95

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Calculated using average shares outstanding.
(c)	Ratios are based on average daily net assets (000’s) of $29,412 and $1,302 for Series I and Series II shares, respectively.

Invesco V.I. Money Market Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Money Market Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Money Market Fund (formerly known as AIM V.I. Money Market Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Money Market Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,000.40	$	1.36	$	1,023.84	$	1.38		0.27	%
Series II		1,000.00		1,000.40		1.36		1,023.84		1.38		0.27

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Money Market 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	0%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Money Market Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by		Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee		Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208		None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208		None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226		Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208		ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.		226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

1	Mr. Flanagan is considered an interested person 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 to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.
3	Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/ Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr ��� 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
Bank of New York Mellon

2 Hanson Place

Brooklyn, NY 11217-1431

T-4

Invesco V.I. Small Cap Equity Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VISCE-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the fiscal year ended December 31, 2010, Series I shares of Invesco V.I. Small Cap Equity Fund had double-digit, positive returns and outperformed versus the Fund’s style-specific index, the Russell 2000 Index, driven primarily by stock selection across a number of sectors.

     The Fund also outperformed versus the broad market, as measured by the S&P 500 Index, as small-cap stocks generally outperformed versus large-cap stocks during the period.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	28.54	%
Series II Shares	28.21
S&P 500 Index▼ (Broad Market Index)	15.08
Russell 2000 Index▼ (Style-Specific Index)	26.85
Lipper VUF Small-Cap Core Funds Index▼ (Peer Group)	25.20

^▼Lipper Inc.

How we invest

Our investment process seeks to identify attractively valued small-cap companies with high-growth potential, demonstrated by consistent and accelerating revenue and earnings growth.

     We begin with a quantitative model that ranks companies based on a set of fundamental, valuation and timeliness factors. This proprietary model provides an objective approach to identifying new investment opportunities, as the highest ranked stocks become the primary focus of our research efforts.

     Our stock selection process is based on a rigorous three-step process:

1.	Fundamental analysis. Building financial models and conducting in-depth interviews with company management.
2.	Valuation analysis. Identifying attractively valued stocks given their

	growth potential over a one- to two-year horizon.
3.	Timeliness analysis. Identifying the “timeliness” of a stock purchase. We review trading volume characteristics and trend analysis to make sure there are no signs of the stock deterioration. This also serves as a risk management measure that helps us confirm our high conviction candidates.

     Portfolio construction plays an important role in risk management. We align the Fund with the S&P 600 Small Cap Index, the benchmark we believe represents the small-cap core asset class. We seek to manage risk by keeping the Fund’s sector weightings in line with the benchmark by staying fully diversified in all those sectors. We also seek to limit stock-specific risk by investing in typically 120 to 130 holdings.

     We consider selling a stock when it no longer meets our investment criteria, based on:

n	Our original investment thesis is not valid because the fundamentals are no longer intact.
n	The price target set at purchase is exceeded.
n	The company’s timeliness profile deteriorates.

Market conditions and your Fund

The U.S. economy provided signs of improvement during the Fund’s fiscal year, potentially indicating that the economy has transitioned from a contraction phase into an expansionary phase. Nevertheless, the pace of recovery remained modest and the transition from government stimulus-induced growth to private economic recovery was uncertain.

     The U.S. Federal Reserve’s (the Fed) federal funds target rate remained low in a range of zero to 0.25%.¹ Real gross domestic product (GDP) registered positive growth during the reporting period with quarterly increases of 3.7%, 1.7% and 2.6% for the first, second and third quarters of 2010, respectively.² Inflation, measured by the seasonally-adjusted Consumer Price Index, remained relatively benign. While labor markets improved as layoffs moderated, new hiring remained quite weak. Unemployment, after climbing steadily throughout 2009, fell slightly during 2010 to a rate of 9.4% nationwide as of December 2010.³

     While stock market volatility increased significantly during the fiscal year, indexes measuring the performance of large-, mid- and small-cap stocks finished the period with positive, double-digit

Portfolio Composition

By sector

Information Technology	18.0	%
Consumer Discretionary	16.9
Industrials	16.7
Financials	15.6
Health Care	10.0
Energy	8.7
Materials	6.0
Consumer Staples	2.1
Utilities	1.3
Telecommunication Services	0.8
Money Market Funds Plus
Other Assets Less Liabilities	3.9

Top 10 Equity Holdings*

1.	Ariba Inc.	1.9	%
2.	Titan International, Inc.	1.7
3.	TIBCO Software, Inc.	1.6
4.	TRW Automotive Holdings Corp.	1.6
5.	JDS Uniphase Corp.	1.3
6.	Dillard’s, Inc.	1.3
7.	Quest Software, Inc.	1.2
8.	Phillips-Van Heusen Corp.	1.2
9.	Gardner Denver Inc.	1.2
10.	OSI Systems, Inc.	1.2

Top Five Industries*

1.	Regional Banks	6.4	%
2.	Restaurants	4.5
3.	Application Software	3.8
4.	Oil & Gas Equipment & Services	3.7
5.	Environmental & Facilities Services	3.1

Total Net Assets	$254.6 million
Total Number of Holdings*		104

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.

Invesco V.I. Small Cap Equity Fund

returns. In terms of investment style, growth stocks generally outperformed value stocks. The sectors with the highest returns in the Russell 2000 Index included more economically sensitive sectors such as information technology (IT), consumer discretionary and industrials, as well as the energy and materials sectors. Conversely, more defensive sectors such as utilities, health care and telecommunication services had the lowest returns but were still in positive territory.

     The Fund had double-digit absolute returns and outperformed versus the Russell 2000 Index primarily due to stock selection in the health care and industrials sectors. The Fund also outperformed by a narrow margin in other sectors, including utilities, consumer staples and consumer discretionary.

     The Fund outperformed by the widest margin in the health care sector, driven by stock selection in the pharmaceutical/ biotechnology/life sciences industry groups. Two holdings in this area made strong contributions to performance: Biovail and Viropharma. Biovail is no longer held by the Fund. A third health care holding that made a key contribution to performance was endovascular device maker ev3. The stock price of this holding appreciated following the announcement that the company would be acquired by a competitor. We sold the Fund’s position in this holding after the positive news, locking in gains for shareholders.

     The Fund also outperformed in the industrials sector due to stock selection. Two of the leading contributors to overall Fund performance were industrial wheel and tire maker Titan International and electrical products maker Baldor Electric. Titan benefited from significantly improved demand for its products during the year. The stock price of Baldor Electric appreciated following the announcement that the company was being acquired at a premium by a competitor. We subsequently sold the Fund’s position in this holding, locking in gains for shareholders.

     Some of this outperformance was offset by underperformance in other sectors, including IT, financials and energy. The Fund underperformed by the widest margin in the IT sector, driven by stock selection. Two holdings in the technology hardware and equipment industry group were among the leading detractors to performance during the period: communication products and services provider Comtech Telecommunications and broadband

products and services provider Arris Group. We sold the Fund’s position in both holdings due to deteriorating fundamentals.

     Underperformance in the financials sector was also due to stock selection. One holding that detracted from performance was investment management firm GAMCO Investors. GAMCO is no longer held by the Fund.

     The Fund also underperformed in the energy sector due to stock selection. One of the leading detractors to performance was natural gas and oil production holding Comstock Resources. This company had weak performance as natural gas prices continued to fall during much of the period. Arena Resources was also a key detractor to performance. Arena Resources is no longer held by the Fund.

     During the year, the most significant positioning changes included additions in the consumer discretionary and materials sectors. Purchases in these sectors were funded by reducing exposure to the health care, IT, industrials and telecommunication services sectors. All changes to the Fund were based on our bottom-up stock selection process of identifying high-quality growth companies trading at what we believe are attractive valuations.

     As we’ve discussed, the stock market experienced significant volatility during the fiscal year. We would like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult your financial adviser to discuss your individual financial program. We thank you for your commitment to Invesco V.I. Small Cap Equity Fund.

1	U.S. Federal Reserve
2	Bureau of Economic Analysis
3	U.S. Bureau of Labor Statistics

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Juliet Ellis
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Small Cap Equity Fund. Ms. Ellis joined Invesco in 2004. She began her investment career in 1981. Ms. Ellis earned a B.A. in economics and political science from Indiana University.

Juan Hartsfield
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Small Cap Equity Fund. Mr. Hartsfield joined Invesco in 2004. He earned a B.S. in petroleum engineering from The University of Texas at Austin and an M.B.A. from the University of Michigan.

Invesco V.I. Small Cap Equity Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Classes since Inception

Fund data from 8/29/03, index data from 8/31/03

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception	(8/29/03)	8.20	%
5 Years		5.76
1 Year		28.54
Series II Shares
Inception	(8/29/03)	7.95	%
5 Years		5.48
1 Year		28.21

The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes

in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.09% and 1.34%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Small Cap Equity Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses

and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower.

Invesco V.I. Small Cap Equity Fund

Invesco V.I. Small Cap Equity Fund’s investment objective is long-term growth of capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

An investment by the Fund in ETFs generally presents the same primary risks as an investment in a mutual fund. In addition, ETFs may be subject to the following: a discount of the ETF’s shares to its net asset value; failure to develop an active trading market for the ETF’s shares; the listing exchange halting trading of the ETF’s shares; failure of the ETF’s shares to track the referenced index; and holding troubled securities in the referenced index. ETFs may involve duplication of management fees and certain other expenses, as the Fund indirectly bears its proportionate share of any expenses paid by the ETFs in which it invests. Further, certain shares of the ETFs in which each fund may invest are leveraged. The more a fund invests in such leveraged ETFs, the more this leverage will magnify any losses on those investments.

     Stocks of small and mid-sized companies tend to be more vulnerable to adverse developments in the above factors and may have little or no operating history or track record of success, and limited product lines, markets, management and financial resources. The securities of small and mid-sized companies may be more volatile due to less market interest and less publicly available information about the issuer. They also may be illiquid or restricted as to resale, or may trade less frequently and in smaller volumes, all of which may cause difficulty when establishing or closing a position at a desirable price.

     The Fund’s foreign investments may be affected by changes in the foreign country’s exchange rates; political and

social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

     The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Russell 2000^® Index is an unmanaged index considered representative of small-cap stocks. The Russell 2000 Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Lipper VUF Small-Cap Core Funds Index is an unmanaged index considered representative of small-cap core variable insurance underlying funds tracked by Lipper.

     The S&P 600^® Small Cap Index is an unmanaged index considered representative of small-cap stocks managed by Standard and Poor’s and covers a broad range of small-cap stocks in the U.S.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the

Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry classifications used in this report are generally classified 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Small Cap Equity Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–96.09%
Advertising–1.15%
Interpublic Group of Cos., Inc. (The)(b)		276,299	$	2,934,295
Aerospace & Defense–1.98%
AAR Corp.(b)		91,746		2,520,263
Aerovironment Inc.(b)		40,728		1,092,732
Curtiss-Wright Corp.		43,397		1,440,780
				5,053,775
Agricultural Products–1.11%
Corn Products International, Inc.		61,314		2,820,444
Air Freight & Logistics–1.14%
UTI Worldwide, Inc.		136,791		2,899,969
Apparel Retail–1.94%
Genesco Inc.(b)		69,827		2,617,814
Finish Line, Inc. (The)–Class A		134,329		2,309,116
				4,926,930
Apparel, Accessories & Luxury Goods–2.07%
Hanesbrands, Inc.(b)		84,315		2,141,601
Phillips-Van Heusen Corp.		49,635		3,127,501
				5,269,102
Application Software–3.83%
Parametric Technology Corp.(b)		112,804		2,541,474
Quest Software, Inc.(b)		112,956		3,133,400
TIBCO Software, Inc.(b)		207,193		4,083,774
				9,758,648
Asset Management & Custody Banks–1.78%
Affiliated Managers Group, Inc.(b)		21,846		2,167,560
SEI Investments Co.		98,920		2,353,307
				4,520,867
Auto Parts & Equipment–2.73%
Dana Holding Corp.(b)		167,987		2,891,056
TRW Automotive Holdings Corp.(b)		76,857		4,050,364
				6,941,420
Automotive Retail–0.85%
Penske Automotive Group, Inc.(b)		124,589		2,170,340
Casinos & Gaming–0.81%
Bally Technologies Inc.(b)		49,065		2,070,052
Coal & Consumable Fuels–1.04%
James River Coal Co.(b)		104,283		2,641,488
	Shares
Communications Equipment–2.10%
JDS Uniphase Corp.(b)		236,224		3,420,524
Tellabs, Inc.		285,717		1,937,161
				5,357,685
Construction, Farm Machinery & Heavy Trucks–2.47%
Titan International, Inc.(c)		224,505		4,386,828
Trinity Industries, Inc.		71,146		1,893,195
				6,280,023
Data Processing & Outsourced Services–1.10%
Wright Express Corp.(b)		60,864		2,799,744
Department Stores–1.28%
Dillard’s, Inc.–Class A		85,852		3,257,225
Diversified Chemicals–0.97%
FMC Corp.		31,052		2,480,744
Diversified Metals & Mining–1.00%
Compass Minerals International, Inc.		28,607		2,553,747
Electrical Components & Equipment–2.35%
Belden Inc.		82,416		3,034,557
GrafTech International Ltd.(b)		149,092		2,957,986
				5,992,543
Electronic Equipment & Instruments–1.82%
OSI Systems, Inc.(b)		85,237		3,099,217
Rofin-Sinar Technologies, Inc.(b)		43,463		1,540,329
				4,639,546
Environmental & Facilities Services–3.08%
ABM Industries Inc.		111,527		2,933,160
Team, Inc.(b)		115,130		2,786,146
Waste Connections, Inc.		77,017		2,120,278
				7,839,584
Gas Utilities–1.34%
Energen Corp.		31,066		1,499,245
UGI Corp.		60,891		1,922,938
				3,422,183
Health Care Distributors–0.65%
Owens & Minor, Inc.		56,555		1,664,414
Health Care Equipment–0.80%
Teleflex, Inc.		37,994		2,044,457

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Small Cap Equity Fund

	Shares		Value
Health Care Facilities–2.15%
Hanger Orthopedic Group, Inc.(b)		117,501	$	2,489,846
Universal Health Services, Inc.–Class B		68,466		2,972,794
				5,462,640
Health Care Services–0.71%
Gentiva Health Services, Inc.(b)		67,649		1,799,463
Health Care Supplies–1.06%
Cooper Cos., Inc. (The)		47,786		2,692,263
Health Care Technology–0.66%
Omnicell, Inc.(b)		115,587		1,670,232
Home Furnishings–0.89%
Ethan Allen Interiors Inc.		113,560		2,272,336
Industrial Machinery–3.04%
Gardner Denver Inc.		45,406		3,124,841
IDEX Corp.		64,365		2,517,959
Valmont Industries, Inc.		23,521		2,087,018
				7,729,818
Insurance Brokers–0.80%
Arthur J. Gallagher & Co.		70,439		2,048,366
Integrated Telecommunication Services–0.85%
Alaska Communications Systems Group Inc.		193,990		2,153,289
Internet Software & Services–1.93%
GSI Commerce, Inc.(b)		75,731		1,756,959
Open Text Corp. (Canada)(b)		48,370		2,227,922
ValueClick, Inc.(b)		57,532		922,238
				4,907,119
Investment Banking & Brokerage–0.80%
KBW Inc.		73,122		2,041,566
IT Consulting & Other Services–0.82%
CACI International Inc.–Class A(b)		39,156		2,090,930
Life Sciences Tools & Services–1.18%
Dionex Corp.(b)		25,506		3,009,963
Metal & Glass Containers–0.89%
AptarGroup, Inc.		47,656		2,266,996
Movies & Entertainment–0.67%
World Wrestling Entertainment, Inc.–Class A(c)		119,952		1,708,117
Office REIT’s–1.50%
Alexandria Real Estate Equities, Inc.		25,624		1,877,214
Digital Realty Trust, Inc.(c)		37,900		1,953,366
				3,830,580
Oil & Gas Drilling–0.99%
Patterson-UTI Energy, Inc.		117,395		2,529,862
Oil & Gas Equipment & Services–3.69%
Complete Production Services, Inc.(b)		86,474		2,555,307
Dresser-Rand Group, Inc.(b)		60,800		2,589,472
Lufkin Industries, Inc.		27,700		1,728,203
Oceaneering International, Inc.(b)		34,408		2,533,461
				9,406,443
Oil & Gas Exploration & Production–1.88%
Comstock Resources, Inc.(b)		15,364		377,340
Forest Oil Corp.(b)		74,312		2,821,627
SandRidge Energy Inc.(b)		215,573		1,577,994
				4,776,961
Oil & Gas Refining & Marketing–1.07%
Frontier Oil Corp.(b)		151,831		2,734,476
Packaged Foods & Meats–0.99%
TreeHouse Foods, Inc.(b)		49,259		2,516,642
Paper Products–1.04%
Schweitzer-Mauduit International, Inc.		42,039		2,645,094
Pharmaceuticals–2.76%
Valeant Pharmaceuticals International, Inc.		81,278		2,299,355
ViroPharma Inc.(b)		175,234		3,035,053
VIVUS, Inc.(b)(c)		179,312		1,680,153
				7,014,561
Property & Casualty Insurance–1.61%
FPIC Insurance Group, Inc.(b)		47,174		1,743,551
Hanover Insurance Group Inc. (The)		35,046		1,637,349
Safety Insurance Group, Inc.		15,114		718,973
				4,099,873
Regional Banks–6.43%
Associated Banc-Corp		146,253		2,215,733
BancFirst Corp.		47,380		1,951,582
Columbia Banking System, Inc.		103,057		2,170,380
Commerce Bancshares, Inc.		45,523		1,808,613
Community Trust Bancorp, Inc.		53,236		1,541,715
East West Bancorp, Inc.		123,685		2,418,042
FirstMerit Corp.		95,557		1,891,073
Zions Bancorp.		97,524		2,363,007
				16,360,145
Restaurants–4.46%
Brinker International, Inc.		114,179		2,384,058
DineEquity, Inc.(b)		52,191		2,577,192
P.F. Chang’s China Bistro, Inc.(c)		43,976		2,131,077

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Small Cap Equity Fund

	Shares		Value
Restaurants–(continued)
Papa John’s International, Inc.(b)		53,425	$	1,479,872
Texas Roadhouse, Inc.(b)		162,164		2,784,356
				11,356,555
Retail REIT’s–1.01%
Tanger Factory Outlet Centers, Inc.		50,300		2,574,857
Semiconductor Equipment–2.61%
Advanced Energy Industries, Inc.(b)		128,870		1,757,787
Cymer, Inc.(b)		54,300		2,447,301
MKS Instruments, Inc.(b)		99,583		2,438,788
				6,643,876
Semiconductors–1.06%
Semtech Corp.(b)		118,739		2,688,251
Specialized REIT’s–1.71%
LaSalle Hotel Properties		105,648		2,789,107
Senior Housing Properties Trust		71,446		1,567,526
				4,356,633
Specialty Chemicals–2.07%
Innophos Holdings, Inc.		66,937		2,415,087
PolyOne Corp.(b)		227,945		2,847,033
				5,262,120
Systems Software–1.85%
Ariba Inc.(b)		201,023		4,722,030
Technology Distributors–0.83%
Ingram Micro Inc.–Class A(b)		110,701		2,113,282
Trading Companies & Distributors–0.79%
Beacon Roofing Supply, Inc.(b)		112,286		2,006,551
Trucking–1.90%
Landstar System, Inc.		47,642		1,950,464
Old Dominion Freight Line, Inc.(b)		89,861		2,874,653
				4,825,117
Total Common Stocks & Other Equity Interests (Cost $176,538,798)				244,656,232
Money Market Funds–3.04%
Liquid Assets Portfolio–Institutional Class(d)		3,865,421		3,865,421
Premier Portfolio–Institutional Class(d)		3,865,421		3,865,421
Total Money Market Funds (Cost $7,730,842)				7,730,842
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–99.13% (Cost $184,269,640)				252,387,074
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–3.56%
Liquid Assets Portfolio–Institutional Class (Cost $9,064,245)(e)		9,064,245		9,064,245
TOTAL INVESTMENTS–102.69% (Cost $193,333,885)				261,451,319
OTHER ASSETS LESS LIABILITIES–(2.69)%				(6,855,940	)
NET ASSETS–100.00%			$	254,595,379

Investment Abbreviations:

REIT – Real Estate Investment Trust

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	All or a portion of this security was out on loan at December 31, 2010.
(d)	The money market fund and the Fund are affiliated by having the same investment adviser.
(e)	The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1I.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Small Cap Equity Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $176,538,798)*	$	244,656,232
Investments in affiliated money market funds, at value and cost		16,795,087
Total investments, at value (Cost $193,333,885)		261,451,319
Receivable for:
Investments sold		4,172,395
Fund shares sold		247,984
Dividends		175,222
Investment for trustee deferred compensation and retirement plans		18,494
Other assets		14
Total assets		266,065,428
Liabilities:
Payable for:
Investments purchased		1,864,813
Fund shares reacquired		182,629
Collateral upon return of securities loaned		9,064,245
Accrued fees to affiliates		297,950
Accrued other operating expenses		30,518
Trustee deferred compensation and retirement plans		29,894
Total liabilities		11,470,049
Net assets applicable to shares outstanding	$	254,595,379
Net assets consist of:
Shares of beneficial interest	$	224,619,001
Undistributed net investment income (loss)		(28,013	)
Undistributed net realized gain (loss)		(38,113,043	)
Unrealized appreciation		68,117,434
	$	254,595,379
Net Assets:
Series I	$	220,925,107
Series II	$	33,670,272
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		13,365,838
Series II		2,069,368
Series I:
Net asset value per share	$	16.53
Series II:
Net asset value per share	$	16.27

*  At December 31, 2010, securities with an aggregate value of $8,828,622 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $17,555)	$	2,048,831
Dividends from affiliated money market funds (includes securities lending income of $28,263)		34,716
Total investment income		2,083,547
Expenses:
Advisory fees		1,620,986
Administrative services fees		601,988
Custodian fees		17,398
Distribution fees — Series II		55,765
Transfer agent fees		18,342
Trustees’ and officers’ fees and benefits		21,788
Other		45,093
Total expenses		2,381,360
Less: Fees waived		(7,662	)
Net expenses		2,373,698
Net investment income (loss)		(290,151	)
Realized and unrealized gain from:
Net realized gain from investment securities (includes net gains (losses) from securities sold to affiliates of $(94,460))		806,612
Change in net unrealized appreciation of investment securities		53,570,548
Net realized and unrealized gain		54,377,160
Net increase in net assets resulting from operations	$	54,087,009

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Small Cap Equity Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income (loss)	$	(290,151	)	$	(40,537	)
Net realized gain (loss)		806,612			(20,760,004	)
Change in net unrealized appreciation		53,570,548			54,460,389
Net increase in net assets resulting from operations		54,087,009			33,659,848
Distributions to shareholders from net investment income:
Series I		—			(278,362	)
Series II		—			(15,577	)
Total distributions from net investment income		—			(293,939	)
Share transactions–net:
Series I		(5,817,750	)		(4,469,997	)
Series II		13,329,420			6,233,450
Net increase in net assets resulting from share transactions		7,511,670			1,763,453
Net increase in net assets		61,598,679			35,129,362
Net assets:
Beginning of year		192,996,700			157,867,338
End of year (includes undistributed net investment income (loss) of $(28,013) and $(24,065), respectively)	$	254,595,379		$	192,996,700

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Small Cap Equity Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as

Invesco V.I. Small Cap Equity Fund

	institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the

Invesco V.I. Small Cap Equity Fund

	financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.745%
Next $250 million		0	.73%
Next $500 million		0	.715%
Next $1.5 billion		0	.70%
Next $2.5 billion		0	.685%
Next $2.5 billion		0	.67%
Next $2.5 billion		0	.655%
Over $10 billion		0	.64%

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, 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 Series I shares to 1.15% and Series II shares to 1.40% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $7,662.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to

Invesco V.I. Small Cap Equity Fund

insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $60,044 for accounting and fund administrative services and reimbursed $541,944 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	261,451,319	$	—	$	—	$	261,451,319

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $652,150 and securities sales of $326,114, which resulted in net realized gains (losses) of $(94,460).

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $2,971 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

Invesco V.I. Small Cap Equity Fund

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	—	$	293,939

Tax Components of Net Assets at Period-End:

	2010
Net unrealized appreciation — investments	$	66,005,751
Temporary book/tax differences		(28,013	)
Capital loss carryforward		(36,001,360	)
Shares of beneficial interest		224,619,001
Total net assets	$	254,595,379

  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 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 December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	12,193,641
December 31, 2017		22,760,741
December 31, 2018		1,046,978
Total capital loss carryforward	$	36,001,360

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $97,957,701 and $98,153,951, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	66,769,084
Aggregate unrealized (depreciation) of investment securities		(763,333	)
Net unrealized appreciation of investment securities	$	66,005,751
Cost of investments for tax purposes is $195,445,568.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of net operating losses, on December 31, 2010, undistributed net investment income (loss) was increased by $286,203 and shares of beneficial interest decreased by $286,203. This reclassification had no effect on the net assets of the Fund.

Invesco V.I. Small Cap Equity Fund

NOTE 10—Share Information

	Summary of Share Activity
	Years ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		4,244,898		$	60,143,350			3,683,269		$	39,156,749
Series II		1,189,752			16,471,236			780,951			8,298,387
Issued as reinvestment of dividends:
Series I		—			—			22,558			278,362
Series II		—			—			1,279			15,577
Reacquired:
Series I		(4,793,630	)		(65,961,100	)		(4,128,279	)		(43,905,108	)
Series II		(227,279	)		(3,141,816	)		(204,276	)		(2,080,514	)
Net increase in share activity		413,741		$	7,511,670			155,502		$	1,763,453

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 75% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																												Ratio of			Ratio of
						Net gains																						expenses			expenses
						(losses)																						to average			to average net			Ratio of net
	Net asset		Net			on securities						Dividends			Distributions													net assets			assets without			investment
	value,		investment			(both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income			realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)(a)			unrealized)			operations			income			gains			Distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	12.86	$	(0.02	)	$	3.69		$	3.67		$	—		$	—		$	—		$	16.53		28.54	%	$	220,925		1.07	%(d)		1.07	%(d)		(0.11	)%(d)		46	%
Year ended 12/31/09		10.62		(0.00	)		2.26			2.26			(0.02	)		—			(0.02	)		12.86		21.29			178,949		1.09			1.09			(0.01	)		46
Year ended 12/31/08		15.53		0.02			(4.88	)		(4.86	)		—			(0.05	)		(0.05	)		10.62		(31.31	)		152,310		1.09			1.09			0.16			55
Year ended 12/31/07		15.19		(0.01	)		0.81			0.80			(0.01	)		(0.45	)		(0.46	)		15.53		5.19			168,286		1.12			1.15			(0.07	)		45
Year ended 12/31/06		13.46		(0.01	)		2.37			2.36			—			(0.63	)		(0.63	)		15.19		17.44			93,243		1.15			1.33			(0.06	)		52
Series II
Year ended 12/31/10		12.69		(0.05	)		3.63			3.58			—			—			—			16.27		28.21			33,670		1.32	(d)		1.32	(d)		(0.36	)(d)		46
Year ended 12/31/09		10.51		(0.03	)		2.23			2.20			(0.02	)		—			(0.02	)		12.69		20.90			14,048		1.34			1.34			(0.26	)		46
Year ended 12/31/08		15.39		(0.00	)		(4.83	)		(4.83	)		—			(0.05	)		(0.05	)		10.51		(31.40	)		5,557		1.34			1.34			(0.09	)		55
Year ended 12/31/07		15.10		(0.05	)		0.79			0.74			—			(0.45	)		(0.45	)		15.39		4.84			32		1.37			1.40			(0.32	)		45
Year ended 12/31/06		13.41		(0.04	)		2.36			2.32			—			(0.63	)		(0.63	)		15.10		17.20			854		1.40			1.58			(0.31	)		52

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year. For the period ending December 31, 2007, the portfolio turnover calculation excludes the value of securities purchased of $17,709,035 and sold of $19,432,514 in the effort to realign the Fund’s portfolio holdings after the reorganization of AIM V.I. Small Cap Growth Fund into the Fund.
(d)	Ratios are based on average daily net assets (000’s) of $195,276 and $22,306 for Series I and Series II shares, respectively.

Invesco V.I. Small Cap Equity Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Small Cap Equity Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Small Cap Equity Fund (formerly known as AIM V.I. Small Cap Equity Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Small Cap Equity Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
			ACTUAL				(5% annual return before expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,295.50	$	6.13	$	1,019.86	$	5.40		1.06	%
Series II		1,000.00		1,294.30		7.58		1,018.60		6.67		1.31

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Small Cap Equity Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Technology Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

I-VITEC-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2010, the economy showed signs of improvement, fueling equity markets’ continued upward trajectory. Invesco V.I. Technology Fund outperformed both the S&P 500 Index and the Bank of America Merrill Lynch 100 Technology Index (BOA ML 100 Tech Index), the Fund’s broad market and style-specific indexes, respectively, during the reporting period. Relative to the BOA ML 100 Tech Index, the Fund’s security selection in the communications equipment, software and electronic equipment industries positively affected performance.

     The Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	21.30	%
Series II Shares	21.03
S&P 500 Index▼ (Broad Market Index)	15.08
BofA Merrill Lynch 100 Technology Index▼ (Style-Specific Index)	18.78
Lipper VUF Science & Technology Funds Category Average▼ (Peer Group)	20.51

^▼ Lipper Inc.

How we invest

We seek to grow capital by investing in companies we believe generate sustainable, superior earnings and cash flow growth that is not fully reflected in investor expectations or equity valuations. The Fund emphasizes companies believed to have a strategic advantage over their competition and operating in industries believed to be beneficiaries of secular trends. The Fund invests in industries such as hardware, software, telecommunications equipment and services, semiconductors and service-related companies in the information technology (IT) sector. We use a research oriented bottom-up investment approach focusing on company fundamentals and growth prospects.

     We place great emphasis on companies exhibiting high returns on invested capital and generating free cash flow, metrics we believe are good indicators of financial health and growth potential. Also, we seek companies with management teams

that maintain high quality balance sheets and manageable debt levels. Valuation also plays a critical role in stock selection.

     Risk management is an integral part of our portfolio construction, as our target portfolio attempts to limit volatility and downside risk. Only stocks that exhibit a proper balance of risk and reward are chosen for inclusion in the portfolio. We seek to accomplish this goal by thoroughly understanding the key business drivers of companies in which we invest. The portfolio is constructed with the goal of holding approximately 40-60 individual stocks we believe are best suited to capitalize on secular trends prevalent in the IT sector.

     We may reduce or eliminate our holding in a stock when:

n	A stock’s price reaches its valuation target.
n	A company’s fundamentals change or deteriorate.
n	It no longer meets our investment criteria.

Market conditions and your Fund

Equity markets were volatile in 2010 as investors weighed the competing issues of solid corporate profits and soft macro-economic data. Corporate earnings were largely positive, but were often overshadowed by concerns about high unemployment, a lack of consumer spending, soft housing data and the possibility of additional U.S. Federal Reserve accommodation. After rising through April, the major equity indexes sold off precipitously in May as the sovereign debt crisis unfolded in the eurozone while U.S. economic indicators remained weak, prompting concerns of a “double-dip” recession. Uncertainty created by the debt crisis combined with subdued employment, consumer spending and housing data added to concerns that the recovery was slowing to a sub-normal growth rate. Just as abruptly, however, the markets reversed course and rallied in September and October on modestly better economic news, ending the year with double-digit gains.

     Major equity indexes had positive returns for the year, and all 10 sectors within the S&P 500 Index posted gains. More economically sensitive sectors such as consumer discretionary, industrials and materials had the highest returns, while the less economically sensitive sectors such as health care had some of the lowest returns

     Relative to the BOA ML 100 Tech Index, the Fund’s security selection in the communications equipment, software and electronic equipment industries enhanced performance during the reporting period. On the other hand, the Fund’s security selection and underweight exposure in Internet software and services stocks detracted from relative performance. Additionally, the Fund’s lack of holdings in the office electronics

Portfolio Composition

By sector

Information Technology	91.1	%
Consumer Discretionary	2.6
Materials	1.1
Financials	0.6
Health Care	0.4
Money Market Funds Plus
Other Assets Less Liabilities	4.2

Top 10 Equity Holdings*

1.	Apple Inc.	7.2	%
2.	Google Inc.-Class A	4.2
3.	Cognizant Technology
	Solutions Corp., Class A	4.1
4.	Check Point Software
	Technologies Ltd.	3.6
5.	QUALCOMM, Inc.	3.0
6.	Intel Corp.	2.8
7.	Microsoft Corp.	2.7
8.	Tyco Electronics Ltd.	2.7
9.	Microsemi Corp.	2.6
10.	EMC Corp.	2.3

Top Five Industries

1.	Semiconductors	15.3	%
2.	Systems Software	14.9
3.	Communications Equipment	12.3
4.	Computer Hardware	7.7
5.	Application Software	6.8

Total Net Assets	$129.5 million
Total Number of Holdings*		70

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.

Invesco V.I. Technology Fund

industry, an industry which performed well for the index, and the Fund’s exposure to wireless telecommunication services, an underperforming industry, which was not represented in the index, negatively affected Fund performance in 2010.

     Top contributors to the Fund’s absolute performance during the year included Apple and Check Point Software Technologies. Apple continued to introduce new innovative products during the reporting period, unveiling a new version of the iPhone and introducing the iPad. Check Point develops enterprise and consumer security software to help protect against hackers, spyware and identity theft.

     Western Digital and Smart Technologies were among the top detractors from the Fund’s absolute performance during the reporting period. Industry fundamentals, particularly pricing and inventory, in the hard disk drive market deteriorated. Smart Technologies, maker of interactive white boards for the educational market, suffered due to investor concerns of potential state and local budget cuts, and therefore, concerns over future demand for the company’s products. We sold Smart Technologies due to deteriorating fundamentals.

     During the reporting period, we reduced exposure to the semiconductors industry through the sale of Intersil and Applied Materials. In addition, we sold Hewlett-Packard following the CEO’s departure from the company, which reduced our weight in the computer and peripherals industry. Portfolio additions included Rovi, Red Hat, Tibco Software and Quest Software, thus increasing our exposure to the software industry. We also made significant additions within the communications equipment industry through such stocks as Ciena, JDS Uniphase and Acme Packet.

     The IT sector had the most exposure to domestic financial services firms. As such, we remained conscious of the headwinds affecting business and consumer spending on IT products. Longer term, we continued to see positive trends in the IT sector because we believe three key secular themes, which are independent of short-term catalysts, continued to offer support: 1) globalization — productivity gains supported increased technology use in international markets; 2) consumeriza-tion — technology demand is consumer-driven; 3) proliferation — technology continues to penetrate products ranging from automobiles and industrial controls to sporting gear and alternative energy.

     As always, we thank you for your continued investment in Invesco V.I. Technology Fund.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Warren Tennant
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Technology Fund. Mr. Tennant joined Invesco in 2000 and was named a portfolio manager in 2007 before becoming lead manager of the Fund in 2008. He earned both a B.B.A. in finance and an M.B.A. from The University of Texas at Austin.

Brian Nelson
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Technology Fund. He began his investment career in 1995 and joined Invesco in 2004. Mr. Nelson earned a B.A. from the University of California-Santa Barbara and is a member of the CFA Society of San Francisco.

Assisted by the Technology Team

Invesco V.I. Technology Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Fund data from 5/20/97, index data from 5/31/97

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (5/20/97)			3.58	%
	10	Years	-5.57
	5	Years	4.74
	1	Year	21.30
Series II Shares
	10	Years	-5.82	%
	5	Years	4.48
	1	Year	21.03

Series II shares incepted on April 30, 2004. Performance shown prior to that date is that of Series I shares, restated to reflect the higher 12b-1 fees applicable to Series II. Series I performance reflects any applicable fee waivers or expense reimbursements. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future

results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.20% and 1.45%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Technology Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered

through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available on the Invesco automated information line, 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

Invesco V.I. Technology Fund

Invesco V.I. Technology Fund’s investment objective is long-term growth of capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

     An investment by the Fund in ETFs generally presents the same primary risks as an investment in a mutual fund. In addition, ETFs may be subject to the following: a discount of the ETF’s shares to its net asset value; failure to develop an active trading market for the ETF’s shares; the listing exchange halting trading of the ETF’s shares; failure of the ETF’s shares to track the referenced index; and holding troubled securities in the referenced index. ETFs may involve duplication of management fees and certain other expenses, as the Fund indirectly bears its proportionate share of any expenses paid by the ETFs in which it invests. Further, certain of the ETFs in which each fund may invest are leveraged. The more a fund invests in such leveraged ETFs, the more this leverage will magnify any losses on those investments.

     The Fund’s investments are concentrated in a comparatively narrow segment of the economy, which may make the fund more volatile.

     Many products and services offered in technology-related industries are subject to rapid obsolescence, which may lower the value of the issuers in this sector.

     The Fund’s foreign investments may be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     The Fund may invest a large percentage of its assets in a limited number of securities or other instruments, which could negatively affect the value of the fund.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The BofA Merrill Lynch 100 Technology Index is a price-only equal-dollar weighted index of 100 stocks designed to measure the performance of a cross section of large, actively traded technology stocks and American Depositary Receipts.

     The Lipper VUF Science & Technology Funds Category Average represents an average of all of the variable insurance underlying funds in the Lipper Science & Technology Funds category.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Technology Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–95.85%
Application Software–6.80%
Autodesk, Inc.(b)		49,417	$	1,887,729
Citrix Systems, Inc.(b)		28,420		1,944,212
NICE Systems Ltd.–ADR (Israel)(b)		47,667		1,663,578
Quest Software, Inc.(b)		59,236		1,643,207
TIBCO Software, Inc.(b)		84,602		1,667,506
				8,806,232
Communications Equipment–12.31%
Acme Packet, Inc.(b)		28,171		1,497,570
Ciena Corp.(b)		97,074		2,043,408
Cisco Systems, Inc.(b)		126,879		2,566,762
Finisar Corp.(b)		52,533		1,559,705
JDS Uniphase Corp.(b)		118,169		1,711,087
Plantronics, Inc.		28,095		1,045,696
Polycom, Inc.(b)		33,143		1,291,914
QUALCOMM, Inc.		77,998		3,860,121
Sycamore Networks, Inc.		17,714		364,731
				15,940,994
Computer Hardware–7.69%
Apple Inc.(b)		28,985		9,349,401
Dell, Inc.(b)		45,318		614,059
				9,963,460
Computer Storage & Peripherals–5.75%
Compellant Technologies, Inc.(b)		22,584		623,092
EMC Corp.(b)		130,314		2,984,191
NetApp, Inc.(b)		21,778		1,196,919
SanDisk Corp.(b)		13,259		661,094
Seagate Technology PLC (Ireland)(b)		41,993		631,155
STEC Inc.(b)(c)		41,562		733,569
Western Digital Corp.(b)		18,151		615,319
				7,445,339
Data Processing & Outsourced Services–5.50%
Alliance Data Systems Corp.(b)(c)		31,147		2,212,372
MasterCard, Inc.–Class A		6,820		1,528,430
Visa Inc., Class A		8,285		583,098
Western Union Co. (The)		54,673		1,015,278
Wright Express Corp.(b)		38,794		1,784,524
				7,123,702
Electronic Components–1.90%
Corning Inc.		67,603		1,306,090
Dolby Laboratories Inc.–Class A(b)		17,212		1,148,040
				2,454,130
Electronic Manufacturing Services–5.30%
Flextronics International Ltd. (Singapore)(b)		317,661		2,493,639
Jabil Circuit, Inc.		46,823		940,674
Tyco Electronics Ltd. (Switzerland)		96,997		3,433,694
				6,868,007
Fertilizers & Agricultural Chemicals–1.14%
Monsanto Co.		21,260		1,480,546
Health Care Equipment–0.44%
Masimo Corp.		19,751		574,162
Home Entertainment Software–0.52%
Nintendo Co., Ltd. (Japan)		2,300		674,738
Internet Retail–2.61%
Amazon.com, Inc.(b)		12,539		2,257,020
Netflix Inc.(b)		6,367		1,118,682
				3,375,702
Internet Software & Services–6.24%
Google Inc., Class A(b)		9,190		5,458,584
GSI Commerce, Inc.(b)		34,994		811,861
VeriSign, Inc.		29,962		978,859
Yahoo! Inc.(b)		49,973		831,051
				8,080,355
IT Consulting & Other Services–6.33%
Accenture PLC–Class A (Ireland)		26,512		1,285,567
Cognizant Technology Solutions Corp.–Class A(b)		73,216		5,366,000
International Business Machines Corp.		10,550		1,548,318
				8,199,885
Other Diversified Financial Services–0.59%
BlueStream Ventures L.P. (Acquired 08/03/00–06/13/08; Cost $3,149,655)(d)(e)		—		758,037
Semiconductor Equipment–2.60%
Advanced Energy Industries, Inc.(b)		49,103		669,765
ASML Holding N.V.–New York Shares (Netherlands)		35,717		1,369,390
Cymer, Inc.(b)		29,445		1,327,086
				3,366,241

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Technology Fund

	Shares		Value
Semiconductors–15.25%
Atmel Corp.(b)		28,895	$	355,986
Avago Technologies Ltd. (Singapore)		71,137		2,025,270
Broadcom Corp.–Class A		49,646		2,162,083
Cirrus Logic, Inc.(b)(c)		58,075		928,039
Cypress Semiconductor Corp.(b)		18,444		342,690
Intel Corp.		172,140		3,620,104
Marvell Technology Group Ltd.(b)		31,094		576,794
Microsemi Corp.(b)		146,215		3,348,323
ON Semiconductor Corp.(b)		173,977		1,718,893
RF Micro Devices, Inc.(b)		140,799		1,034,873
Semtech Corp.(b)		73,731		1,669,270
Skyworks Solutions, Inc.(b)		34,757		995,093
Xilinx, Inc.		33,698		976,568
				19,753,986
Systems Software–14.88%
Ariba Inc.(b)		75,305		1,768,914
Check Point Software Technologies Ltd. (Israel)(b)		99,830		4,618,136
CommVault Systems, Inc.(b)		20,592		589,343
Microsoft Corp.		126,747		3,538,776
Oracle Corp.		90,410		2,829,833
Red Hat, Inc.(b)		46,701		2,131,901
Rovi Corp.(b)		44,813		2,778,854
Symantec Corp.(b)		60,523		1,013,155
				19,268,912
Total Common Stocks & Other Equity Interests (Cost $92,880,196)				124,134,428
Money Market Funds–4.42%
Liquid Assets Portfolio–Institutional Class(f)		2,863,131		2,863,131
Premier Portfolio–Institutional Class(f)		2,863,131		2,863,131
Total Money Market Funds (Cost $5,726,262)				5,726,262
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.27% (Cost $98,606,458)				129,860,690
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–2.03%
Liquid Assets Portfolio–Institutional Class (Cost $2,624,582)(f)(g)		2,624,582		2,624,582
TOTAL INVESTMENTS–102.30% (Cost $101,231,040)				132,485,272
OTHER ASSETS LESS LIABILITIES–(2.30)%				(2,982,911	)
NET ASSETS–100.00%			$	129,502,361

Investment Abbreviations:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	All or a portion of this security was out on loan at December 31, 2010.
(d)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The value of this security at December 31, 2010 represented 0.59% of the Fund’s Net Assets.
(e)	The Fund has a remaining commitment of $101,250 to purchase additional interests in BlueStream Ventures L.P., which is subject to the terms of the limited partnership agreement.
(f)	The money market fund and the Fund are affiliated by having the same investment adviser.
(g)	The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1J.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Technology Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $92,880,196)*	$	124,134,428
Investments in affiliated money market funds, at value and cost		8,350,844
Total investments, at value (Cost $101,231,040)		132,485,272
Foreign currencies, at value (Cost $11,522)		12,317
Receivable for:
Fund shares sold		57,024
Dividends		35,391
Investment for trustee deferred compensation and retirement plans		31,272
Total assets		132,621,276
Liabilities:
Payable for:
Fund shares reacquired		260,794
Collateral upon return of securities loaned		2,624,582
Accrued fees to affiliates		148,727
Accrued other operating expenses		37,744
Trustee deferred compensation and retirement plans		47,068
Total liabilities		3,118,915
Net assets applicable to shares outstanding	$	129,502,361
Net assets consist of:
Shares of beneficial interest	$	109,883,197
Undistributed net investment income		2,101,126
Undistributed net realized gain (loss)		(13,736,989	)
Unrealized appreciation		31,255,027
	$	129,502,361
Net Assets:
Series I	$	128,304,410
Series II	$	1,197,951
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		8,018,454
Series II		76,258
Series I:
Net asset value per share	$	16.00
Series II:
Net asset value per share	$	15.71

*  At December 31, 2010, securities with an aggregate value of $2,558,428 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $2,696)	$	1,516,352
Dividends from affiliated money market funds (includes securities lending income of $9,450)		14,201
Total investment income		1,530,553
Expenses:
Advisory fees		869,432
Administrative services fees		335,028
Custodian fees		10,919
Distribution fees — Series II		1,537
Transfer agent fees		34,270
Trustees’ and officers’ fees and benefits		18,842
Other		57,883
Total expenses		1,327,911
Less: Fees waived		(5,592	)
Net expenses		1,322,319
Net investment income		208,234
Realized and unrealized gain from:
Net realized gain from:
Investment securities		7,910,820
Foreign currencies		920
		7,911,740
Change in net unrealized appreciation of:
Investment securities		14,070,906
Foreign currencies		1,035
		14,071,941
Net realized and unrealized gain		21,983,681
Net increase in net assets resulting from operations	$	22,191,915

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Technology Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income (loss)	$	208,234		$	(246,156	)
Net realized gain (loss)		7,911,740			(7,709,275	)
Change in net unrealized appreciation		14,071,941			49,818,541
Net increase in net assets resulting from operations		22,191,915			41,863,110
Share transactions–net:
Series I		(13,096,747	)		6,048,496
Series II		622,157			212,164
Net increase (decrease) in net assets resulting from share transactions		(12,474,590	)		6,260,660
Net increase in net assets		9,717,325			48,123,770
Net assets:
Beginning of year		119,785,036			71,661,266
End of year (includes undistributed net investment income of $2,101,126 and $1,797,307, respectively)	$	129,502,361		$	119,785,036

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Technology Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objective is long-term growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.

Invesco V.I. Technology Fund

	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.

Invesco V.I. Technology Fund

H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Other Risks — The Fund’s investments are concentrated in a comparatively narrow segment of the economy, which may make the Fund more volatile.
	Many products and services offered in technology-related industries are subject to rapid obsolescence, which may lower the value of the issuers in this sector.
J.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
K.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
L.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.75%
Next $250 million		0	.74%
Next $500 million		0	.73%
Next $1.5 billion		0	.72%
Next $2.5 billion		0	.71%
Next $2.5 billion		0	.70%
Next $2.5 billion		0	.69%
Over $10 billion		0	.68%

Invesco V.I. Technology Fund

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, 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 Series I shares to 1.30% and Series II shares to 1.45% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $5,592.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $285,028 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. 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.

Invesco V.I. Technology Fund

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	131,727,235	$	—	$	758,037	$	132,485,272

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $8,248.

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $2,752 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

There were no ordinary income or long-term capital gain distributions paid during the years ended December 31, 2010 and 2009.

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	200,163
Net unrealized appreciation — investments		33,194,887
Net unrealized appreciation — other investments		795
Temporary book/tax differences		(42,768	)
Capital loss carryforward		(13,733,913	)
Shares of beneficial interest		109,883,197
Total net assets	$	129,502,361

  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 difference is attributable primarily to wash sales and partnership interests.

  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.

Invesco V.I. Technology Fund

  The Fund utilized $7,468,131 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	2,325,577
December 31, 2017		11,408,336
Total capital loss carryforward	$	13,733,913

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $47,676,545 and $60,714,616, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	37,939,894
Aggregate unrealized (depreciation) of investment securities		(4,745,007	)
Net unrealized appreciation of investment securities	$	33,194,887
Cost of investments for tax purposes is $99,290,385.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforward and partnership adjustments, on December 31, 2010, undistributed net investment income was increased by $95,585, undistributed net realized gain (loss) was increased by $26,229,782 and shares of beneficial interest decreased by $26,325,367. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		1,717,411		$	23,632,823			2,735,605		$	28,624,111
Series II		62,723			886,304			21,914			249,444
Reacquired:
Series I		(2,747,969	)		(36,729,570	)		(2,226,031	)		(22,575,615	)
Series II		(18,555	)		(264,147	)		(3,726	)		(37,280	)
Net increase (decrease) in share activity		(986,390	)	$	(12,474,590	)		527,762		$	6,260,660

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 67% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Technology Fund

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																			Ratio of			Ratio of
						Net gains													expenses			expenses
						(losses)													to average			to average net			Ratio of net
	Net asset		Net			on securities													net assets			assets without			investment
	value,		investment			(both			Total from			Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income			realized and			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)			unrealized)			operations			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/10	$	13.19	$	0.02	(c)	$	2.79		$	2.81		$	16.00		21.30	%	$	128,304		1.14	%(d)		1.14	%(d)		0.18	%(d)		43	%
Year ended 12/31/09		8.38		(0.03	)(c)		4.84			4.81			13.19		57.40			119,369		1.18			1.19			(0.27	)		42
Year ended 12/31/08		15.10		0.01	(c)		(6.73	)		(6.72	)		8.38		(44.50	)		71,546		1.15			1.16			0.05			81
Year ended 12/31/07		14.02		(0.06	)		1.14			1.08			15.10		7.70			158,739		1.10			1.10			(0.38	)		59
Year ended 12/31/06		12.69		(0.08	)		1.41			1.33			14.02		10.48			173,321		1.12			1.12			(0.54	)		116
Series II
Year ended 12/31/10		12.98		(0.01	)(c)		2.74			2.73			15.71		21.03			1,198		1.39	(d)		1.39	(d)		(0.07	)(d)		43
Year ended 12/31/09		8.26		(0.06	)(c)		4.78			4.72			12.98		57.14			417		1.43			1.44			(0.52	)		42
Year ended 12/31/08		14.95		(0.02	)(c)		(6.67	)		(6.69	)		8.26		(44.75	)		115		1.40			1.41			(0.20	)		81
Year ended 12/31/07		13.91		(0.10	)		1.14			1.04			14.95		7.48			130		1.35			1.35			(0.63	)		59
Year ended 12/31/06		12.62		(0.12	)		1.41			1.29			13.91		10.22			134		1.37			1.37			(0.79	)		116

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Calculated using average shares outstanding.
(d)	Ratios are based on average daily net assets (000’s) of $115,309 and $615 for Series I and Series II shares, respectively.

Invesco V.I. Technology Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco V.I. Variable Insurance Funds)

and Shareholders of Invesco V.I. Technology Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Technology Fund (formerly known as AIM V.I. Technology Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Technology Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
			ACTUAL				(5% annual return before expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,322.30	$	6.79	$	1,019.36	$	5.90		1.16	%
Series II		1,000.00		1,322.30		8.25		1,018.10		7.17		1.41

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Technology Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Utilities Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2010, is available at our website, invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

I-VIUTI-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the 12 months ended December 31, 2010, the utilities sector lagged the broad market, as measured by the S&P 500 Index, which posted a double-digit return. Invesco V.I. Utilities Fund had a positive return but lagged the S&P 500 Index for the period. Investment results for the Fund compared favorably to its style-specific benchmark, the S&P 500 Utilities Index. The Fund’s positive results relative to the S&P 500 Utilities Index largely were due to our holdings in the gas utilities and oil, gas and consumable fuels industries. Performance drivers were largely stock specific, though the Fund’s gas and multiutilities industry holdings had the largest positive impact on the Fund’s absolute returns.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	6.30	%
Series II Shares	6.01
S&P 500 Index▼ (Broad Market Index)	15.08
S&P 500 Utilities Index▼ (Style-Specific Index)	5.46
Lipper VUF Utility Funds Category Average▼ (Peer Group)	10.83

^▼ Lipper Inc.

How we invest

In selecting investments, we focus on companies within the electric utility, natural gas, water and telecommunications industries. We emphasize companies with solid balance sheets and operational cash flows that support sustained or increasing dividends. Fundamental research and financial statement analysis are the backbone of our bottom-up investment process. Using a variety of valuation techniques, we estimate the potential return of holdings over a two-year investment period. We construct the portfolio to provide the best combination of price appreciation potential, dividend income and risk profile; the Fund typically maintains full sector exposure. We seek to manage risk by maintaining an average of 30 to 50 positions, low turnover and a rigorous sell discipline.

     We are committed to providing strategic exposure to a traditionally defensive

and income-oriented asset class by using a total return approach to managing the Fund, emphasizing capital appreciation, current income and capital preservation.

Market conditions and your Fund

Equity markets delivered strong returns but were choppy during the fiscal year as investors weighed the competing issues of solid corporate profitability and soft, albeit improving, macroeconomic data. Corporate earnings improved considerably over the past year as high productivity growth and cost-cutting measures made during the economic downturn led to a rebound in margins and profits. However, high unemployment, weak consumer spending and tepid housing data remained as overhangs to the recovery. The sovereign debt crisis also contributed to market volatility as European countries began implementing austerity programs. Most recently, the

market reversed course and rallied again during the last four months of the year on better economic news, ending the fiscal year with double-digit gains.

     All 10 sectors within the S&P 500 Index posted gains for the year. More economically sensitive sectors such as consumer discretionary, industrials and materials had the highest returns, while the less economically sensitive sectors such as health care and utilities had some of the lowest returns. The S&P 500 Utilities sector returned 5.46% for the period, as compared with the 15.08% return for the overall S&P 500 Index.

     The largest contributor to the Fund’s overall return was CMS Energy in the multiutilities industry. During the year, the company announced a reduction in the capital investment plan for its Michigan-based coal plant of $800 million over the next five years. The reduced expenditures will minimize future rate increases for its utility customers. The company also announced a 40% increase in its dividend — its second dividend increase during the year. Both of these events were greeted favorably by investors.

     Another significant contributor to the Fund’s return was Dominion Resources. During the year, the company closed the sale of its Appalachian exploration and production (E&P) acreage, effectively exiting the E&P business. The sale was viewed favorably by the market as it reduces the company’s need for equity financing to fund infrastructure projects, it reduces the company’s commodity sensitivity and it focuses the company on its core regulated businesses.

     The largest detractor from results was E.ON, a diversified utility provider based in Germany. The company recently sold its U.S. operations to PPL Corporation, which reduced debt and streamlined operations.

Portfolio Composition

By sector

Utilities	85.8	%
Telecommunication Services	6.1
Energy	3.8
Money Market Funds
Plus Other Assets Less Liabilities	4.3

Top 10 Equity Holdings*

1.	Dominion Resources, Inc.	4.9	%
2.	Southern Co.	4.6
3.	American Electric Power Co., Inc.	4.6
4.	Xcel Energy, Inc.	4.5
5.	Portland General Electric Co.	4.3
6.	National Grid PLC	4.3
7.	Pepco Holdings, Inc.	4.2
8.	PPL Corp.	3.8
9.	Entergy Corp.	3.6
10.	Edison International	3.6

Total Net Assets	$65.7 million
Total Number of Holdings*		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.

Invesco V.I. Utilities Fund

However, weakness in the stock was driven by uncertainty regarding whether the company’s nuclear plants in Germany will be granted extensions to operate for timeframes beyond those currently permitted.

     Ohio-based power producer FirstEnergy was another detractor from returns. In the first quarter of the year, the company announced an acquisition of Allegheny Energy in an all-stock transaction. While the proposed merger is expected to increase FirstEnergy’s customer base, as well as its power generation in the region, the company’s shares were negatively impacted following the announcement as the market questioned projected synergies of the deal. We trimmed our position in the company during the year.

     There were no major positioning changes during the year; however, we increased the number of Fund holdings by initiating new positions in the telecommunications, electric and multiutilities industries. We continue to emphasize regulated over unregulated utilities given their relatively attractive valuations. At the end of the year, the Fund’s largest industry allocations were in the electric and multiutilities industries.

     As the Fund’s fiscal year closed, a dominant issue surrounding the utility sector was the multiyear decline in both consumer and industrial electrical consumption. While investors debate the ultimate trajectory of electrical demand, a tepid recovery could result in further pressure on state utility commissions to deny rate increases or for utilities to file for lower returns on equity (ROEs). An additional overhang is the lack of transparency on timing and content of environmental regulations. Positively, many companies, as a result of the improvement in credit markets, have reduced their debt and generally improved their financial metrics. The volatility and level of commodity prices also has decreased from peak levels, enabling regulated utilities to better manage their input costs. Valuations for the group have improved and remain modestly attractive relative to historical levels.

     In closing, we would like to thank you for your continued investment in Invesco V.I. Utilities Fund. We are committed to providing investors strategic exposure to a traditionally defensive and income-oriented asset class through our total return approach.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Meggan Walsh
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Utilities Fund. Ms. Walsh joined Invesco in 1991. She has been in the industry since 1987. Ms. Walsh earned a B.S. in finance from the University of Maryland and an M.B.A. from Loyola University of Maryland.

Davis Paddock
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Utilities Fund. Mr. Paddock joined Invesco in 2001. He earned a B.A. and an M.B.A. from The University of Texas at Austin.

Invesco V.I. Utilities Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception

Fund data from 12/30/94, index data from 12/31/94

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a

doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (12/30/94)	6.47	%
10 Years	1.34
5 Years	4.58
1 Year	6.30
Series II Shares
10 Years	1.09	%
5 Years	4.32
1 Year	6.01

Series II shares incepted on April 30, 2004. Performance shown prior to that date is that of Series I shares, restated to reflect the higher 12b-1 fees applicable to Series II. Series I performance reflects any applicable fee waivers or expense reimbursements. The performance of the Fund’s Series I and Series II share classes will differ primarily due to different class expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable

product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.94% and 1.19%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.05% and 1.30%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Utilities Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance

Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least April 30, 2012. See current prospectus for more information.

Invesco V.I. Utilities Fund

Invesco V.I. Utilities Fund’s investment objective is long-term growth of capital and, secondarily, current income.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

An investment by the Fund in exchange-traded funds (ETFs) generally presents the same primary risks as an investment in a mutual fund. In addition, ETFs may be subject to the following: a discount of the ETF’s shares to its net asset value; failure to develop an active trading market for the ETF’s shares; the listing exchange halting trading of the ETF’s shares; failure of the ETF’s shares to track the referenced index; and holding troubled securities in the referenced index. ETFs may involve duplication of management fees and certain other expenses, as the Fund indirectly bears its proportionate share of any expenses paid by the ETFs in which it invests. Further, certain of the ETFs in which each fund may invest are leveraged. The more a fund invests in such leveraged ETFs, the more this leverage will magnify any losses on those investments.

     The Fund’s investments are concentrated in a comparatively narrow segment of the economy, which may make the Fund more volatile.

     The following factors may affect the Fund’s investments in the utilities sector: governmental regulation, economic factors, ability of the issuer to obtain financing, prices of natural resources and risks associated with nuclear power.

     The Fund’s foreign investments may be affected by changes in the foreign country’s exchange rates; political and social instability; changes in economic or taxation policies; difficulties when enforcing obligations; decreased liquidity; and increased volatility. Foreign companies may be subject to less regulation resulting in less publicly available information about the companies.

     The Fund may invest a large percentage of its assets in a limited number of securities or other instruments, which could negatively affect the value of the Fund.

     The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

     The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The S&P 500 Utilities Index is an unmanaged index considered representative of the utilities market.

     The Lipper VUF Utility Funds Category Average represents an average of all of the variable insurance underlying funds in the Lipper Utility Funds category.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry classifications used in this report are generally classified 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Utilities Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks–95.66%
Electric Utilities–45.74%
American Electric Power Co., Inc.		83,238	$	2,994,903
Duke Energy Corp.		104,755		1,865,687
E.ON AG (Germany)		53,357		1,636,266
Edison International		60,747		2,344,834
Entergy Corp.		33,384		2,364,589
Exelon Corp.		37,918		1,578,906
FirstEnergy Corp.		53,693		1,987,715
NextEra Energy, Inc.		18,170		944,658
Northeast Utilities		59,859		1,908,305
Pepco Holdings, Inc.		152,313		2,779,712
Pinnacle West Capital Corp.		10,555		437,505
Portland General Electric Co.		129,466		2,809,412
PPL Corp.		95,357		2,509,796
Progress Energy, Inc.		19,382		842,729
Southern Co.		79,108		3,024,299
				30,029,316
Gas Utilities–6.74%
AGL Resources Inc.		27,701		993,081
Atmos Energy Corp.		16,927		528,122
ONEOK, Inc.		35,322		1,959,311
UGI Corp.		29,949		945,790
				4,426,304
Independent Power Producers & Energy Traders–4.89%
Calpine Corp.(b)		100,072		1,334,960
NRG Energy, Inc.(b)		95,846		1,872,831
				3,207,791
Integrated Telecommunication Services–6.05%
AT&T Inc.		39,055		1,147,436
Qwest Communications International Inc.		113,728		865,470
Verizon Communications, Inc.		54,675		1,956,272
				3,969,178
Multi-Utilities–26.81%
CMS Energy Corp.		41,538		772,607
Dominion Resources, Inc.		75,209		3,212,928
DTE Energy Co.		14,391		652,200
National Grid PLC (United Kingdom)		320,668		2,797,076
PG&E Corp.		37,657		1,801,511
Public Service Enterprise Group Inc.		61,468		1,955,297
Sempra Energy		43,756		2,296,315
TECO Energy, Inc.		26,290		467,962
Wisconsin Energy Corp.		11,231		661,057
Xcel Energy, Inc.		126,774		2,985,528
				17,602,481
Oil & Gas Exploration & Production–1.18%
EQT Corp.		17,347		777,840
Oil & Gas Storage & Transportation–4.25%
Southern Union Co.		44,355		1,067,625
Williams Cos., Inc. (The)		69,599		1,720,487
				2,788,112
Total Common Stocks (Cost $53,504,296)				62,801,022
Money Market Funds–3.98%
Liquid Assets Portfolio–Institutional Class(c)		1,306,377		1,306,377
Premier Portfolio–Institutional Class(c)		1,306,377		1,306,377
Total Money Market Funds (Cost $2,612,754)				2,612,754
TOTAL INVESTMENTS–99.64% (Cost $56,117,050)				65,413,776
OTHER ASSETS LESS LIABILITIES–0.36%				236,462
NET ASSETS–100.00%			$	65,650,238

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Utilities Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $53,504,296)	$	62,801,022
Investments in affiliated money market funds, at value and cost		2,612,754
Total investments, at value (Cost $56,117,050)		65,413,776
Receivable for:
Fund shares sold		71,256
Dividends		294,278
Investment for trustee deferred compensation and retirement plans		40,073
Total assets		65,819,383
Liabilities:
Payable for:
Fund shares reacquired		7,175
Accrued fees to affiliates		81,453
Accrued other operating expenses		27,715
Trustee deferred compensation and retirement plans		52,802
Total liabilities		169,145
Net assets applicable to shares outstanding	$	65,650,238
Net assets consist of:
Shares of beneficial interest	$	55,921,999
Undistributed net investment income		2,119,797
Undistributed net realized gain (loss)		(1,691,783	)
Unrealized appreciation		9,300,225
	$	65,650,238
Net Assets:
Series I	$	63,944,522
Series II	$	1,705,716
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		4,301,218
Series II		115,415
Series I:
Net asset value per share	$	14.87
Series II:
Net asset value per share	$	14.78

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $15,446)	$	2,760,250
Dividends from affiliated money market funds (includes securities lending income of $8,139)		11,649
Total investment income		2,771,899
Expenses:
Advisory fees		398,396
Administrative services fees		199,065
Custodian fees		7,584
Distribution fees — Series II		4,091
Transfer agent fees		21,684
Trustees’ and officers’ fees and benefits		17,522
Other		45,992
Total expenses		694,334
Less: Fees waived		(77,324	)
Net expenses		617,010
Net investment income		2,154,889
Realized and unrealized gain (loss) from:
Net realized gain from:
Investment securities		2,265,663
Foreign currencies		14,613
		2,280,276
Change in net unrealized appreciation (depreciation) of:
Investment securities		(672,208	)
Foreign currencies		(2,357	)
		(674,565	)
Net realized and unrealized gain		1,605,711
Net increase in net assets resulting from operations	$	3,760,600

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Utilities Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	2,154,889		$	2,365,392
Net realized gain (loss)		2,280,276			(3,566,259	)
Change in net unrealized appreciation (depreciation)		(674,565	)		9,982,838
Net increase in net assets resulting from operations		3,760,600			8,781,971
Distributions to shareholders from net investment income:
Series I		(2,309,020	)		(3,146,581	)
Series II		(55,316	)		(69,727	)
Total distributions from net investment income		(2,364,336	)		(3,216,308	)
Distributions to shareholders from net realized gains:
Series I		—			(793,124	)
Series II		—			(19,073	)
Total distributions from net realized gains		—			(812,197	)
Share transactions–net:
Series I		(8,086,914	)		(14,677,265	)
Series II		(32,168	)		(124,013	)
Net increase (decrease) in net assets resulting from share transactions		(8,119,082	)		(14,801,278	)
Net increase (decrease) in net assets		(6,722,818	)		(10,047,812	)
Net assets:
Beginning of year		72,373,056			82,420,868
End of year (includes undistributed net investment income of $2,119,797 and $2,314,631, respectively)	$	65,650,238		$	72,373,056

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Utilities Fund (the ��Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  The Fund’s investment objectives are long-term growth of capital and, secondarily, current income.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).

Invesco V.I. Utilities Fund

	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.

Invesco V.I. Utilities Fund

	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Other Risks — The Fund’s investments are concentrated in a comparatively narrow segment of the economy, which may make the Fund more volatile.
	The Fund may invest a large percentage of its assets in a limited number of securities or other instruments, which could negatively affect the value of the Fund.
	The following factors may affect the Fund’s investments in the utilities sector: governmental regulation, economic factors, ability of the issuer to obtain financing, prices of natural resources and risks associated with nuclear power.
J.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
K.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
L.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of 0.60% of the Fund’s average daily net assets.

Invesco V.I. Utilities Fund

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least April 30, 2012, 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 Series I shares to 0.93% and Series II shares to 1.18% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $77,324.

  At the request of the Trustees of the Trust, Invesco Ltd. agreed to reimburse expenses incurred by the Fund in connection with market timing matters in the Invesco Funds, which may include legal, audit, shareholder reporting, communications and trustee expenses. For the year ended December 31, 2010, Invesco Ltd. did not reimburse any expenses.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $149,065 for services provided by insurance companies.

  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. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	62,616,700	$	2,797,076	$	—	$	65,413,776

Invesco V.I. Utilities Fund

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $2,639 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	2,364,336	$	3,218,442
Long-term capital gain		—		810,063
Total distributions	$	2,364,336	$	4,028,505

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	2,168,788
Net unrealized appreciation — investments		9,041,335
Net unrealized appreciation — other investments		3,499
Temporary book/tax differences		(48,991	)
Capital loss carryforward		(1,436,392	)
Shares of beneficial interest		55,921,999
Total net assets	$	65,650,238

  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 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 utilized $2,208,857 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes.

  The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2017	$	1,436,392

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

Invesco V.I. Utilities Fund

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $8,304,719 and $15,568,065, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	11,048,879
Aggregate unrealized (depreciation) of investment securities		(2,007,544	)
Net unrealized appreciation of investment securities	$	9,041,335
Cost of investments for tax purposes is $56,372,441.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, on December 31, 2010, undistributed net investment income was increased by $14,613 and undistributed net realized gain (loss) was decreased by $14,613. This reclassification had no effect on the net assets of the Fund.

NOTE 9—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		480,106		$	6,843,415			609,839		$	8,004,977
Series II		7,837			110,711			12,671			166,300
Issued as reinvestment of dividends:
Series I		160,460			2,309,020			276,664			3,939,705
Series II		3,865			55,316			6,267			88,800
Reacquired:
Series I		(1,210,979	)		(17,239,349	)		(2,046,142	)		(26,621,947	)
Series II		(14,275	)		(198,195	)		(30,065	)		(379,113	)
Net increase (decrease) in share activity		(572,986	)	$	(8,119,082	)		(1,170,766	)	$	(14,801,278	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 47% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Utilities Fund

NOTE 10—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																											Ratio of			Ratio of
					Net gains																						expenses			expenses
					(losses)																						to average			to average net			Ratio of net
	Net asset				on securities						Dividends			Distributions													net assets			assets without			investment
	value,		Net		(both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			Distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	14.51	$	0.47	$	0.43		$	0.90		$	(0.54	)	$	—		$	(0.54	)	$	14.87		6.30	%	$	63,945		0.92	%(d)		1.04	%(d)		3.25	%(d)		13	%
Year ended 12/31/09		13.38		0.45		1.53			1.98			(0.68	)		(0.17	)		(0.85	)		14.51		14.93			70,671		0.93			1.04			3.35			14
Year ended 12/31/08		23.97		0.52		(8.36	)		(7.84	)		(0.59	)		(2.16	)		(2.75	)		13.38		(32.35	)		80,704		0.93			0.96			2.53			15
Year ended 12/31/07		21.23		0.47		3.94			4.41			(0.47	)		(1.20	)		(1.67	)		23.97		20.64			155,748		0.93			0.94			1.97			30
Year ended 12/31/06		17.83		0.47		4.06			4.53			(0.70	)		(0.43	)		(1.13	)		21.23		25.46			139,080		0.93			0.96			2.40			38
Series II
Year ended 12/31/10		14.43		0.43		0.42			0.85			(0.50	)		—			(0.50	)		14.78		6.01			1,706		1.17	(d)		1.29	(d)		3.00	(d)		13
Year ended 12/31/09		13.30		0.41		1.52			1.93			(0.63	)		(0.17	)		(0.80	)		14.43		14.61			1,702		1.18			1.29			3.10			14
Year ended 12/31/08		23.80		0.46		(8.28	)		(7.82	)		(0.52	)		(2.16	)		(2.68	)		13.30		(32.51	)		1,717		1.18			1.21			2.28			15
Year ended 12/31/07		21.12		0.41		3.91			4.32			(0.44	)		(1.20	)		(1.64	)		23.80		20.32			3,293		1.18			1.19			1.72			30
Year ended 12/31/06		17.76		0.42		4.06			4.48			(0.69	)		(0.43	)		(1.12	)		21.12		25.25			2,462		1.18			1.21			2.15			38

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s) of $64,763 and $1,636 for Series I and Series II shares, respectively.

Invesco V.I. Utilities Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Utilities Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Utilities Fund (formerly known as AIM V.I. Utilities Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Utilities Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,155.40	$	5.00	$	1,020.57	$	4.69		0.92	%
Series II		1,000.00		1,154.50		6.35		1,019.31		5.96		1.17

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Utilities 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Utilities Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Dividend Growth Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

MS-VIDGR-AR-1

NOT FDIC INSURED   MAY LOSE VALUE   NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

Effective June 25, 2010, Meggan Walsh assumed management of Invesco V.I. Dividend Growth Fund as lead portfolio manager, along with portfolio manager Jonathan Harrington and a team of equity analysts. Our team has extensive industry experience and we specifically focus on dividend-paying stocks. We appreciate the opportunity to manage your Fund and look forward to a long-term partnership.

     For the year end December 31, 2010, Invesco V.I. Dividend Growth Fund underperformed its style-specific benchmark, the S&P 500 Index. While we managed the Fund for only part of this time, our comments encompass the entire period. Investments in the industrials and consumer staples sectors were large contributors to Fund returns. However, the Fund’s underperformance for the period was largely due to an underweight in the energy sector relative to the index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	10.48	%
Series II Shares	10.20
S&P 500 Index▼ (Broad Market Index /Style-Specific Index)	15.08

^▼ Lipper Inc.

How we invest

Our total return approach focuses on balancing long-term capital appreciation, current income and capital preservation. The Fund can serve as a conservative cornerstone within a well-diversified asset allocation strategy, complementing more aggressive and cyclical investments.

     We seek companies that we believe have normalized earnings power greater than implied by their current market valuation and that also return capital to shareholders via dividends and share repurchases. All stocks in the portfolio pay a dividend, and the Fund pays a

quarterly dividend to shareholders. We manage risk using a valuation framework, careful stock selection and a rigorous buy-and-sell discipline.

     We look for dividend-paying companies with strong profitability, solid balance sheets and capital allocation policies that support sustained or increasing dividends and share repurchases. We perform extensive fundamental research, incorporating both financial statement analysis and an assessment of the potential reward relative to the downside risk, to determine a fair valuation over our two-year investment horizon for each stock. We believe

Portfolio Composition
By sector
Financials	20.8	%
Consumer Staples	19.0
Consumer Discretionary	12.6
Industrials	12.3
Information Technology	6.8
Energy	6.2
Health Care	6.0
Utilities	5.1
Materials	4.4
Telecommunication Services	1.0
Money Market Funds Plus Other Assets Less Liabilities	5.8

Top Five Industries
1. Regional Banks	5.5	%
2. Packaged Foods & Meats	5.4
3. Integrated Oil & Gas	4.6
4. Pharmaceuticals	4.4
5. Industrial Machinery	4.3

Top 10 Equity Holdings*
1. Kimberly-Clark Corp.	2.6	%
2. SunTrust Banks, Inc.	2.5
3. Automatic Data Processing, Inc.	2.2
4. General Dynamics Corp.	2.0
5. American Electric Power Co., Inc.	2.0
6. Capital One Financial Corp.	2.0
7. Snap-On, Inc.	1.9
8. General Mills, Inc.	1.9
9. International Paper Co.	1.9
10. Johnson & Johnson	1.8

Total Net Assets	$230.9 million
Total Number of Holdings*		76

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.

our process may provide the best combination of dividend income, price appreciation and capital preservation.

     We maintain a rigorous sell discipline and consider selling or trimming a stock when it no longer meets our investment criteria, including when:

n	A stock reaches its fair valuation (target price).
n	The company’s fundamental business prospects deteriorate.
n	A more attractive investment opportunity presents itself.

Market conditions and your Fund

Equity markets delivered strong returns but were choppy during the fiscal year as investors weighed the competing issues of solid corporate profitability and soft, albeit improving, macroeconomic data. Corporate earnings have improved considerably over the past year as high productivity growth and cost-cutting measures made during the economic downturn led to a rebound in margins and profits. However, high unemployment, weak consumer spending and tepid housing data remained as overhangs to the recovery. The sovereign debt crisis also contributed to market volatility as European countries began implementing austerity programs. Most recently, the market reversed course and rallied again during the last four months of the year on better economic news, ending the fiscal year with double-digit gains.

     All 10 sectors within the S&P 500 Index (S&P) posted gains for the year. More economically sensitive sectors such as consumer discretionary, industrials and materials had the highest returns, while the less economically sensitive sectors such as health care and utilities had some of the lowest returns.

     A number of Fund holdings in the industrials sector were among the top contributors during the period, including Caterpillar and Snap-on. Snap-on manufactures and distributes premium professional-grade power and hand tools. The company delivered stronger-than-expected earnings due to robust revenue growth and improving margins, as demand continued to expand. Caterpillar continued to see a rebound in machinery and engine sales, particularly increased emerging market infrastructure and commodity demand. Dealer inventories remained low despite the uptick in orders.

Invesco V.I. Dividend Growth Fund

     Other strong contributors during the period included holdings such as Phillip Morris in the consumer staples sector, and Lubrizol and DuPont in the materials sector. DuPont, a diversified chemicals company, had strong sales growth during the year, particularly in its Asian markets. Higher volumes and better pricing power in its agriculture and nutrition segment also contributed to strong results. DuPont improved its financial position by cutting costs and reducing its net debt. DuPont is no longer held by the Fund.

     Some of the Fund’s information technology (IT) holdings detracted from results, including Google and Microsoft. Shares of Microsoft were negatively impacted by a slowdown in PC demand, as well as market concerns about the company’s positioning in newer form factors such as tablet PCs and smartphones. We eliminated our position in Google, but continued to hold Microsoft at the end of the period.

     The Fund’s exposure to the health care sector also had a negative affect on absolute returns, with WellPoint and Pfizer among the top detractors. We eliminated our position in WellPoint, and reduced our position in Pfizer during the period.

     Since taking over the Fund, we added new consumer staples holdings, such as Coca Cola and Walgreens. We also increased exposure to the financials sector, adding a number of commercial bank holdings including SunTrust and Fifth Third Bancorp. The Fund benefited from these purchases as the companies delivered positive returns. At the end of the period, consumer staples and financials were our largest sector overweights relative to the S&P. We also decreased our exposure to the energy, health care and IT sectors. These sectors represent our largest underweights compared to the index.

     The fiscal period witnessed a broad recovery in corporate earnings led by strong operating leverage. Balance sheets remained strong, and an increasing number of companies deployed cash into higher levels of capital spending, increased dividends and share buyback programs. Merger and acquisition activity and corporate debt issuance also increased. However, the unemployment rate remains high and we are cautiously monitoring the durability of the economy’s recovery.

     We believe one of our competitive advantages is a disciplined approach to evaluating stocks from a total return perspective, focusing not only on their capital appreciation potential, but also on their current dividend income and capital preservation. This approach helps create a well-diversified Fund that can serve as a cornerstone allocation within an overall portfolio. As always, we thank you for your investment in Invesco V.I. Dividend Growth Fund.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Meggan Walsh
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Dividend Growth Fund. Ms. Walsh joined Invesco in 1991. She has been in the industry since 1987. Ms. Walsh earned a B.S. in finance from the University of Maryland and an M.B.A. from Loyola University of Maryland.

Jonathan Harrington
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Dividend Growth Fund. Mr. Harrington joined Invesco in 2001. He earned a B.A. in history and philosophy from Dartmouth College and an M.B.A. from the Kellogg Graduate School of Management at Northwestern University.

Invesco V.I. Dividend Growth Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception

Index data from 2/28/90, Fund data from 3/1/90

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns
As of 12/31/10
Series I Shares
Inception (3/1/90)	6.94	%
10 Years	1.43
5 Years	0.24
1 Year	10.48
Series II Shares
Inception (6/5/00)	1.82	%
10 Years	1.17
5 Years	-0.01
1 Year	10.20

Effective June 1, 2010, Class X and Class Y shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Series I and Series II shares, respectively, of Invesco V.I. Dividend Growth Fund. Returns shown above for Series I and Series II shares are blended returns of the predecessor fund and Invesco V.I. Dividend Growth Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or

higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.67% and 0.92%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.87% and 1.12%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Dividend Growth Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently

offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco V.I. Dividend Growth Fund

Invesco V.I. Dividend Growth Fund’s investment objective is provide reasonable current income and long-term growth of income and capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

A principal risk of investing in the Fund is associated with its common stock investments. In general, stock values fluctuate in response to activities specific to the company as well as general market, economic and political conditions. Stock prices can fluctuate widely in response to these factors.

     The Fund’s investments in foreign securities involve risks that are in addition to the risks associated with domestic securities. One additional risk is currency risk. While the price of Fund shares is quoted in U.S. dollars, the Fund may convert U.S. dollars to a foreign market’s local currency to purchase a security in that market. If the value of that local currency falls relative to the U.S. dollar, the U.S. dollar value of the foreign security will decrease. This is true even if the foreign security’s local price remains unchanged.

     Foreign securities also have risks related to economic and political developments abroad, including expropriations, confiscatory taxation, exchange control regulation, limitations on the use or transfer of Fund assets and any effects of foreign social, economic or political instability. Foreign companies, in general, are not subject to the regulatory requirements of U.S. companies and, as such, there may be less publicly available information about these companies. Moreover, foreign accounting, auditing and financial reporting standards generally are different from those applicable to U.S. companies. Finally, in the event of a default of any foreign debt obligations, it may be more difficult for the Fund to obtain or enforce a judgment against the issuers of the securities.

     Securities of foreign issuers may be less liquid than comparable securities of U.S. issuers and, as such, their price changes may be more volatile. Furthermore, foreign exchanges and broker-dealers are generally subject to less government and exchange scrutiny and regulation than their U.S. counterparts. In addition, differences in clearance and settlement procedures in foreign markets may cause delays in settlement of the Fund’s trades effected in those markets

and could result in losses to the Fund due to subsequent declines in the value of the securities subject to the trades.

     Depositary receipts involve many of the same risks associated with direct investment in foreign securities. In addition, the underlying issuers of certain depositary receipts, particularly unsponsored or unregistered depositary receipts, are under no obligation to distribute shareholder communications to the holders of such receipts, or to pass through to them any voting rights with respect to the deposited securities.

     A derivative instrument often has risks similar to its underlying instrument and may have additional risks, including imperfect correlation between the value of the derivative and the underlying instrument, risks of default by the other party to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which they relate, and risks that the transactions may not be liquid. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments.

     Certain derivative transactions may give rise to a form of leverage. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable SEC rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund’s investment objectives, there is no assurance that the use of derivatives will achieve this result.

     A futures contract is a standardized agreement between two parties to buy or sell a specific quantity of an underlying instrument at a specific price at a specific future time. The value of a futures contract tends to increase and decrease

in tandem with the value of the underlying instrument. Futures contracts are bilateral agreements, with both the purchaser and the seller equally obligated to complete the transaction. Depending on the terms of the particular contract, futures contracts are settled through either physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. A decision as to whether, when and how to use futures involves the exercise of skill and judgment and even a well conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures can be highly volatile, using futures can lower total return, and the potential loss from futures can exceed the Fund’s initial investment in such contracts.

     If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or futures contract on the underlying instrument at an agreed upon price typically in exchange for a premium paid by the Fund. If the Fund sells an option, it sells to another person the right to buy from or sell to the Fund a specific amount of the underlying instrument or futures contract on the underlying instrument at an agreed upon price typically in exchange for a premium received by the Fund. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

     A swap contract is an agreement between two parties pursuant to which the parties exchange payments at specified dates on the basis of a specified notional amount, with the payments calculated by reference to specified securities, indexes, reference rates, currencies or other instruments. Most swap agreements provide that when the period payment dates for both parties are the same, the payments are made on a net basis (i.e., the two payment streams are

continued on following page

Invesco V.I. Dividend Growth Fund

netted out, with only the net amount paid by one party to the other). The Fund’s obligations or rights under a swap contract entered into on a net basis will generally be equal only to the net amount to be paid or received under the agreement, based on the relative values of the positions held by each counterparty. Swap agreements are not entered into or traded on exchanges and there is no central clearing or guaranty function for swaps. Therefore, swaps are subject to credit risk or the risk of default or non-performance by the counterparty. Swaps could result in losses if interest rates or foreign currency exchange rates or credit quality changes are not correctly anticipated by the Fund or if the reference index, security or investments do not perform as expected.

     The performance of the Fund also will depend on whether or not the portfolio managers are successful in applying the Fund’s investment strategies. The Fund is also subject to other risks from its permissible investments, including the risks associated with its investments in convertible securities, fixed-income securities and REITs.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here,and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally classified 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.

Invesco V.I. Dividend Growth Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks–94.22%
Aerospace & Defense–3.52%
General Dynamics Corp.		66,605	$	4,726,291
Raytheon Co.		73,580		3,409,697
				8,135,988
Apparel Retail–0.50%
Ross Stores, Inc.		18,356		1,161,017
Apparel, Accessories & Luxury Goods–0.36%
VF Corp.		9,642		830,948
Asset Management & Custody Banks–3.00%
Federated Investors, Inc.–Class B		141,076		3,691,959
State Street Corp.		69,649		3,227,535
				6,919,494
Auto Parts & Equipment–1.73%
Johnson Controls, Inc.		104,500		3,991,900
Brewers–1.80%
Heineken N.V. (Netherlands)		84,561		4,145,956
Building Products–1.77%
Masco Corp.		322,697		4,085,344
Casinos & Gaming–1.44%
International Game Technology		188,216		3,329,541
Construction, Farm Machinery & Heavy Trucks–1.00%
Caterpillar Inc.		24,596		2,303,661
Consumer Finance–2.91%
American Express Co.		51,618		2,215,444
Capital One Financial Corp.		105,894		4,506,849
				6,722,293
Data Processing & Outsourced Services–2.17%
Automatic Data Processing, Inc.		108,090		5,002,405
Department Stores–0.37%
Nordstrom, Inc.		20,085		851,202
Distributors–0.79%
Genuine Parts Co.		35,348		1,814,766
Diversified Banks–1.98%
Societe Generale (France)		51,832		2,791,179
U.S. Bancorp.		65,659		1,770,823
				4,562,002
Diversified Chemicals–1.68%
E. I. du Pont de Nemours and Co.		77,811		3,881,213
Drug Retail–1.40%
Walgreen Co.		82,776		3,224,953
Electric Utilities–2.90%
American Electric Power Co., Inc.		126,237		4,542,007
Entergy Corp.		30,398		2,153,091
				6,695,098
Electrical Components & Equipment–1.24%
Emerson Electric Co.		50,179		2,868,733
Electronic Components–0.93%
Corning Inc.		111,336		2,151,012
Food Distributors–1.67%
Sysco Corp.		131,375		3,862,425
General Merchandise Stores–1.51%
Target Corp.		58,093		3,493,132
Health Care Equipment–1.60%
Stryker Corp.		68,934		3,701,756
Hotels, Resorts & Cruise Lines–1.12%
Accor S.A. (France)		21,365		952,324
Marriott International Inc.–Class A		39,183		1,627,662
				2,579,986
Household Appliances–0.72%
Whirlpool Corp.		18,752		1,665,740
Household Products–4.21%
Kimberly-Clark Corp.		94,728		5,971,653
Procter & Gamble Co. (The)		58,214		3,744,907
				9,716,560
Industrial Machinery–4.32%
Eaton Corp.		12,704		1,289,583
Pentair, Inc.		115,615		4,221,104
Snap-on, Inc.		78,824		4,459,862
				9,970,549
Insurance Brokers–0.81%
Marsh & McLennan Cos., Inc.		68,075		1,861,170
Integrated Oil & Gas–4.60%
Chevron Corp.		14,501		1,323,216
Eni S.p.A. (Italy)		134,484		2,936,497
Exxon Mobil Corp.		56,488		4,130,403
Total S.A. (France)		42,021		2,231,457
				10,621,573

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Dividend Growth Fund

	Shares		Value
Integrated Telecommunication Services–0.98%
AT&T Inc.		77,368	$	2,273,072
Investment Banking & Brokerage–1.42%
Charles Schwab Corp. (The)		191,811		3,281,886
IT Consulting & Other Services–0.77%
International Business Machines Corp.		12,052		1,768,752
Life & Health Insurance–1.64%
Lincoln National Corp.		80,107		2,227,776
StanCorp Financial Group, Inc.		34,500		1,557,330
				3,785,106
Motorcycle Manufacturers–0.67%
Harley-Davidson, Inc.		44,323		1,536,678
Movies & Entertainment–1.44%
Time Warner, Inc.		103,496		3,329,466
Multi-Utilities–1.74%
Dominion Resources, Inc.		43,336		1,851,314
DTE Energy Co.		47,592		2,156,869
				4,008,183
Office Services & Supplies–0.39%
Pitney Bowes Inc.		37,746		912,698
Oil & Gas Equipment & Services–1.56%
Baker Hughes Inc.		63,005		3,601,996
Oil & Gas Storage & Transportation–0.50%
Southern Union Co.		48,440		1,165,951
Other Diversified Financial Services–0.54%
JPMorgan Chase & Co.		29,199		1,238,622
Packaged Foods & Meats–5.36%
Campbell Soup Co.		70,510		2,450,222
General Mills, Inc.		123,879		4,408,854
Kraft Foods, Inc.–Class A		130,888		4,124,281
Mead Johnson Nutrition Co.		22,372		1,392,657
				12,376,014
Paper Products–1.87%
International Paper Co.		158,962		4,330,125
Pharmaceuticals–4.35%
Bristol-Myers Squibb Co.		111,070		2,941,134
Eli Lilly and Co.		45,741		1,602,765
Johnson & Johnson		68,463		4,234,436
Pfizer, Inc.		73,036		1,278,860
				10,057,195
Property & Casualty Insurance–1.49%
Travelers Cos., Inc. (The)		61,908		3,448,895
Regional Banks–5.51%
Fifth Third Bancorp		248,341		3,645,646
SunTrust Banks, Inc.		194,940		5,752,679
Zions Bancorp.		137,553		3,332,909
				12,731,234
Restaurants–1.64%
Brinker International, Inc.		181,089		3,781,138
Semiconductors–1.24%
Texas Instruments Inc.		88,442		2,874,365
Soft Drinks–1.51%
Coca-Cola Co. (The)		52,920		3,480,548
Specialized Consumer Services–0.36%
H&R Block, Inc.		69,823		831,592
Specialty Chemicals–0.88%
Lubrizol Corp. (The)		19,052		2,036,278
Systems Software–1.73%
Microsoft Corp.		85,342		2,382,748
Oracle Corp.		51,429		1,609,728
				3,992,476
Thrifts & Mortgage Finance–1.50%
Hudson City Bancorp, Inc.		271,878		3,463,726
Tobacco–3.08%
Altria Group, Inc.		148,289		3,650,875
Philip Morris International Inc.		59,035		3,455,319
				7,106,194
Total Common Stocks & Other Equity Interests (Cost $194,051,918)				217,562,607
Money Market Funds–6.08%
Liquid Assets Portfolio–Institutional Class(b)		7,024,571		7,024,571
Premier Portfolio–Institutional Class(b)		7,024,571		7,024,571
Total Money Market Funds (Cost $14,049,142)				14,049,142
TOTAL INVESTMENTS–100.30% (Cost $208,101,060)				231,611,749
OTHER ASSETS LESS LIABILITIES–(0.30)%				(700,136	)
NET ASSETS–100.00%			$	230,911,613

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Dividend Growth Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $194,051,918)	$	217,562,607
Investments in affiliated money market funds, at value and cost		14,049,142
Total investments, at value (Cost $208,101,060)		231,611,749
Foreign currencies, at value		3,116
Receivable for:
Investments sold		223,049
Dividends		376,567
Investment for trustee deferred compensation and retirement plans		1,203
Total assets		232,215,684
Liabilities:
Payable for:
Investments purchased		791,740
Fund shares reacquired		108,006
Accrued fees to affiliates		360,234
Accrued other operating expenses		24,020
Trustee deferred compensation and retirement plans		20,071
Total liabilities		1,304,071
Net assets applicable to shares outstanding	$	230,911,613
Net assets consist of:
Shares of beneficial interest	$	308,449,711
Undistributed net investment income		3,539,933
Undistributed net realized gain (loss)		(104,586,294	)
Unrealized appreciation		23,508,263
	$	230,911,613
Net Assets:
Series I	$	179,517,854
Series II	$	51,393,759
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		12,609,011
Series II		3,619,831
Series I:
Net asset value per share	$	14.24
Series II:
Net asset value per share	$	14.20

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $16,961)	$	5,276,282
Dividends from affiliated money market funds		2,580
Total investment income		5,278,862
Expenses:
Advisory fees		1,269,638
Administrative services fees		443,592
Custodian fees		11,425
Distribution fees — Series II		133,926
Transfer agent fees		1,990
Trustees’ and officers’ fees and benefits		15,095
Other		89,910
Total expenses		1,965,576
Less: Fees waived		(258,126	)
Net expenses		1,707,450
Net investment income		3,571,412
Realized and unrealized gain from:
Net realized gain (loss) from:
Investment securities (includes net gains (losses) from securities sold to affiliates of $(7,576,291))		3,435,671
Foreign currencies		(21,372	)
Option contracts written		55,163
		3,469,462
Change in net unrealized appreciation (depreciation) of:
Investment securities		15,639,042
Foreign currencies		(2,190	)
Foreign currency contracts		(234	)
Option contracts written		(8,235	)
		15,628,383
Net realized and unrealized gain		19,097,845
Net increase in net assets resulting from operations	$	22,669,257

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Dividend Growth Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	3,571,412		$	4,066,768
Net realized gain		3,469,462			(15,201,281	)
Change in net unrealized appreciation		15,628,383			62,262,637
Net increase in net assets resulting from operations		22,669,257			51,128,124
Distributions to shareholders from net investment income:
Series I		(3,255,974	)		(3,466,136	)
Series II		(803,719	)		(986,235	)
Total distributions from net investment income		(4,059,693	)		(4,452,371	)
Share transactions–net:
Series I		(27,025,327	)		(27,292,079	)
Series II		(17,414,065	)		(6,251,855	)
Net increase (decrease) in net assets resulting from share transactions		(44,439,392	)		(33,543,934	)
Net increase (decrease) in net assets		(25,829,828	)		13,131,819
Net assets:
Beginning of year		256,741,441			243,609,622
End of year (includes undistributed net investment income of $3,539,932 and $4,049,585, respectively)	$	230,911,613		$	256,741,441

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Dividend Growth Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as Morgan Stanley Variable Investment Dividend Growth (the “Acquired Fund”), an investment portfolio of Morgan Stanley Variable Investment Series. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”). Upon closing of the Reorganization, holders of the Acquired Fund’s Class X and Y shares received Series I and II shares, respectively, of the Fund. Information for the Acquired Fund’s Class X and Y shares prior to the Reorganization is included with Series I and II shares, respectively, of the Fund throughout this report.

  The Fund’s investment objective is to provide reasonable current income and long-term growth of income and capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the

Invesco V.I. Dividend Growth Fund

	security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to

Invesco V.I. Dividend Growth Fund

	federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
J.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
K.	Call Options Written — The Fund may write call options. A call option gives the purchaser of such option the right to buy, and the writer (the Fund) the obligation to sell, the underlying security at the stated exercise price during the option period. Written call options are recorded as a liability in the Statement of Assets and Liabilities. The amount of the liability is subsequently valued to reflect the current market value of the option written. If a written call option expires on the stipulated expiration date, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or a loss if the closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written option is exercised, the Fund realizes a gain or a loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received. Realized gains and losses on these contracts are included in the Statement of Operations. A risk in writing a 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.
L.	Collateral — To the extent the Fund has pledged or segregated a security as collateral and that security is subsequently sold, it is the Fund’s practice to replace such collateral no later than the next business day.

Invesco V.I. Dividend Growth Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $250 million		0	.545%
Next $750 million		0	.42%
Next $1 billion		0	.395%
Over $2 billion		0	.37%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee of $558,503 to Morgan Stanley Investment Advisors Inc. (“MSIA”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed, through at least June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 0.67% and Series II shares to 0.92% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds. Prior to the Reorganization, investment advisory fees paid by the Acquired Fund were reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class Shares.

  For the year ended December 31, 2010, the Adviser and MSIA waived advisory fees of $257,255 and $871, respectively.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $35,818 for accounting and fund administrative services and reimbursed $325,594 for services provided by insurance companies. Prior to the Reorganization, the Acquired Fund paid an administration fee of $82,180 to MSIM and JPMorgan Investor Services Co.

  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. Prior to the Reorganization, the Acquired Fund paid $207 to Morgan Stanley Trust, which served as the Acquired Fund’s transfer agent. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. Prior to the Reorganization, the Acquired Fund paid distribution fees of $60,866 to Morgan Stanley Distributors Inc. based on the annual rate of 0.25% of the Acquired Fund’s average daily net assets of Class Y Shares. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

  Level 1 — Prices are determined using quoted prices in an active market for identical assets.

Invesco V.I. Dividend Growth Fund

Level 2 —

Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.

Level 3 —

Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	225,636,789	$	5,974,960	$	—	$	231,611,749

NOTE 4—Derivative Investments

Effect of Derivative Instruments for the year ended December 31, 2010

The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain on
	Statement of Operations
	Options*
Realized Gain
Equity risk	$	55,163
Change in Unrealized Appreciation (Depreciation)
Equity risk		(8,235	)
Total	$	46,928

*  The average value of options outstanding during the period was $2,872.

Transactions During the Period
	Call Option Contracts
	Number of			Premiums
	Contracts			Received
Options written, outstanding at beginning of period		58		$	11,657
Written		498			111,121
Closed		(253	)		(52,636	)
Expired		(303	)		(70,142	)
End of period		0		$	0

NOTE 5—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $2,507,025 and securities sales of $13,571,530, which resulted in net realized gains (losses) of $(7,576,291).

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

Invesco V.I. Dividend Growth Fund

  For the period June 1, 2010, the Fund paid legal fees of $734 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 7—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank (“SSB”), the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	4,059,693	$	4,452,371

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	3,554,972
Net unrealized appreciation — investments		23,510,689
Net unrealized appreciation (depreciation)–other investments		(2,426	)
Temporary book/tax differences		(11,431	)
Post-October deferrals		(3,441	)
Capital loss carryforward		(104,586,461	)
Shares of beneficial interest		308,449,711
Total net assets	$	230,911,613

  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 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 utilized $1,775,537 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2011	$	48,222,156
December 31, 2016		19,116,895
December 31, 2017		37,247,410
Total capital loss carryforward	$	104,586,461

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $175,171,271 and $229,424,375, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	27,087,142
Aggregate unrealized (depreciation) of investment securities		(3,576,453	)
Net unrealized appreciation of investment securities	$	23,510,689
Cost of investments for tax purposes is $208,101,060.

Invesco V.I. Dividend Growth Fund

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions and net operating losses, on December 31, 2010, undistributed net investment income was decreased by $21,372, undistributed net realized gain (loss) was increased by $105,161,822 and shares of beneficial interest decreased by $105,140,450. This reclassification had no effect on the net assets of the Fund.

NOTE 11—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		42,162		$	556,286			40,020		$	445,763
Series II		41,409			523,697			64,575			656,925
Issued as reinvestment of dividends:
Series I		254,971			3,255,974			321,236			3,466,136
Series II		63,037			803,719			91,572			986,235
Reacquired:
Series I		(2,334,157	)		(30,837,587	)		(2,833,291	)		(31,203,978	)
Series II		(1,409,722	)		(18,741,481	)		(723,234	)		(7,895,015	)
Net increase (decrease) in share activity		(3,342,300	)	$	(44,439,392	)		(3,039,122	)	$	(33,543,934	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 93% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Dividend Growth Fund

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																					Ratio of			Ratio of
																					expenses			expenses
					Net gains																to average			to average net			Ratio of net
	Net asset				(losses) on						Dividends										net assets			assets without			investment
	value,		Net		securities (both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	13.13	$	0.21	$	1.14		$	1.35		$	(0.24	)	$	14.24		10.48	%	$	179,518		0.68	%(d)		0.79	%(d)		1.59	%(d)		78	%
Year ended 12/31/09		10.78		0.20		2.37			2.57			(0.22	)		13.13		24.30			192,279		0.67			0.67			1.80			44
Year ended 12/31/08		17.01		0.25		(6.41	)		(6.16	)		(0.07	)		10.78		(36.35	)		184,579		0.63			0.63			1.72			61
Year ended 12/31/07		16.53		0.22		0.48			0.70			(0.22	)		17.01		4.22			368,737		0.58			0.58			1.27			48
Year ended 12/31/06		15.09		0.21		1.45			1.66			(0.22	)		16.53		11.09			471,931		0.59			0.59			1.37			114
Series II
Year ended 12/31/10		13.09		0.19		1.12			1.31			(0.20	)		14.20		10.20			51,394		0.93	(d)		1.04	(d)		1.34	(d)		78
Year ended 12/31/09		10.75		0.17		2.36			2.53			(0.19	)		13.09		23.94			64,463		0.92			0.92			1.55			44
Year ended 12/31/08		16.98		0.21		(6.38	)		(6.17	)		(0.06	)		10.75		(36.46	)		59,030		0.88			0.88			1.47			61
Year ended 12/31/07		16.51		0.17		0.48			0.65			(0.18	)		16.98		3.90			116,271		0.83			0.83			1.02			48
Year ended 12/31/06		15.07		0.17		1.45			1.62			(0.18	)		16.51		10.83			136,660		0.84			0.84			1.12			114

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s) of $179,391 and $53,570 for Series I and Series II shares, respectively.

NOTE 13—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would acquire all of the assets and liabilities of Invesco V.I. Financial Services Fund and Invesco V.I. Select Dimensions Dividend Growth Fund (the “Target Funds”) in exchange for shares of the Fund. The Agreement requires approval of the Target Funds’ shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

NOTE 14—Change in Independent Registered Public Accounting Firm (unaudited)

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Invesco V.I. Dividend Growth Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)
and Shareholders of Invesco V.I. Dividend Growth Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Dividend Growth Fund (formerly known as Dividend Growth Portfolio, one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 26, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Dividend Growth Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
			ACTUAL				(5% annual return before expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,189.60	$	3.64	$	1,021.88	$	3.36		0.66	%
Series II		1,000.00		1,187.30		5.02		1,020.62		4.63		0.91

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Dividend 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100.00%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Dividend Growth Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Global Dividend Growth Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

MS-VIGDG-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

As part of Invesco’s June 1, 2010, acquisition of Morgan Stanley’s retail asset management business, Morgan Stanley V.I. Global Dividend Growth Fund was reorganized as Invesco V.I. Global Dividend Growth Fund. A listing of your Fund’s managers appears later in this report.

     For the fiscal year ended December 31, 2010, Invesco V.I. Global Dividend Growth Fund outperformed its benchmark, the MSCI World Index.

     Stock selection within the consumer staples and information technology (IT) sectors contributed positively to performance, while holdings in the financials, utilities, telecommunication services and consumer discretionary sectors detracted during the period.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	12.07	%
Series II Shares	11.88
MSCI World Index▼ (Broad Market and Style-Specific Index)	11.76

^▼ Lipper Inc.

How we invest

The Fund invests primarily in stocks of mid- and large-capitalization global companies with a record of stable earnings and strong balance sheets that are offering attractive valuations relative to the broad market and peers.

     We take a bottom-up, research-driven approach. We begin with a universe of global equity securities with greater than $1 billion in market capitalization and up to 10 years of financial statement information from both developed and emerging markets. We adjust each company’s financial history for inflation rates and select accounting conventions, creating a comparable basis for analysis. We then rank the universe using a proprietary three-factor valuation ranking model that combines the company’s implied return, price/book and price/earnings. Attractively ranked companies are then subjected to rigorous fundamental research focused on

evaluating the sustainability of company profitability. The most attractive stocks from the valuation screen, that have also successfully passed rigorous fundamental research, are candidates for inclusion in the Fund. We seek to achieve appropriate diversification relative to the benchmark index and take a long-term investment horizon in evaluating companies, resulting in relatively low rates of portfolio turnover.

     We strive to maintain a consistent investment discipline through varying market conditions and an appropriate level of overall portfolio diversification. Individual holdings are selected based on their own merits, however, and not on projections of country or sector performance.

     Our sell discipline is a replication of the security selection process in that we look to trim or liquidate positions in the portfolio based on valuation, fundamentals or portfolio design considerations.

Market conditions and your Fund

After rallying for much of 2009 on prospects of improving global economic conditions, global equity markets faced headwinds in 2010. Notably, several southern European economies, including Greece, Spain, Portugal and Italy, faced solvency concerns amid massive fiscal deficits. Although the U.S. economy continued with a positive growth rate in 2010, investors continued to be concerned about high unemployment and a weak housing market. The period ended with a market upswing as a flurry of private sector merger and acquisition activity began — a sign of cash-rich corporations and strong balance sheets.

     In contrast, China enacted credit tightening measures in early 2010 in an attempt to slow its economy. The combination of robust domestic economic developments and largely upbeat corporate earnings supported Asian equity markets during the period. Fears of potential overheating in emerging market economies, coupled with concerns of a potential double-dip recession in developed economies, however, continued to foster uncertainty about the pace and vigor of a global economic recovery.

     At the beginning of the year, riskier assets, like stocks, outperformed securities considered safe havens, such as U.S. Treasuries. This trend continued through the middle of April 2010. Renewed credit problems overseas and the market correction that occurred in May, June and August, however, created a more uncertain environment, which prompted many investors to favor safety over risk. Although the path to economic recovery remains uncertain, several positive trends fueled resurgence in global equity markets during the last few months of the reporting period. As bottom-up investors, we have seen the number of potential investment opportunities in

Portfolio Composition

By sector

Financials	18.8	%
Energy	14.6
Health Care	10.9
Consumer Discretionary	10.1
Information Technology	9.9
Industrials	8.8
Materials	8.2
Consumer Staples	7.8
Telecommunication Services	5.4
Utilities	3.8
Money Market Funds Plus
Other Assets Less Liabilities	1.7

Top 10 Equity Holdings*

1.	Royal Dutch Shell PLC	2.3	%
2.	ACE Ltd.	2.2
3.	Chevron Corp.	2.2
4.	BHP Billiton PLC	2.1
5.	General Dynamics Corp.	2.0
6.	Archer-Daniels-Midland Co.	2.0
7.	Oracle Corp.	1.9
8.	Coach, Inc.	1.9
9.	Nissan Motor Co., Ltd.	1.9
10.	ConocoPhillips	1.8

Top Five Countries*

1.	United States	37.7	%
2.	Japan	13.8
3.	United Kingdom	8.6
4.	Switzerland	5.7
5.	France	4.5

Total Net Assets	$85.6 million
Total Number of Holdings*		112

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.

Invesco V.I. Global Dividend Growth Fund

attractive companies increase materially in recent months. With above-average market volatility likely to persist for some time, we believe our investment approach is well suited for the current climate.

     We stayed true to our investment process — seeking quality-oriented stocks — and the Fund benefited overall. Stock selection within the consumer staples and IT sectors made the largest contribution to the Fund’s relative results. Within IT, U.S.-based Oracle, an enterprise software company, acquired Sun Microsystems and Silver Creek Systems. Stock selection and an underweight position in consumer discretionary and financials detracted from relative performance, failing to keep pace with the benchmark’s gains. Within the financials sector, U.K.-based Prudential, an international financial services company with principal operations in the U.K., U.S. and Asia, was liquidated from the Fund. The Fund’s negative performance in the energy sector largely was due to our allocation to energy corporation BP, which faced a difficult environment in the wake of the well disaster in the Gulf of Mexico. BP is no longer held by the Fund. On an absolute basis, all sectors in the Fund posted positive returns during the year with the exception of our utilities holdings.

     From a geographical perspective, all global regions in the Fund generated positive absolute performance during the fiscal year. Japan contributed the most to absolute returns, while North America contributed the least on a relative basis. The Fund’s exposure to Greece, Canada and the U.S. detracted from performance during the year. Conversely, our stock selection in Spain, Germany and the U.K. helped Fund performance versus the benchmark index. The Fund also benefited from favorable Japanese stock selection throughout the period, leading to profit taking in a number of stocks. The allocation to Japan remained neutral to the benchmark during the year. Additionally, exposures to nonbenchmark areas, such as emerging markets, were positive contributors during the period.

     From a positioning perspective, the Fund remained underweight in financials relative to the benchmark index. From a geographic perspective, the Fund maintained a healthy weighting in emerging markets and a modestly overweight position in Japan, while being underweight in Canada and the U.S., relative to the benchmark index. Fund holdings are determined based on the merits of individual securities and not on a country or sector basis.

     Market participants are vacillating between inconsistent economic data and strong momentum in earnings from the corporate sector. At the same time, balance sheet repair has been actively pursued on multiple fronts by consumers, financial institutions and select governments. While these ultimately healthy initiatives may temper the pace of economic recovery in the near term, falling government bond yields have lowered mortgage rates to even more affordable levels, thus providing some level of support for the housing market. In the face of these conflicting signals, we believe above-average equity market and foreign exchange volatility may persist. Our emphasis on profitability and attractive valuations has the potential to serve clients well over the long-term.

     We would like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult your financial adviser to discuss your individual financial program.

     We welcome any new investors who joined the Fund during the year, and to all of our shareholders, we would like to say thank you for your continued investment in the Invesco V.I. Global Dividend Growth Fund.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Ingrid Baker
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Global Dividend Growth Fund. Ms. Baker joined Invesco in 1999. She earned a B.A. in international politics from Oberlin College and an M.B.A. from the University of Navarra.

W. Lindsay Davidson
Portfolio manager, is manager of Invesco V.I. Global Dividend Growth Fund. Mr. Davidson joined Invesco in 1983. He began his investment career in 1974. Mr. Davidson earned a degree in economics with honors from Edinburgh University.

Sargent McGowan
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Global Dividend Growth Fund. Mr. McGowan joined Invesco in 2002. He began his investment career in 1996. Mr. McGowan earned a B.S. in commerce from the University of Virginia and an M.B.A. in investment management from the University of North Carolina.

Anuja Singha
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Global Dividend Growth Fund. Ms. Singha joined Invesco in 1998. She earned a B.A. in economics from Mills College and a Ph.D. in economics from Emory University.

Stephen Thomas
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Global Dividend Growth Fund. Mr. Thomas joined Invesco in 2000. He began his investment career in 1997. Mr. Thomas earned a B.B.A. in banking/ finance and an M.B.A. from the University of Mississippi.

Invesco V.I. Global Dividend Growth Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Fund data from 2/23/94, index data from 2/28/94

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (2/23/94)			6.07	%
	10	Years	2.91
	5	Years	0.12
	1	Year	12.07
Series II Shares
Inception (6/5/00)			2.52	%
	10	Years	2.66
	5	Years	-0.13
	1	Year	11.88

Effective June 1, 2010, Class X and Class Y shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Series I and Series II shares, respectively, of Invesco V.I. Global Dividend Growth Fund. Returns shown above for Series I and Series II shares are blended returns of the predecessor fund and Invesco V.I. Global Dividend Growth Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future

results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.94% and 1.19%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.16% and 1.41%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Global Dividend Growth Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable

Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246.

     As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco V.I. Global Dividend Growth Fund

Invesco V.I. Global Dividend Growth Fund’s investment objective is to provide reasonable current income and long-term growth of income and capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

A principal risk of investing in the Fund is associated with its common stock investments. In general, stock values fluctuate in response to activities specific to the company as well as general market, economic and political conditions. Stock prices can fluctuate widely in response to these factors.

     Investing in securities of small and medium capitalization companies involves greater risks than is customarily associated with investing in larger, more established companies. Often, the stocks of these companies, particularly small companies, may be more volatile and less liquid than the stocks of more established companies and may be subject to more abrupt and erratic price movements. These stocks may have returns that vary, sometimes significantly, from the overall stock market. Often small and medium capitalization companies and the industries in which they are focused are still evolving and, while this may offer better growth potential than larger, more established companies, it also may make them more sensitive to changing market conditions.

     The Fund emphasizes a value style of investing, which focuses on undervalued companies with characteristics for improved valuations. This style of investing is subject to the risk that the valuations never improve or that the returns on “value” equity securities are less than returns on other styles of investing or the overall stock market. Value stocks also may decline in price, even though in theory they are already underpriced. Different types of stocks tend to shift in and out of favor depending on market and economic conditions and the Fund’s performance may sometimes be lower or higher than that of other types of funds (such as those emphasizing growth stocks).

     The Fund’s investments in foreign and emerging market securities involve risks that are in addition to the risks associated with domestic securities. One additional risk is currency risk. While the price of Fund shares is quoted in U.S. dollars, the Fund may convert U.S. dollars to a foreign market’s local currency to purchase a security in that market. If the value of that local currency falls relative

to the U.S. dollar, the U.S. dollar value of the foreign security will decrease. This is true even if the foreign security’s local price remains unchanged.

     Foreign securities also have risks related to economic and political developments abroad, including expropriations, confiscatory taxation, exchange control regulation, limitations on the use or transfer of Fund assets and any effects of foreign social, economic or political instability. Foreign companies, in general, are not subject to the regulatory requirements of U.S. companies and, as such, there may be less publicly available information about these companies. Moreover, foreign accounting, auditing and financial reporting standards generally are different from those applicable to U.S. companies. Finally, in the event of a default of any foreign debt obligations, it may be more difficult for the Fund to obtain or enforce a judgment against the issuers of the securities.

     Securities of foreign issuers may be less liquid than comparable securities of U.S. issuers and, as such, their price changes may be more volatile. Furthermore, foreign exchanges and broker-dealers are generally subject to less government and exchange scrutiny and regulation than their U.S. counterparts. In addition, differences in clearance and settlement procedures in foreign markets may cause delays in settlement of the Fund’s trades effected in those markets and could result in losses to the Fund due to subsequent declines in the value of the securities subject to the trades.

     The foreign securities in which the Fund may invest may be issued by issuers located in emerging market or developing countries. Compared to the United States and other developed countries, emerging market or developing countries may have relatively unstable governments, economies based on only a few industries and securities markets that trade a small number of securities. Securities issued by companies located in these countries tend to be especially volatile and may be less liquid than securities traded in developed countries. In the past, securities in these countries have been characterized by greater potential loss than securities of companies located in developed countries.

     Depositary receipts involve many of the same risks as those associated with direct investment in foreign securities. In addition, the underlying issuers of certain depositary receipts, particularly unsponsored or unregistered depositary receipts, are under no obligation to distribute shareholder communications to the holders of such receipts, or to pass through to them any voting rights with respect to the deposited securities.

     Hedging the Fund’s currency risks involves the risk of mismatching the Fund’s objectives under a forward or futures contract with the value of securities denominated in a particular currency. Furthermore, such transactions reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is an additional risk to the effect that currency contracts create exposure to currencies in which the Fund’s securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts.

     A derivative instrument often has risks similar to its underlying instrument and may have additional risks, including imperfect correlation between the value of the derivative and the underlying instrument, risks of default by the other party to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which they relate, and risks that the transactions may not be liquid. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments.

     Certain derivative transactions may give rise to a form of leverage. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable SEC rules and regulations, or may cause the

continued on following page

Invesco V.I. Global Dividend Growth Fund

Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund’s investment objectives, there is no assurance that the use of derivatives will achieve this result.

     The performance of the Fund also will depend on whether or not the Adviser is successful in applying the Fund’s investment strategies. The Fund is also subject to other risks from its permissible investments, including the risks associated with its investments in real estate investment trusts (REITs) and foreign real estate companies.

About indexes used in this report

The MSCI World Index^SM is an unmanaged index considered representative of stocks of developed countries.

     The Fund is not managed to track the performance of any particular index,

including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry classifications used in this report are generally classified 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Global Dividend Growth Fund

Schedule of Investments

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–96.74%
Australia–2.64%
Australia & New Zealand Banking Group Ltd.		33,468	$	799,294
Macquarie Group Ltd.		18,441		698,061
Telstra Corp. Ltd.		267,603		763,634
				2,260,989
Bermuda–0.88%
PartnerRe Ltd.		9,379		753,603
Brazil–1.49%
Banco Santander Brasil S.A.(a)		19,300		262,573
Companhia Energetica de Minas Gerais–ADR		13,391		222,157
PDG Realty S.A. Empreendimentos e Participacoes		45,100		276,034
Petroleo Brasileiro S.A.–ADR		6,836		258,674
Vale S.A.–ADR		7,461		257,927
				1,277,365
Canada–2.30%
Nexen Inc.		46,162		1,058,527
Toronto-Dominion Bank (The)		12,188		910,147
				1,968,674
China–1.05%
China Construction Bank Corp.–Class H		158,000		141,454
China Minsheng Banking Corp., Ltd.–Class H		186,000		159,132
China Unicom (Hong Kong) Ltd.		128,000		182,540
CNOOC Ltd.		80,000		190,350
Renhe Commercial Holdings Co., Ltd.		1,260,000		220,461
				893,937
Finland–0.89%
Nokia Oyj–ADR		73,450		758,004
France–4.52%
BNP Paribas		15,934		1,017,237
Bouygues S.A.		21,230		916,768
Sanofi-Aventis S.A.		14,051		902,281
Total S.A.		19,349		1,027,497
				3,863,783
Germany–1.28%
Salzgitter AG		14,197		1,095,988
Hong Kong–2.76%
Chaoda Modern Agriculture (Holdings) Ltd.		158,000		118,508
Cheung Kong (Holdings) Ltd.		58,000		892,708
China Dongxiang Group Co.		301,000		130,115
Esprit Holdings Ltd.		255,900		1,218,132
				2,359,463
Indonesia–0.17%
PT Telekomunikasi Indonesia Tbk		166,500		147,307
Ireland–0.21%
Dragon Oil PLC(b)		21,795		182,814
Italy–1.01%
Eni S.p.A.		39,600		864,677
Japan–13.77%
Canon Inc.		16,900		866,373
FUJIFILM Holdings Corp.		24,500		885,971
Mitsubishi Corp.		48,000		1,299,470
Mitsubishi UFJ Financial Group, Inc.		235,900		1,275,528
Murata Manufacturing Co., Ltd.		12,300		862,015
Nippon Telegraph & Telephone Corp.		28,400		1,299,307
Nippon Yusen Kabushiki Kaisha		251,000		1,112,945
Nissan Motor Co., Ltd.		166,400		1,584,274
Seven & I Holdings Co., Ltd.		29,300		783,114
Sumitomo Chemical Co., Ltd.		210,000		1,034,610
Takeda Pharmaceutical Co., Ltd.		15,800		777,448
				11,781,055
Mexico–0.49%
America Movil S.A.B. de C.V.–Series L		72,600		208,100
Desarrolladora Homex S.A.B. de C.V.–ADR(b)		6,128		207,188
				415,288
Netherlands–1.77%
TNT N.V.		30,750		812,875
Unilever N.V.		22,605		703,829
				1,516,704
Norway–2.09%
Statoil A.S.A.		32,500		771,973
Yara International A.S.A.		17,596		1,017,755
				1,789,728
Poland–0.31%
KGHM Polska Miedz S.A.		4,556		266,944

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Global Dividend Growth Fund

	Shares		Value
Russia–0.67%
Gazprom OAO–ADR		7,933	$	200,308
Magnitogorsk Iron & Steel Works–GDR		13,466		195,930
Rosneft Oil Co.–GDR		24,509		175,485
				571,723
South Africa–1.33%
Barloworld Ltd.		26,350		268,000
Sasol Ltd.		3,911		205,586
Standard Bank Group Ltd.		13,901		226,953
Steinhoff International Holdings Ltd.(b)		67,410		250,709
Tiger Brands Ltd.		6,330		186,061
				1,137,309
South Korea–2.21%
Dongbu Insurance Co., Ltd.		3,680		145,916
Hyundai Mipo Dockyard Co., Ltd.		1,451		286,390
Hyundai Mobis		1,430		358,476
LG Electronics Inc.		1,140		119,721
Lotte Shopping Co., Ltd.		222		92,524
POSCO		571		244,542
Samsung Electronics Co., Ltd.		401		335,315
Shinhan Financial Group Co., Ltd.		4,150		193,440
SK Telecom Co., Ltd.–ADR		6,166		114,873
				1,891,197
Spain–3.12%
Banco Santander S.A.		85,354		906,919
Iberdrola S.A.		122,623		945,157
Telefonica S.A.		35,902		815,377
				2,667,453
Switzerland–5.71%
ACE Ltd.		30,673		1,909,394
Holcim Ltd.		12,746		963,107
Swisscom AG		2,485		1,093,139
Zurich Financial Services AG		3,555		920,878
				4,886,518
Taiwan–0.91%
AU Optronics Corp.–ADR		16,186		168,658
HTC Corp.		9,600		296,332
Powertech Technology Inc.		70,000		232,211
U-Ming Marine Transport Corp.		39,000		84,938
				782,139
Thailand–0.37%
Bangkok Bank PCL–NVDR		37,900		184,817
PTT PCL		12,000		127,384
				312,201
Turkey–0.19%
Asya Katilim Bankasi A.S.		89,738		165,301
United Kingdom–8.59%
Barclays PLC		149,058		613,228
BHP Billiton PLC		44,987		1,793,559
GlaxoSmithKline PLC		38,702		751,764
Imperial Tobacco Group PLC		47,736		1,464,678
National Grid PLC		83,980		732,195
Royal Dutch Shell PLC–Class A		59,650		1,991,076
				7,346,500
United States–36.01%
3M Co.		11,954		1,031,630
Apache Corp.		8,113		967,313
Archer-Daniels-Midland Co.		55,232		1,661,379
Avon Products, Inc.		24,441		710,255
Bank of America Corp.		81,874		1,092,199
Bank of New York Mellon Corp. (The)		30,694		926,959
Best Buy Co., Inc.		18,073		619,723
Chevron Corp.		20,609		1,880,571
Coach, Inc.		28,961		1,601,833
ConocoPhillips		22,739		1,548,526
CVS Caremark Corp.		31,283		1,087,710
Energen Corp.		27,473		1,325,847
GameStop Corp.–Class A(b)		41,113		940,665
General Dynamics Corp.		24,511		1,739,301
Gilead Sciences, Inc.(b)		21,827		791,010
Johnson & Johnson		24,466		1,513,222
Merck & Co., Inc.		42,510		1,532,060
Microsoft Corp.		32,662		911,923
Morgan Stanley		36,835		1,002,280
Oracle Corp.		52,179		1,633,203
Pfizer, Inc.		44,601		780,964
Stryker Corp.		15,272		820,106
Valero Energy Corp.		43,866		1,014,182
W. R. Berkley Corp.		25,376		694,795
WellPoint Inc.(b)		26,346		1,498,034
Western Digital Corp.(b)		43,755		1,483,295
				30,808,985
Total Common Stocks & Other Equity Interests (Cost $70,490,051)				82,765,649
Preferred Stocks–1.60%
Brazil–0.18%
Usinas Siderurgicas de Minas Gerais S.A.–Class A–2.67% Pfd.		13,300		153,511

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Global Dividend Growth Fund

	Shares		Value
Germany–1.42%
Porsche Automobil Holding SE–0.14% Pfd.		15,202	$	1,211,967
Total Preferred Stocks (Cost $832,810)				1,365,478
Money Market Funds–1.73%
Liquid Assets Portfolio–Institutional Class(c)		742,180		742,180
Premier Portfolio–Institutional Class(c)		742,180		742,180
Total Money Market Funds (Cost $1,484,360)				1,484,360
TOTAL INVESTMENTS–100.07% (Cost $72,807,221)				85,615,487
OTHER ASSETS LESS LIABILITIES–(0.07)%				(56,958	)
NET ASSETS–100.00%			$	85,558,529

Investment Abbreviations:

ADR	– American Depositary Receipt
GDR	– Global Depositary Receipt
NVDR	– Non-Voting Depositary Receipt
Pfd.	– Preferred

Notes to Schedule of Investments:

(a)	Consists of one or more class of securities traded together as a unit; stocks with attached warrants.
(b)	Non-income producing security.
(c)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Global Dividend Growth Fund

Statement of Assets and Liabilities

For the year ended December 31, 2010

Assets:
Investments, at value (Cost $71,322,861)	$	84,131,127
Investments in affiliated money market funds, at value and cost		1,484,360
Total investments, at value (Cost $72,807,221)		85,615,487
Foreign currencies, at value (Cost $11,144)		11,366
Receivable for:
Fund shares sold		2,850
Dividends		140,900
Investment for trustee deferred compensation and retirement plans		1,147
Total assets		85,771,750
Liabilities:
Payable for:
Fund shares reacquired		10,091
Accrued fees to affiliates		144,917
Accrued other operating expenses		53,411
Trustee deferred compensation and retirement plans		4,802
Total liabilities		213,221
Net assets applicable to shares outstanding	$	85,558,529
Net assets consist of:
Shares of beneficial interest	$	82,667,230
Undistributed net investment income		2,734,801
Undistributed net realized gain (loss)		(12,653,101	)
Unrealized appreciation		12,809,599
	$	85,558,529
Net Assets:
Series I	$	56,996,368
Series II	$	28,562,161
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		6,080,652
Series II		3,075,790
Series I:
Net asset value per share	$	9.37
Series II:
Net asset value per share	$	9.29

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $186,983)	$	2,649,292
Dividends from affiliated money market funds (includes securities lending income of $20,238)		22,893
Total investment income		2,672,185
Expenses:
Advisory fees		565,371
Administrative services fees		178,513
Custodian fees		42,756
Distribution fees — Series II		70,731
Transfer agent fees		1,659
Trustees’ and officers’ fees and benefits		15,272
Other		92,014
Total expenses		966,316
Less: Fees waived		(101,244	)
Net expenses		865,072
Net investment income		1,807,113
Realized and unrealized gain from:
Net realized gain (loss) from:
Investment securities		7,882,795
Foreign currencies		(99,379	)
Foreign currency contracts		1,448,689
		9,232,105
Change in net unrealized appreciation (depreciation) of:
Investment securities		(1,338,996	)
Foreign currencies		(414,142	)
		(1,753,138	)
Net realized and unrealized gain		7,478,967
Net increase in net assets resulting from operations	$	9,286,080

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Global Dividend Growth Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	1,807,113		$	3,048,064
Net realized gain		9,232,105			3,073,323
Change in net unrealized appreciation (depreciation)		(1,753,138	)		6,730,620
Net increase in net assets resulting from operations		9,286,080			12,852,007
Distributions to shareholders from net investment income:
Series I		(1,056,638	)		(2,992,150	)
Series II		(465,368	)		(1,372,445	)
Total distributions from net investment income		(1,522,006	)		(4,364,595	)
Share transactions–net:
Series I		(8,688,410	)		(7,388,490	)
Series II		(4,277,405	)		(2,195,301	)
Net increase (decrease) in net assets resulting from share transactions		(12,965,815	)		(9,583,791	)
Net increase (decrease) in net assets		(5,201,741	)		(1,096,379	)
Net assets:
Beginning of year		90,760,270			91,856,649
End of year (includes undistributed net investment income of $2,734,801 and $1,096,960, respectively)	$	85,558,529		$	90,760,270

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Global Dividend Growth Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as Morgan Stanley Variable Investment Dividend Growth Portfolio (the “Acquired Fund”), an investment portfolio of Morgan Stanley Variable Investment Series. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class X and Y shares received Series I and II shares, respectively, of the Fund. Information for the Acquired Fund’s Class X and Y shares prior to the Reorganization is included with Series I and II shares, respectively, of the Fund throughout this report.

  The Fund’s investment objective is to provide reasonable current income and long-term growth of income and capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.

Invesco V.I. Global Dividend Growth Fund

	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.

Invesco V.I. Global Dividend Growth Fund

E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

Invesco V.I. Global Dividend Growth Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $1 billion		0	.67%
Next $500 million		0	.645%
Next $1 billion		0	.62%
Next $1 billion		0	.595%
Next $1 billion		0	.57%
Over $4.5 billion		0	.545%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee to Morgan Stanley Investment Advisors Inc. (“MSIA”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s). Prior to the Reorganization, Morgan Stanley Investment Management Limited served as sub-adviser to the Acquired Fund.

  Effective on the Reorganization, the Adviser has contractually agreed, through at least June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 0.94% and Series II shares to 1.19% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds. Prior to the Reorganization, investment advisory fees paid by the Acquired Fund were reduced by an amount equal to the advisory and administrative service fees paid by the Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class shares.

  For the year ended December 31, 2010, the Adviser and MSIA waived advisory fees of $100,505 and $739, respectively.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $29,315 for accounting and fund administrative services and reimbursed $120,123 for services provided by insurance companies. Prior to the Reorganization, the Acquired Fund paid an administrative fee of $29,075 to Morgan Stanley Services Company, Inc.

  Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian, fund accountant and provides certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. Prior to the Reorganization, the Acquired Fund paid $2 to Morgan Stanley Trust, which served as the Acquired Fund’s transfer agent. For the year ended December 31, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. Prior to the Reorganization, the Acquired Fund paid distribution fees of $30,425 to Morgan Stanley Distributors Inc. based on the annual rate of 0.25% of the Acquired Fund’s average daily net assets of Class Y shares. For the year ended December 31, 2010, expenses incurred under the Plans are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs

Invesco V.I. Global Dividend Growth Fund

(Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1*		Level 2*		Level 3		Total
Australia	$	2,260,989	$	—	$	—	$	2,260,989
Bermuda		753,603		—		—		753,603
Brazil		1,168,303		262,573		—		1,430,876
Canada		1,968,674		—		—		1,968,674
China		379,593		514,344		—		893,937
Finland		758,004				—		758,004
France		—		3,863,783		—		3,863,783
Germany		2,307,955		—		—		2,307,955
Hong Kong		1,466,755		892,708		—		2,359,463
Indonesia		—		147,307		—		147,307
Ireland		182,814		—		—		182,814
Italy		864,677		—		—		864,677
Japan		9,615,375		2,165,680		—		11,781,055
Mexico		415,288		—		—		415,288
Netherlands		703,829		812,875		—		1,516,704
Norway		1,789,728		—		—		1,789,728
Poland		—		266,944		—		266,944
Russia		571,723				—		571,723
South Africa		1,137,309		—		—		1,137,309
South Korea		1,526,934		364,263		—		1,891,197
Spain		945,157		1,722,296		—		2,667,453
Switzerland		4,886,518		—		—		4,886,518
Taiwan		549,928		232,211		—		782,139
Thailand		312,201		—		—		312,201
Turkey		—		165,301		—		165,301
United Kingdom		1,464,678		5,881,822		—		7,346,500
United States		32,293,345		—		—		32,293,345
Total Investments	$	68,323,380	$	17,292,107	$	—	$	85,615,487

*  Transfers occurred between Level 1 and Level 2 due to foreign fair value adjustments.

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

Invesco V.I. Global Dividend Growth Fund

  During the year ended December 31, 2010, the Fund paid legal fees of $636 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	1,522,006	$	4,364,595

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	2,744,260
Net unrealized appreciation — investments		12,764,628
Net unrealized appreciation — other investments		1,333
Temporary book/tax differences		(4,695	)
Post-October deferrals		(4,761	)
Capital loss carryforward		(12,609,466	)
Shares of beneficial interest		82,667,230
Total net assets	$	85,558,529

  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 utilized $7,442,686 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2017	$	12,609,466

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $106,239,343 and $116,298,160, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	13,314,137
Aggregate unrealized (depreciation) of investment securities		(549,509	)
Net unrealized appreciation of investment securities	$	12,764,628
Cost of investments for tax purposes is $72,850,859.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, on December 31, 2010, undistributed net investment income was increased by $1,352,734 and undistributed net realized gain (loss) was decreased by $1,352,734. This reclassification had no effect on the net assets of the Fund.

Invesco V.I. Global Dividend Growth Fund

NOTE 9—Share Information

	Summary of Share Activity
	Years ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		51,886		$	437,630			39,028		$	300,376
Series II		30,122			252,482			120,372			854,130
Issued as reinvestment of dividends:
Series I		134,262			1,056,638			412,142			2,992,150
Series II		59,586			465,368			190,617			1,372,445
Reacquired:
Series I		(1,197,882	)		(10,182,678	)		(1,414,208	)		(10,681,016	)
Series II		(590,989	)		(4,995,255	)		(590,289	)		(4,421,876	)
Net increase (decrease) in share activity		(1,513,015	)	$	(12,965,815	)		(1,242,338	)	$	(9,583,791	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 94% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Global Dividend Growth Fund

NOTE 10—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																											Ratio of			Ratio of
																											expenses			expenses
					Net gains																						to average			to average net			Ratio of net
	Net asset				(losses) on						Dividends			Distributions													net assets			assets without			investment
	value,		Net		securities (both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			Distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	8.53	$	0.19	$	0.81		$	1.00		$	(0.16	)	$	—		$	(0.16	)	$	9.37		12.07	%	$	56,996		0.94	%(d)		1.06	%(d)		2.23	%(d)		130	%
Year ended 12/31/09		7.74		0.28		0.92			1.20			(0.41	)		—			(0.41	)		8.53		16.44			60,521		0.93	(e)		0.93	(e)		3.64	(e)		79
Year ended 12/31/08		16.87		0.00		(5.94	)		(5.94	)		(0.40	)		(2.79	)		(3.19	)		7.74		(40.94	)		62,333		0.86	(e)		0.86	(e)		3.04	(e)		88
Year ended 12/31/07		17.81		0.31		1.01			1.32			(0.36	)		(1.90	)		(2.26	)		16.87		7.02			136,495		0.82			0.82			1.72			38
Year ended 12/31/06		15.12		0.29		2.94			3.23			(0.33	)		(0.21	)		(0.54	)		17.81		21.94			165,864		0.83			0.83			1.80			24
Series II
Year ended 12/31/10		8.45		0.17		0.81			0.98			(0.14	)		—			(0.14	)		9.29		11.88			28,562		1.19	(d)		1.31	(d)		1.98	(d)		130
Year ended 12/31/09		7.66		0.26		0.91			1.17			(0.38	)		—			(0.38	)		8.45		16.11			30,239		1.18	(e)		1.18	(e)		3.39	(e)		79
Year ended 12/31/08		16.70		0.00		(5.90	)		(5.90	)		(0.35	)		(2.79	)		(3.14	)		7.66		(41.09	)		29,524		1.11	(e)		1.11	(e)		2.79	(e)		88
Year ended 12/31/07		17.66		0.26		1.00			1.26			(0.32	)		(1.90	)		(2.22	)		16.70		6.77			65,364		1.07			1.07			1.47			38
Year ended 12/31/06		15.00		0.25		2.91			3.16			(0.29	)		(0.21	)		(0.50	)		17.66		21.60			74,749		1.08			1.08			1.55			24

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s) of $56,095 and $28,289 for Series I and Series II shares, respectively
(e)	Ratios reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios was less than 0.005%.

NOTE 11—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco Van Kampen V.I. Global Value Equity Fund (the “Acquiring Fund”) in exchange for shares of the Acquiring Fund. The Agreement requires approval of the Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

NOTE 12—Change in Independent Registered Public Accounting Firm (unaudited)

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Invesco V.I. Global Dividend Growth Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Global Dividend Growth Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Global Dividend Growth Fund (formerly known as Global Dividend Growth Portfolio, one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. The statement of changes in net assets for the year ended December 31, 2009 and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 26, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Global Dividend Growth Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,234.50	$	5.29	$	1,020.47	$	4.79		0.94	%
Series II		1,000.00		1,233.70		6.70		1,019.21		6.06		1.19

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Global Dividend 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	32.60%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Global Dividend Growth Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. High Yield Securities Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

MS-VIHYI-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

As part of Invesco’s June 1, 2010, acquisition of Morgan Stanley’s retail asset management business, Morgan Stanley Variable Investment Series V.I. High Yield Portfolio was reorganized into Invesco V.I. High Yield Securities Fund.

     On June 25, 2010, Peter Ehret, head of High Yield and portfolio manager, and his investment team took over management of the Fund. A listing of your Fund’s managers appears later in this report.

     For the reporting period ended December 31, 2010, Invesco V.I. High Yield Securities Fund underperformed the Fund’s style-specific index, the Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index, due mainly to the Fund’s conservative posture during the 12-month period.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	10.22	%
Series II Shares	9.95
Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index▼
(Broad Market and Style-Specific Index)	14.94

^▼ Lipper Inc.

How we invest

We invest primarily in debt securities that are determined to be below investment grade quality. These bonds, commonly known as “junk bonds,” are typically corporate bonds of U.S.-based companies, many of which are moderately sized firms. We principally invest in junk bonds rated B or above, although we regularly own bonds of lesser quality as well. We may invest in convertible bonds, preferred stock, derivatives and bank loans, but do not expect these instruments to currently be a substantial part of our portfolio. We may invest up to 30% of total assets in foreign securities.

     The primary driver of our security selection is fundamental bottom-up credit analysis conducted by a team of analysts who specialize by industry. This approach is augmented with an on-going review of the relative value of securities

and a top-down process that includes sector, economic and quantitative analysis. Changes in a security’s risk/ return profile or relative value and top-down factors generally determine buy and sell decisions.

     Portfolio construction begins with a well-defined Fund design that emphasizes diversification and establishes the target investment vehicles for generating the desired “alpha” (the return expected from an investment) as well as the risk parameters appropriate for the current positioning in the credit cycle. Investments are evaluated for liquidity and risk versus relative value. Working closely with other investment specialists and traders, we determine the timing and amount of each “alpha” decision to use in the portfolio at any time, taking into account security selection skill and market opportunities.

     Sell decisions are based on:

n	Low equity value to debt, high subordination and negative free cash flow coupled with negative news, declining expectations, or an increasing risk profile.
n	Very low yields.
n	Presentation of a better relative value opportunity.

Market conditions and your Fund

In the U.S. and most of the developed world, a gradual and somewhat lackluster recovery continued, with central banks keeping interest rates at low levels and with few of them withdrawing their quantitative easing measures. This helped private sector companies improve their balance sheets and earnings following the global financial crisis that began to dissipate in early 2009. However, investor skepticism of global governments’ abilities to retire huge amounts of debt without affecting economic growth rates caused sovereign debt distress (especially for eurozone countries) and became a focal point of investor concern.

     In the U.S., economic recovery was present, although the pace of recovery remained modest as stubbornly high unemployment and export weakness continued to weigh on the economy. Real gross domestic product (GDP), the broadest measure of overall U.S. economic activity, increased at an annual rate of 3.7%, 1.7% and 2.6% for the first, second and third quarters of 2010, respectively.¹ The U.S. Federal Reserve (the Fed) maintained a very accommodative monetary policy throughout the period, with the federal funds target rate unchanged in its range of zero to 0.25%.² The Fed recently described its view of the U.S. economy by stating:

Portfolio Composition†

By credit quality

A	0.7	%
BBB	3.0
BB	35.4
B	44.5
CCC	10.9
Non-Rated	3.5
Cash	2.0

Top 10 Fixed Income Issuers*

1.	CIT Group Inc.	1.9	%
2.	Sprint Capital Corp.	1.7
3.	MGM Resorts International	1.7
4.	International Lease Finance Corp.	1.5
5.	Nielsen Finance LLC/Co.	1.4
6.	Intelsat Jackson Holdings S.A.	1.4
7.	Freescale Semiconductor Inc.	1.4
8.	Vangent Inc.	1.3
9.	Ply Gem Industries Inc.	1.2
10.	Continental Airlines Inc.	1.2

Total Net Assets	$32.2 million
Total Number of Holdings*		287

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.

† Source: Standard and Poor’s. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations, including specific securities, money market instruments or other debts. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest); ratings are subject to change without notice. “Non-Rated” indicates the debtor was not rated, and should not be interpreted as indicating low quality. For more information on Standard and Poor’s rating methodology, please visit www.standardandpoors.com and select ‘Understanding Ratings’ under Rating Resources on the homepage.

Invesco V.I. High Yield Securities Fund

“The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated.”² Consequently, it was widely expected that the Fed would continue to keep interest rates low for an extended period.

     Defaults in the high yield bond market reached extreme lows in 2010 and were below those recorded during the previous year.

     The broad U.S. high yield bond market, as measured by the Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index, generated strong positive total return for the 12 months ended December 31, 2010. Slow but steady economic growth, the avoidance of a double-dip recession, a recovery in corporate financial health, strong inflows into the high yield asset class, low overall interest rates and a decline in defaults boosted the performance of high yield bonds. In May and November of 2010, debt concerns in Europe caused investors to scale back their risk profile and embrace the safe haven of U.S. government-related securities. Late in the year, U.S. Treasury yields began to rise. Nonetheless, the impact was insufficient to erase gains realized by non-government bonds over the reporting period.

     On an absolute basis, the Fund generated positive returns for the 12-month period. The prior managers of the Fund maintained a defensive posture and were underweight in lower quality CCC-rated issues for the first half of the reporting period. This was the main detractor from performance as lower credit quality issues experienced the most significant positive returns in the high yield market.³ The previous managers de-emphasized highly cyclical (or economically sensitive) industries and focused on more stable industry groups that have performed relatively well throughout an economic cycle. The Fund’s overweight positions in the oil field services industry and the telecommunication wirelines industry detracted from its performance as these asset classes underperformed for the first half of the reporting period. The Fund’s underweight in the financials sector, particularly in the banking and finance company industries, also was a significant detractor as these assets outperformed for the period.

     Since taking over management of the Fund on June 25, 2010, we have worked on aligning the Fund to the Invesco research team’s outlook. We have

gradually built up our investment weights in financial companies, particularly in banking and insurance companies; however, we remained cautious about the lower quality bonds. The largest detractors for the second half of the reporting period were the non-captive diversified, media non-cable and home construction industries. The Fund benefited from its overweight position in the financials sector, an underweight position in the electric industry, which underperformed during the period, and exposure to the automotive and wireless industries.

     We remain generally positive in our assessment of high yield securities; however, macroeconomic risks, slow economic growth and the potential for a double-dip recession and current valuations make us cautious about owning riskier assets. We believe the risk of holding those highest-risk securities outweighs potential benefits for the Fund at this time.

     Thank you for investing in Invesco V.I. High Yield Securities Fund and for sharing our long-term investment horizon.

1 Bureau of Economic Analysis
2 U.S. Federal Reserve
3 Barclays Capital

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Peter Ehret
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. High Yield Securities Fund. Mr. Ehret joined Invesco in 2001. He graduated cum laude with a B.S. in economics from the University of Minnesota. He also earned an M.S. in real estate appraisal and investment analysis from the University of Wisconsin-Madison.

Darren Hughes
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. High Yield Securities Fund. He joined Invesco in 1992. Mr. Hughes earned a B.B.A. in finance and economics from Baylor University.

Scott Roberts
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. High Yield Securities Fund. He joined Invesco in 2000. Mr. Roberts earned a B.B.A. in finance from the University of Houston.

Invesco V.I. High Yield Securities Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class

Fund and index data from 12/31/00

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (3/9/84)			4.15	%
	10	Years	2.09
	5	Years	6.88
	1	Year	10.22
Series II Shares
Inception (6/5/00)			-1.62	%
	10	Years	1.86	%
	5	Years	6.65
	1	Year	9.95

Effective June 1, 2010, Class X and Class Y shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Series I and Series II shares, respectively, of Invesco V.I. High Yield Securities Fund. Returns shown above for Series I and Series II shares are blended returns of the predecessor fund and Invesco V.I. High Yield Securities Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 2.66% and 2.91%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. High Yield Securities Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

Invesco V.I. High Yield Securities Fund

Invesco V.I. High Yield Securities Fund’s investment objective is to provide a high level of current income by investing in a diversified portfolio consisting principally of fixed-income securities, which may include both non-convertible and convertible debt securities and preferred stocks. As a secondary objective the Fund will seek capital appreciation, but only when consistent with its primary objective.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

All fixed income securities are subject to two types of risk: credit risk and interest rate risk. When the general level of interest rates goes up, the prices of most fixed income securities go down. When the general level of interest rates goes down, the prices of most fixed income securities go up.

     Lower rated securities may be more susceptible to real or perceived adverse economic and competitive industry conditions.

     The risks of investing in securities of foreign issuers can include fluctuations in foreign currencies, foreign currency exchange controls, political and economic instability, differences in financial reporting, differences in securities regulation and trading, and foreign taxation issues.

     Certain public bank loans are illiquid, meaning the fund may not be able to sell them quickly at a fair price. Illiquid securities are also difficult to value. Bank loans are subject to the risk of default in the payment of interest or principal on a loan, which will result in a reduction of income to the fund, and a potential decrease in the fund’s net asset value. Public bank loans present a greater degree of investment risk due to the fact that the cash flow or other property of the borrower securing the bank loan may be insufficient to meet scheduled payments.

About indexes used in this report

The Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index is an unmanaged index that covers U.S. corporate, fixed-rate, non-investment grade debt with at least one year to maturity and at least $150 million in par outstanding. Index weights for each issuer are capped at 2%.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. High Yield Securities Fund

Schedule of Investments^(a)

December 31, 2010

	Principal
	Amount		Value
U.S. Dollar Denominated Bonds & Notes–86.92%
Advertising–0.23%
Lamar Media Corp., Sr. Gtd. Sub. Global Notes, 7.88%, 04/15/18	$	70,000	$	74,463
Aerospace & Defense–1.34%
Alliant Techsystems Inc., Sr. Unsec. Gtd. Sub. Notes, 6.88%, 09/15/20		15,000		15,487
BE Aerospace, Inc., Sr. Unsec. Notes, 6.88%, 10/01/20		85,000		87,975
Hexcel Corp., Sr. Unsec. Sub. Global Notes, 6.75%, 02/01/15		145,000		148,625
Triumph Group, Inc., Sr. Unsec. Gtd. Sub. Global Notes, 8.00%, 11/15/17		170,000		179,775
				431,862
Airlines–1.75%
American Airlines,–Series 1991-A2, Sec. Pass Through Ctfs., 10.18%, 01/02/13		34,838		35,317
Continental Airlines Inc., Series 2007-1, Class C, Sec. Sub. Global Pass
Through Ctfs., 7.34%, 04/19/14		242,972		245,402
Series 2009-1, Class B, Sec. Global Pass
Through Ctfs., 9.25%, 05/10/17		128,231		139,131
UAL Corp., Series 2007-1A, Sec. Gtd. Global Pass Through
Ctfs., 6.64%, 07/02/22		39,098		39,856
Series 2009-2B, Sec. Gtd. Pass Through
Ctfs., 12.00%, 01/15/16(b)		92,107		103,620
				563,326
Aluminum–0.28%
Century Aluminum Co., Sr. Sec. Notes, 8.00%, 05/15/14		85,000		89,941
Apparel, Accessories & Luxury Goods–2.14%
Hanesbrands Inc., Sr. Unsec. Gtd. Notes, 6.38%, 12/15/20(b)		80,000		77,200
Levi Strauss & Co., Sr. Unsec. Global Notes, 7.63%, 05/15/20		165,000		171,187
Oxford Industries Inc., Sr. Sec. Gtd. Global Notes, 11.38%, 07/15/15		150,000		169,125
Phillips-Van Heusen Corp., Sr. Unsec. Notes, 7.38%, 05/15/20		55,000		58,438
Quiksilver Inc., Sr. Unsec. Gtd. Global Notes, 6.88%, 04/15/15		200,000		196,500
Visant Corp., Sr. Notes, 10.00%, 10/01/17(b)		15,000		15,975
				688,425
Asset Management & Custody Banks–0.04%
Accellent Inc., Sr. Gtd. Sub. Notes, 10.00%, 11/01/17(b)		15,000		14,175
Auto Parts & Equipment–0.21%
Tenneco Inc., Sr. Gtd. Notes, 6.88%, 12/15/20(b)		25,000		25,500
Sr. Notes, 7.75%, 08/15/18(b)		40,000		42,600
				68,100
Automobile Manufacturers–0.69%
Ford Motor Co., Sr. Unsec. Global Notes, 7.45%, 07/16/31		115,000		124,200
Motors Liquidation Co., Sr. Unsec. Notes, 8.38%, 07/15/33(c)		265,000		96,394
				220,594
Broadcasting–2.19%
Allbritton Communications Co., Sr. Unsec. Global Notes, 8.00%, 05/15/18		90,000		91,350
Nielsen Finance LLC/Co., Sr. Unsec. Gtd. Notes, 7.75%, 10/15/18(b)		355,000		369,200
Sr. Unsec. Gtd. Sub. Disc. Global Notes, 12.50%, 08/01/16(d)		80,000		84,400
XM Satellite Radio Inc., Sr. Unsec. Gtd. Notes, 13.00%, 08/01/13(b)		135,000		161,325
				706,275
Building Products–4.16%
Associated Materials LLC, Sr. Sec. Gtd. Notes, 9.13%, 11/01/17(b)		120,000		126,600
Building Materials Corp. of America, Sr. Gtd. Notes, 7.50%, 03/15/20(b)		160,000		164,400
Gibraltar Industries Inc., Series B, Sr. Unsec. Gtd. Sub. Global Notes, 8.00%, 12/01/15		105,000		106,444
Nortek Inc., Sr. Sec. Gtd. Global Notes, 11.00%, 12/01/13		220,000		235,400
Sr. Unsec. Gtd. Notes, 10.00%, 12/01/18(b)		75,000		78,563
Ply Gem Industries Inc.,
Sr. Sec. Gtd. First & Second Lien Global Notes, 11.75%, 06/15/13		315,000		337,837
Sr. Unsec. Gtd. Sub. Global Notes, 13.13%, 07/15/14		55,000		58,575
Roofing Supply Group LLC/Roofing Supply Finance Inc., Sr. Sec. Notes, 8.63%, 12/01/17(b)		190,000		198,075
USG Corp., Sr. Gtd. Notes, 8.38%, 10/15/18(b)		10,000		9,850
Sr. Unsec. Gtd. Notes, 9.75%, 08/01/14(b)		20,000		21,250
				1,336,994

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Securities Fund

	Principal
	Amount		Value
Cable & Satellite–1.05%
CSC Holdings LLC, Sr. Unsec. Global Notes, 8.63%, 02/15/19	$	140,000	$	160,300
Hughes Network Systems LLC/HNS Finance Corp., Sr. Unsec. Gtd. Global Notes, 9.50%, 04/15/14		45,000		46,631
9.50%, 04/15/14		125,000		129,531
				336,462
Casinos & Gaming–5.68%
Boyd Gaming Corp., Sr. Notes, 9.13%, 12/01/18(b)		15,000		15,000
Caesars Entertainment Operating Co. Inc.,
Sr. Sec. Gtd. Global Notes, 10.00%, 12/15/18		30,000		27,450
11.25%, 06/01/17		135,000		152,550
Sr. Sec. Notes, 12.75%, 04/15/18(b)		85,000		87,550
Sr. Unsec. Gtd. Global Bonds, 5.63%, 06/01/15		115,000		95,737
Great Canadian Gaming Corp. (Canada), Sr. Unsec. Gtd. Sub. Notes, 7.25%, 02/15/15(b)		20,000		20,600
Las Vegas Sands Corp., Sr. Sec. Gtd. Global Notes, 6.38%, 02/15/15		100,000		102,250
Mandalay Resort Group, Sr. Unsec. Gtd. Sub. Notes, 7.63%, 07/15/13		100,000		95,000
MGM Resorts International,
Sr. Sec. Gtd. Notes, 13.00%, 11/15/13		90,000		106,650
Sr. Unsec. Gtd. Global Notes, 6.75%, 04/01/13		455,000		448,175
Pinnacle Entertainment Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 08/01/17		90,000		98,325
Resort at Summerlin L.P., Series B, Sr. Unsec. Sub. Notes, 13.00%, 12/15/07(c)		7,210,050		0
Scientific Games Corp., Sr. Sub. Notes, 8.13%, 09/15/18(b)		15,000		15,188
Scientific Games International Inc., Sr. Unsec. Gtd. Sub. Global Notes, 9.25%, 06/15/19		125,000		129,687
Seneca Gaming Corp., Sr. Unsec. Gtd. Notes, 8.25%, 12/01/18(b)		35,000		35,175
Snoqualmie Entertainment Authority,
Sr. Sec. Floating Rate Notes, 4.43%, 02/01/14(b)(e)		55,000		47,850
Sr. Sec. Notes, 9.13%, 02/01/15(b)		115,000		106,950
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp.,
Sec. Gtd. First Mortgage Global Notes, 7.75%, 08/15/20		50,000		54,500
Sr. Sec. Gtd. First Mortgage Global Notes, 7.88%, 05/01/20		175,000		189,219
				1,827,856
Coal & Consumable Fuels–0.12%
CONSOL Energy Inc., Sr. Unsec. Gtd. Notes, 8.25%, 04/01/20(b)		35,000		37,975
Computer & Electronics Retail–0.06%
Rent-A-Center Inc., Sr. Unsec. Notes, 6.63%, 11/15/20(b)		20,000		20,050
Computer Storage & Peripherals–0.29%
Seagate HDD Cayman (Cayman Islands), Sr. Unsec. Gtd. Notes, 7.75%, 12/15/18(b)		90,000		91,913
Construction & Engineering–1.38%
American Residential Services LLC, Sr. Sec. Notes, 12.00%, 04/15/15(b)		35,000		36,837
Dycom Investments Inc., Sr. Unsec. Gtd. Sub. Global Notes, 8.13%, 10/15/15		40,000		40,900
MasTec, Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 02/01/17		110,000		111,925
Tutor Perini Corp., Sr. Unsec. Gtd. Notes, 7.63%, 11/01/18(b)		250,000		253,125
				442,787
Construction Materials–1.07%
Cemex Finance LLC, Sr. Sec. Gtd. Bonds, 9.50%, 12/14/16(b)		100,000		103,551
Texas Industries Inc., Sr. Unsec. Gtd. Notes, 9.25%, 08/15/20(b)		225,000		240,187
				343,738
Construction, Farm Machinery & Heavy Trucks–1.89%
Case New Holland Inc., Sr. Notes, 7.88%, 12/01/17(b)		75,000		82,875
Sr. Unsec. Gtd. Global Notes, 7.75%, 09/01/13		135,000		145,800
Manitowoc Co. Inc. (The), Sr. Unsec. Gtd. Notes, 8.50%, 11/01/20		50,000		53,562
Navistar International Corp., Sr. Unsec. Gtd. Notes, 8.25%, 11/01/21		180,000		194,850
Oshkosh Corp., Sr. Unsec. Gtd. Global Notes, 8.50%, 03/01/20		80,000		88,200
Titan International Inc., Sr. Sec. Gtd. Notes, 7.88%, 10/01/17(b)		40,000		42,500
				607,787
Consumer Finance–2.77%
Ally Financial Inc.,
Sr. Unsec. Gtd. Global Notes, 8.00%, 03/15/20		195,000		214,500
8.00%, 11/01/31		15,000		16,050
Sr. Unsec. Gtd. Notes, 7.50%, 09/15/20(b)		140,000		149,100
Capital One Capital VI, Jr. Ltd. Gtd. Sub., 8.88%, 05/15/40		115,000		120,031

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Securities Fund

	Principal
	Amount		Value
Consumer Finance–(continued)
Ford Motor Credit Co. LLC, Sr. Unsec. Notes, 8.00%, 12/15/16	$	95,000	$	106,400
8.13%, 01/15/20		150,000		174,750
National Money Mart Co. (Canada), Sr. Unsec. Gtd. Global Notes, 10.38%, 12/15/16		100,000		109,000
				889,831
Data Processing & Outsourced Services–0.58%
SunGard Data Systems Inc., Sr. Unsec. Gtd. Global Notes, 10.63%, 05/15/15		65,000		72,475
Sr. Unsec. Gtd. Sub. Global Notes, 10.25%, 08/15/15		60,000		63,150
Sr. Unsec. Notes, 7.38%, 11/15/18(b)		25,000		25,250
7.63%, 11/15/20(b)		25,000		25,437
				186,312
Department Stores–0.46%
Sears Holdings Corp., Sr. Unsec. Notes, 6.63%, 10/15/18(b)		155,000		146,475
Distillers & Vintners–0.58%
Constellation Brands Inc., Sr. Unsec. Gtd. Global Notes, 7.25%, 05/15/17		175,000		185,500
Diversified Support Services–0.05%
Mobile Mini, Inc., Sr. Unsec. Gtd. Notes, 7.88%, 12/01/20(b)		15,000		15,638
Drug Retail–0.26%
General Nutrition Centers Inc., Sr. Unsec. Gtd. PIK Floating Rate Global Notes, 5.75%, 03/15/14(e)		85,000		84,150
Electrical Components & Equipment–0.08%
Polypore International Inc., Sr. Unsec. Gtd. Notes, 7.50%, 11/15/17(b)		25,000		25,750
Environmental & Facilities Services–0.12%
EnergySolutions Inc./LLC, Sr. Unsec. Gtd. Notes, 10.75%, 08/15/18(b)		35,000		38,413
Fertilizers & Agricultural Chemicals–0.72%
CF Industries Inc., Sr. Unsec. Gtd. Notes, 7.13%, 05/01/20		210,000		230,475
Food Retail–0.27%
Simmons Foods Inc., Sr. Sec. Notes, 10.50%, 11/01/17(b)		80,000		85,800
Forest Products–0.03%
Sino-Forest Corp. (Canada), Gtd. Notes, 6.25%, 10/21/17(b)		10,000		10,041
Gas Utilities–0.52%
Ferrellgas L.P./Ferrellgas Finance Corp., Sr. Unsec. Notes, 6.50%, 05/01/21(b)		90,000		87,975
Suburban Propane Partners, L.P./Suburban Energy Finance Corp., Sr. Unsec. Notes, 7.38%, 03/15/20		75,000		80,437
				168,412
Health Care Equipment–0.34%
DJO Finance LLC/Corp., Sr. Unsec. Gtd. Global Notes, 10.88%, 11/15/14		100,000		109,500
Health Care Facilities–2.97%
Community Health Systems Inc., Sr. Unsec. Gtd. Global Notes, 8.88%, 07/15/15		175,000		184,625
Hanger Orthopedic Group Inc., Sr. Unsec. Gtd. Global Notes, 7.13%, 11/15/18		25,000		25,062
HCA, Inc., Sr. Sec. Gtd. Global Notes, 7.88%, 02/15/20		105,000		112,875
Sr. Unsec. Notes, 5.75%, 03/15/14		255,000		252,450
Health Management Associates Inc., Sr. Sec. Notes, 6.13%, 04/15/16		30,000		30,375
Healthsouth Corp., Sr. Unsec. Gtd. Notes, 7.25%, 10/01/18		50,000		51,125
7.75%, 09/15/22		25,000		25,875
Select Medical Holdings Corp., Sr. Unsec. Floating Rate Global Notes, 6.24%, 09/15/15(e)		60,000		55,800
Tenet Healthcare Corp., Sr. Sec. Gtd. Global Notes, 10.00%, 05/01/18		135,000		158,625
Sr. Unsec. Global Notes, 9.25%, 02/01/15		55,000		58,850
				955,662
Health Care Services–0.77%
Apria Healthcare Group Inc., Sr. Sec. Gtd. Global Notes, 12.38%, 11/01/14		95,000		105,331
DaVita Inc., Sr. Unsec. Gtd. Notes, 6.38%, 11/01/18		25,000		24,938
Fresenius US Finance II Inc., Sr. Unsec. Gtd. Notes, 9.00%, 07/15/15(b)		80,000		92,000
Universal Hospital Services Inc., Sr. Sec. PIK Global Notes, 8.50%, 06/01/15		25,000		25,812
				248,081
Health Care Technology–0.39%
MedAssets Inc., Sr. Notes, 8.00%, 11/15/18(b)		125,000		126,250
Homebuilding–0.78%
K Hovnanian Enterprises Inc., Sr. Sec. Gtd. Global Notes, 10.63%, 10/15/16		175,000		181,125
M/I Homes Inc., Sr. Unsec. Notes, 8.63%, 11/15/18(b)		35,000		35,262
Standard Pacific Corp., Sr. Unsec. Gtd. Notes, 8.38%, 05/15/18(b)		35,000		35,175
				251,562

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Securities Fund

	Principal
	Amount		Value
Hotels, Resorts & Cruise Lines–0.25%
Royal Caribbean Cruises Ltd., Sr. Unsec. Global Notes, 6.88%, 12/01/13	$	75,000	$	80,250
Household Products–0.22%
Central Garden and Pet Co., Sr. Gtd. Sub. Notes, 8.25%, 03/01/18		70,000		71,925
Housewares & Specialties–0.03%
Jarden Corp., Sr. Unsec. Gtd. Notes, 6.13%, 11/15/22		10,000		9,588
Independent Power Producers & Energy Traders–1.65%
AES Corp. (The), Sr. Unsec. Notes, 7.75%, 03/01/14		270,000		289,575
NRG Energy, Inc.,
Sr. Unsec. Gtd. Notes, 7.38%, 02/01/16		155,000		158,875
7.38%, 01/15/17		50,000		51,250
Sr. Unsec. Notes, 8.50%, 06/15/19		30,000		31,050
				530,750
Industrial Conglomerates–0.79%
RBS Global Inc./ Rexnord LLC, Sr. Unsec. Gtd. Global Notes, 8.50%, 05/01/18		240,000		255,000
Industrial Gases–0.15%
Airgas Inc., Sr. Unsec. Gtd. Sub. Global Notes, 7.13%, 10/01/18		45,000		49,838
Industrial Machinery–0.23%
Mueller Water Products Inc., Sr. Unsec. Gtd. Global Notes, 8.75%, 09/01/20		15,000		16,725
SPX Corp., Sr. Unsec. Gtd. Notes, 6.88%, 09/01/17(b)		55,000		58,713
				75,438
Integrated Telecommunication Services–1.39%
Intelsat Jackson Holdings S.A. (Luxembourg), Sr. Unsec. Gtd. Global Notes, 9.50%, 06/15/16		30,000		31,800
Sr. Unsec. Notes, 7.25%, 10/15/20(b)		410,000		416,150
				447,950
Internet Retail–0.85%
Travelport LLC, Sr. Unsec. Gtd. Global Notes, 9.88%, 09/01/14		18,000		17,640
Sr. Unsec. Gtd. Sub. Global Notes, 11.88%, 09/01/16		140,000		138,250
Travelport LLC/Inc., Sr. Unsec. Gtd. Global Notes, 9.00%, 03/01/16		120,000		116,700
				272,590
Investment Banking & Brokerage–0.69%
Cantor Fitzgerald L.P., Bonds, 7.88%, 10/15/19(b)		105,000		106,153
E*Trade Financial Corp., Sr. Unsec. Notes, 7.88%, 12/01/15		115,000		114,713
				220,866
Leisure Facilities–0.52%
Universal City Development Partners Ltd./UCDP Finance Inc., Sr. Unsec. Gtd. Global Notes, 8.88%, 11/15/15		155,000		165,850
Leisure Products–0.05%
Toys R Us Delaware Inc., Sr. Sec. Gtd. Notes, 7.38%, 09/01/16(b)		15,000		15,638
Life Sciences Tools & Services–0.20%
Patheon Inc. (Canada), Sr. Sec. Notes, 8.63%, 04/15/17(b)		65,000		65,163
Marine–0.12%
Stena A.B. (Sweden), Sr. Unsec. Global Notes, 7.00%, 12/01/16		40,000		40,050
Metal & Glass Containers–0.50%
Ball Corp., Sr. Unsec. Gtd. Notes, 5.75%, 05/15/21		40,000		39,000
Owens-Brockway Glass Container Inc., Sr. Unsec. Gtd. Global Notes, 7.38%, 05/15/16		115,000		123,050
				162,050
Movies & Entertainment–1.52%
AMC Entertainment Holdings Inc., Sr. Sub. Notes, 9.75%, 12/01/20(b)		40,000		41,650
Sr. Unsec. Gtd. Global Notes, 8.75%, 06/01/19		195,000		208,650
Cinemark USA Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 06/15/19		60,000		65,250
NAI Entertainment Holdings LLC, Sr. Sec. Notes, 8.25%, 12/15/17(b)		165,000		174,075
				489,625
Multi-Line Insurance–2.24%
American International Group, Inc.,
Jr. Sub. Variable Rate Global Deb., 8.18%, 05/15/58(e)		170,000		180,625
Sr. Unsec. Global Notes, 6.40%, 12/15/20		30,000		31,313
Hartford Financial Services Group Inc. (The), Jr.
Unsec. Sub. Variable Rate Deb., 8.13%, 06/15/38(e)		80,000		85,848
Liberty Mutual Group Inc., Jr. Unsec. Gtd. Sub. Bonds, 7.80%, 03/15/37(b)		230,000		228,275
Nationwide Mutual Insurance Co., Sub. Notes, 9.38%, 08/15/39(b)		165,000		193,180
				719,241

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Securities Fund

	Principal
	Amount		Value
Multi-Sector Holdings–0.32%
Reynolds Group Issuer Inc./LLC, Sr. Sec. Gtd. Notes, 7.13%, 04/15/19(b)	$	100,000	$	103,250
Office Services & Supplies–0.17%
IKON Office Solutions, Inc., Sr. Unsec. Notes, 6.75%, 12/01/25		35,000		33,775
Interface Inc., Sr. Notes, 7.63%, 12/01/18(b)		20,000		20,700
				54,475
Oil & Gas Drilling–0.25%
Precision Drilling Corp. (Canada), Sr. Unsec. Gtd. Notes, 6.63%, 11/15/20(b)		55,000		56,238
Trinidad Drilling Ltd. (Canada), Sr. Unsec. Notes, 7.88%, 01/15/19(b)		25,000		25,763
				82,001
Oil & Gas Equipment & Services–1.07%
Bristow Group, Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 09/15/17		60,000		63,000
Calfrac Holdings L.P., Sr. Unsec. Notes, 7.50%, 12/01/20(b)		30,000		30,206
Cie Generale de Geophysique-Veritas (France), Sr. Unsec. Gtd. Global Notes, 7.50%, 05/15/15		35,000		35,919
Complete Production Services, Inc., Sr. Unsec. Gtd. Global Notes, 8.00%, 12/15/16		65,000		67,600
Key Energy Services Inc., Sr. Unsec. Gtd. Global Notes, 8.38%, 12/01/14		140,000		148,400
				345,125
Oil & Gas Exploration & Production–8.05%
Berry Petroleum Co., Sr. Unsec. Notes, 6.75%, 11/01/20		35,000		35,350
Chaparral Energy Inc.,
Sr. Unsec. Gtd. Global Notes, 8.50%, 12/01/15		50,000		51,125
8.88%, 02/01/17		140,000		143,150
Chesapeake Energy Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 11/15/20		30,000		30,413
Sr. Unsec. Gtd. Notes, 6.63%, 08/15/20		90,000		88,538
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 7.13%, 05/01/17		220,000		229,075
Concho Resources Inc., Sr. Notes, 7.00%, 01/15/21		25,000		25,750
Continental Resources Inc.,
Sr. Unsec. Gtd. Global Notes, 7.38%, 10/01/20		70,000		74,025
8.25%, 10/01/19		50,000		54,875
Sr. Unsec. Gtd. Notes, 7.13%, 04/01/21(b)		30,000		31,650
Delta Petroleum Corp., Sr. Unsec. Gtd. Global Notes, 7.00%, 04/01/15		95,000		63,175
Encore Acquisition Co., Sr. Gtd. Sub. Notes, 9.50%, 05/01/16		90,000		100,238
EXCO Resources Inc., Sr. Unsec. Gtd. Notes, 7.50%, 09/15/18		130,000		127,400
Forest Oil Corp., Sr. Unsec. Gtd. Global Notes, 7.25%, 06/15/19		265,000		269,637
Harvest Operations Corp., Sr. Unsec. Gtd. Notes, 6.88%, 10/01/17(b)		80,000		82,600
McMoRan Exploration Co., Sr. Unsec. Gtd. Notes, 11.88%, 11/15/14		230,000		255,012
Newfield Exploration Co., Sr. Unsec. Gtd. Global Notes, 7.13%, 05/15/18		60,000		63,450
Petrohawk Energy Corp.
Sr. Unsec. Gtd. Global Notes, 7.25%, 08/15/18		65,000		65,894
7.88%, 06/01/15		175,000		182,656
Pioneer Natural Resources Co., Sr. Sec. Notes, 6.65%, 03/15/17		215,000		229,585
Plains Exploration & Production Co., Sr. Unsec. Gtd. Notes, 7.63%, 06/01/18		225,000		237,937
Range Resources Corp., Sr. Unsec. Notes, 7.50%, 05/15/16		90,000		93,600
Whiting Petroleum Corp., Sr. Unsec. Gtd. Sub. Notes, 6.50%, 10/01/18		55,000		55,825
				2,590,960
Oil & Gas Refining & Marketing–1.07%
Tesoro Corp., Sr. Unsec. Gtd. Global Bonds, 6.50%, 06/01/17		170,000		171,063
United Refining Co., Series 2, Sr. Unsec. Gtd. Global Notes, 10.50%, 08/15/12		175,000		172,156
				343,219
Oil & Gas Storage & Transportation–2.52%
Copano Energy LLC/Copano Energy Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.13%, 03/01/16		175,000		182,000
Genesis Energy L.P./Genesis Energy Finance Corp., Sr. Unsec. Gtd. Notes, 7.88%, 12/15/18(b)		40,000		39,800
Inergy L.P./Inergy Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.25%, 03/01/16		190,000		199,025
MarkWest Energy Partners L.P./MarkWest Energy Finance Corp., Sr. Unsec. Gtd. Notes, 6.75%, 11/01/20		35,000		34,956
Series B, Sr. Unsec. Gtd. Global Notes, 8.75%, 04/15/18		210,000		228,112
Overseas Shipholding Group, Inc., Sr. Unsec. Notes, 8.13%, 03/30/18		50,000		50,375
Regency Energy Partners L.P./Regency Energy Finance Corp., Sr. Unsec. Gtd. Notes, 6.88%, 12/01/18		75,000		76,313
				810,581

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Securities Fund

	Principal
	Amount		Value
Other Diversified Financial Services–1.47%
International Lease Finance Corp.,
Sr. Sec. Notes, 6.75%, 09/01/16(b)	$	65,000	$	68,697
7.13%, 09/01/18(b)		65,000		69,387
Sr. Unsec. Notes, 8.25%, 12/15/20		45,000		46,688
8.63%, 09/15/15(b)		235,000		253,212
8.75%, 03/15/17(b)		34,000		36,635
				474,619
Packaged Foods & Meats–0.72%
Chiquita Brands International, Inc., Sr. Unsec. Global Notes, 8.88%, 12/01/15		65,000		66,544
JBS USA LLC/JBS USA Finance Inc., Sr. Unsec. Gtd. Global Notes, 11.63%, 05/01/14		140,000		164,150
				230,694
Paper Packaging–0.46%
Cascades Inc. (Canada), Sr. Unsec. Gtd. Global Notes, 7.88%, 01/15/20		145,000		149,350
Paper Products–0.97%
Clearwater Paper Corp., Sr. Gtd. Notes, 7.13%, 11/01/18(b)		35,000		36,312
Mercer International Inc., Sr. Unsec. Notes, 9.50%, 12/01/17(b)		50,000		51,750
Neenah Paper, Inc., Sr. Unsec. Gtd. Global Notes, 7.38%, 11/15/14		65,000		66,300
P.H. Glatfelter Co., Sr. Unsec. Gtd. Global Notes, 7.13%, 05/01/16		110,000		113,889
Sappi Papier Holding AG, Unsec. Gtd. Unsub. Notes, 6.75%, 06/15/12(b)		45,000		45,049
				313,300
Personal Products–0.18%
NBTY Inc., Sr. Gtd. Notes, 9.00%, 10/01/18(b)		35,000		37,363
Sabra Health Care L.P./Sabra Capital Corp., Sr. Gtd. Notes, 8.13%, 11/01/18(b)		20,000		20,725
				58,088
Pharmaceuticals–0.93%
Axcan Intermediate Holdings Inc., Sr. Unsec. Global Notes, 12.75%, 03/01/16		110,000		113,575
Elan Finance PLC/Elan Finance Corp., Sr. Gtd. Notes, 8.75%, 10/15/16(b)		100,000		101,750
Endo Pharmaceuticals Holdings Inc., Sr. Unsec. Gtd. Notes, 7.00%, 12/15/20(b)		15,000		15,375
Mylan Inc., Sr. Gtd. Notes, 6.00%, 11/15/18(b)		50,000		49,375
Valeant Pharmaceuticals International (Canada), Sr. Unsec. Gtd. Notes, 6.75%, 10/01/17(b)		10,000		9,975
7.00%, 10/01/20(b)		10,000		9,900
				299,950
Property & Casualty Insurance–0.64%
Crum & Forster Holdings Corp., Sr. Unsec. Global Notes, 7.75%, 05/01/17		125,000		131,250
XL Group PLC (Ireland), Series E, Jr. Sub. Variable Rate Global Bonds, 6.50%(e)(f)		85,000		73,525
				204,775
Publishing–0.80%
Gannett Co. Inc., Sr. Unsec. Gtd. Global Notes, 8.75%, 11/15/14		10,000		11,225
9.38%, 11/15/17		220,000		245,300
				256,525
Railroads–0.37%
Kansas City Southern de Mexico S.A. de C.V. (Mexico), Sr. Unsec. Global Notes, 8.00%, 02/01/18		110,000		118,689
Real Estate Services–0.25%
CB Richard Ellis Services Inc., Sr. Unsec. Gtd. Notes, 6.63%, 10/15/20(b)		80,000		80,300
Regional Banks–1.06%
Regions Financial Corp., Unsec. Sub. Notes, 7.38%, 12/10/37		150,000		141,000
Zions Bancorp., Unsec. Sub. Notes, 5.50%, 11/16/15		205,000		199,875
				340,875
Research & Consulting Services–0.16%
FTI Consulting Inc., Sr. Gtd. Notes, 6.75%, 10/01/20(b)		50,000		49,875
Restaurants–0.05%
Dunkin Finance Corp., Sr. Notes, 9.63%, 12/01/18(b)		15,000		15,300
Semiconductor Equipment–0.49%
Amkor Technology Inc., Sr. Unsec. Global Notes, 7.38%, 05/01/18		150,000		156,375
Semiconductors–1.84%
Advanced Micro Devices Inc., Sr. Unsec. Notes, 7.75%, 08/01/20(b)		30,000		31,200
Freescale Semiconductor Inc., Sr. Sec. Gtd. Notes, 9.25%, 04/15/18(b)		109,000		120,445
Sr. Unsec. Gtd. Notes, 10.75%, 08/01/20(b)		105,000		115,237
Sr. Unsec. Gtd. PIK Global Notes, 9.13%, 12/15/14		190,000		199,025

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Securities Fund

	Principal
	Amount		Value
Semiconductors–(continued)
NXP B.V./NXP Funding LLC (Netherlands), Sr. Sec. Gtd. Global Notes, 7.88%, 10/15/14	$	120,000	$	125,550
				591,457
Specialized Finance–1.84%
CIT Group Inc., Sr. Sec. Bonds, 7.00%, 05/01/17		590,000		592,950
Specialized REIT’s–0.40%
Host Hotels & Resorts Inc., Sr. Gtd. Notes, 6.00%, 11/01/20(b)		75,000		73,875
Omega Healthcare Investors Inc., Sr. Unsec. Gtd. Notes, 6.75%, 10/15/22(b)		55,000		54,588
				128,463
Specialty Chemicals–1.21%
Ferro Corp., Sr. Unsec. Notes, 7.88%, 08/15/18		105,000		111,037
Huntsman International LLC, Sr. Unsec. Gtd. Sub. Global Notes, 7.38%, 01/01/15		105,000		107,888
Nalco Co., Sr. Notes, 6.63%, 01/15/19(b)		25,000		25,625
PolyOne Corp., Sr. Unsec. Notes, 7.38%, 09/15/20		140,000		145,600
				390,150
Specialty Stores–0.61%
Michaels Stores Inc.,
Sr. Notes, 7.75%, 11/01/18(b)		25,000		24,938
Sr. Unsec. Gtd. Sub. Disc. Global Notes, 13.00%, 11/01/16(d)		175,000		172,812
				197,750
Steel–0.92%
AK Steel Corp., Sr. Unsec. Gtd. Notes, 7.63%, 05/15/20		110,000		111,100
FMG Resources Ltd., Sr. Notes, 6.38%, 02/01/16(b)		65,000		65,188
Steel Dynamics Inc., Sr. Unsec. Gtd. Global Notes, 7.75%, 04/15/16		40,000		42,400
United States Steel Corp., Sr. Unsec. Notes, 7.00%, 02/01/18		55,000		55,550
7.38%, 04/01/20		20,000		20,400
				294,638
Systems Software–1.95%
Allen Systems Group Inc., Sr. Sec. Notes, 10.50%, 11/15/16(b)		205,000		210,125
Vangent Inc., Sr. Unsec. Gtd. Sub. Global Notes, 9.63%, 02/15/15		460,000		418,600
				628,725
Tires & Rubber–0.54%
Cooper Tire & Rubber Co., Sr. Unsec. Notes, 8.00%, 12/15/19		170,000		174,250
Trading Companies & Distributors–2.37%
Ashtead Capital Inc., Sr. Sec. Gtd. Notes, 9.00%, 08/15/16(b)		200,000		209,500
Avis Budget Car Rental LLC/Avis Budget Finance Inc., Sr. Unsec. Gtd. Notes, 8.25%, 01/15/19(b)		160,000		162,000
H&E Equipment Services Inc., Sr. Unsec. Gtd. Global Notes, 8.38%, 07/15/16		185,000		189,625
Hertz Corp. (The), Sr. Unsec. Gtd. Notes, 7.38%, 01/15/21(b)		125,000		128,125
7.50%, 10/15/18(b)		70,000		73,325
				762,575
Wireless Telecommunication Services–5.58%
Clearwire Communications LLC/Clearwire Finance Inc., Sr. Sec. Gtd. Notes, 12.00%, 12/01/15(b)		295,000		320,075
Sr. Unsec. Gtd. Conv. Putable Notes, 8.25%, 12/01/17(b)		35,000		35,700
Cricket Communications, Inc., Sr. Sec. Gtd. Global Notes, 7.75%, 05/15/16		115,000		120,031
Sr. Unsec. Gtd. Notes, 7.75%, 10/15/20(b)		105,000		100,800
Digicel Group Ltd. (Bermuda), Sr. Unsec. Notes, 8.88%, 01/15/15(b)		150,000		152,437
MetroPCS Wireless Inc., Sr. Unsec. Gtd. Notes, 6.63%, 11/15/20		95,000		90,725
7.88%, 09/01/18		65,000		67,316
SBA Telecommunications Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 08/15/19		90,000		98,550
Sprint Capital Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 11/15/28		175,000		153,344
6.90%, 05/01/19		405,000		404,494
Sprint Nextel Corp., Sr. Unsec. Notes, 8.38%, 08/15/17		25,000		26,687
Wind Acquisition Finance S.A. (Luxembourg), Sr. Sec. Gtd. Sub. Notes, 11.75%, 07/15/17(b)		200,000		225,000
				1,795,159
Total U.S. Dollar Denominated Bonds & Notes (Cost $33,641,053)				27,966,830
Non-U.S. Dollar Denominated Bonds & Notes–7.15%(g)
Canada–0.19%
Gateway Casinos & Entertainment Ltd., Sr. Sec. Gtd. Notes, 8.88%, 11/15/17(b)	CAD	60,000	$	62,381
Czech Republic–0.22%
CET 21 spol sro, Sr. Sec. Notes, 9.00%, 11/01/17(b)	EUR	50,000		69,154
Ireland–0.80%
Ardagh Packaging Finance PLC, Sr. Gtd. Notes, 9.25%, 10/15/20(b)	EUR	100,000		137,640
Bord Gais Eireann, Sr. Unsec. Medium-Term Euro Notes, 5.75%, 06/16/14	EUR	95,000		120,340
				257,980

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Securities Fund

	Principal
	Amount		Value
Luxembourg–2.12%
Calcipar S.A., Sr. Unsec. Gtd. Floating Rate Notes, 2.09%, 07/01/14(b)(e)	EUR	100,000	$	120,936
Codere Finance Luxembourg S.A., Sr. Sec. Gtd. Notes, 8.25%, 06/15/15(b)	EUR	100,000		133,631
ConvaTec Healthcare S.A., Sr. Sec. Notes, 7.38%, 12/15/17(b)	EUR	100,000		135,969
TMD Friction Finance S.A., Sr. Sec. Gtd. Bonds, 10.75%, 05/15/17(b)	EUR	115,000		157,502
Wind Acquisition Finance S.A., Sr. Sec. Gtd. Notes, 7.38%, 02/15/18(b)	EUR	100,000		134,633
				682,671
Netherlands–1.75%
Carlson Wagonlit B.V., Sr. Gtd. Floating Rate Notes, 6.80%, 05/01/15(b)(e)	EUR	100,000		128,954
EN Germany Holdings B.V., Sr. Sec. Gtd. Notes, 10.75%, 11/15/15(b)	EUR	100,000		137,511
Polish Television Holding B.V., Sr. Sec. Bonds, 11.25%, 05/15/17(b)(d)	EUR	50,000		69,157
Ziggo Bond Co. B.V., Sr. Sec. Gtd. Notes, 8.00%, 05/15/18(b)	EUR	165,000		228,208
				563,830
Spain–0.20%
Inaer Aviation Finance Ltd., Sr. Sec. Bonds, 9.50%, 08/01/17(b)	EUR	50,000		64,143
Sweden–0.23%
TVN Finance Corp II A.B., Sr. Unsec. Gtd. Notes, 10.75%, 11/15/17(b)	EUR	50,000		73,831
United Kingdom–1.64%
ITV PLC,
Series 2005-1, Unsec. Gtd. Unsub. Medium-Term
Euro Notes, 5.38%, 10/19/15	GBP	50,000		76,005
Series 2006-1 Tranche 1, Unsec. Gtd. Unsub.
Medium-Term Euro Notes, 7.38%, 01/05/17	GBP	50,000		79,903
Kerling PLC, Sr. Sec. Gtd. Notes, 10.63%, 02/01/17(b)	EUR	50,000		72,495
Pipe Holdings PLC, Sr. Sec. Bonds, 9.50%, 11/01/15(b)	GBP	100,000		159,417
R&R Ice Cream Ltd., Sr. Sec. Notes, 8.38%, 11/15/17(b)	EUR	100,000		140,316
				528,136
Total Non-U.S. Dollar Denominated Bonds & Notes (Cost $2,307,513)				2,302,126
	Shares
Preferred Stocks–1.30%
Automobile Manufacturers–0.26%
General Motors Co., Series B, 4.75%–Pfd.		1,520		82,247
Diversified Banks–0.74%
Ally Financial, Inc., Series G, 7.00%–Pfd.(b)		252		238,179
Other Diversified Financial Services–0.30%
Citigroup Capital XIII, 7.88% Variable Rate Pfd.(e)		3,600		96,702
Total Preferred Stocks (Cost $312,761)				417,128
	Principal
	Amount
Senior Secured Floating Rate Interest Loans–1.19%
Casinos & Gaming–0.97%
CCM Merger Inc. Sr. Sec. First Lien Term Loans, 8.50%, 07/13/12	$	310,720		311,573
Electric Utilities–0.22%
Calpine Corp. Floating Rate First Priority Lien Term Loan, 3.17%, 03/29/14		69,685		69,698
Total Senior Secured Floating Rate Interest Loans (Cost $339,765)				381,271
	Shares
Common Stocks & Other Equity Interests–0.08%
Communications Equipment–0.05%
Orbcomm, Inc.(h)		6,198		16,053
Wireless Telecommunication Services–0.03%
USA Mobility, Inc.		554		9,845
Total Common Stocks & Other Equity Interests (Cost $0)				25,898
Money Market Funds–1.79%
Liquid Assets Portfolio–Institutional Class(i)		288,644		288,644
Premier Portfolio–Institutional Class(i)		288,644		288,644
Total Money Market Funds (Cost $577,288)				577,288
TOTAL INVESTMENTS–98.43% (Cost $37,178,380)				31,670,541
OTHER ASSETS LESS LIABILITIES–1.57%				506,010
NET ASSETS–100.00%			$	32,176,551

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Securities Fund

Investment Abbreviations:

CAD	– Canadian Dollar
Conv.	– Convertible
Ctfs.	– Certificates
Deb.	– Debentures
Disc.	– Discounted
EUR	– Euro
GBP	– British Pound
Gtd.	– Guaranteed
Jr.	– Junior
Pfd.	– Preferred
PIK	– Payment in Kind
REIT	– Real Estate Investment Trust
Sec.	– Secured
Sr.	– Senior
Sub.	– Subordinated
Unsec.	– Unsecured
Unsub.	– Unsubordinated

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2010 was $10,576,649, which represented 32.87% of the Fund’s Net Assets.
(c)	Defaulted security. Currently, the issuer is partially or fully in default with respect to interest payments. The aggregate value of these securities at December 31, 2010 was $96,394, which represented 0.30% of the Fund’s Net Assets.
(d)	Step coupon bond. The interest rate represents the coupon rate at which the bond will accrue at a specified future date.
(e)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2010.
(f)	Perpetual bond with no specified maturity date.
(g)	Foreign denominated security. Principal amount is denominated in currency indicated.
(h)	Non-income producing security.
(i)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Securities Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $36,601,092)	$	31,093,253
Investments in affiliated money market funds, at value and cost		577,288
Total investments, at value (Cost $37,178,380)		31,670,541
Cash		6,680
Receivable for:
Investments sold		143,929
Fund shares sold		535
Dividends and interest		811,770
Investment for trustee deferred compensation and retirement plans		1,084
Other assets		1,539
Total assets		32,636,078
Liabilities:
Payable for:
Investments purchased		83,592
Fund shares reacquired		5,022
Amount due custodian — foreign (Cost $5,419)		5,512
Accrued fees to affiliates		30,976
Accrued other operating expenses		332,046
Trustee deferred compensation and retirement plans		2,379
Total liabilities		459,527
Net assets applicable to shares outstanding	$	32,176,551
Net assets consist of:
Shares of beneficial interest	$	219,408,208
Undistributed net investment income		1,946,344
Undistributed net realized gain (loss)		(183,669,959	)
Unrealized appreciation (depreciation)		(5,508,042	)
	$	32,176,551
Net Assets:
Series I	$	16,048,762
Series II	$	16,127,789
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		13,974,880
Series II		14,055,937
Series I:
Net asset value per share	$	1.15
Series II:
Net asset value per share	$	1.15

Statement of Operations

For the year ended December 31, 2010

Investment income:
Interest	$	3,040,540
Dividends (net of foreign withholding taxes of $488)		12,629
Dividends from affiliated money market funds (includes securities lending income of $4,371)		5,481
Total investment income		3,058,650
Expenses:
Advisory fees		137,515
Administrative services fees		60,820
Custodian fees		4,909
Distribution fees — Series II		41,191
Transfer agent fees		1,603
Trustees’ and officers’ fees and benefits		9,204
Professional services fees		394,931
Other		40,038
Total expenses		690,211
Less: Fees waived		(1,804	)
Net expenses		688,407
Net investment income		2,370,243
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		(43,906,031	)
Foreign currencies		5,375
		(43,900,656	)
Change in net unrealized appreciation (depreciation) of:
Investment securities		44,931,228
Foreign currencies		(203	)
		44,931,025
Net realized and unrealized gain		1,030,369
Net increase in net assets resulting from operations	$	3,400,612

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. High Yield Securities Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	2,370,243		$	2,629,901
Net realized gain (loss)		(43,900,656	)		(2,347,089	)
Change in net unrealized appreciation		44,931,025			10,752,985
Net increase in net assets resulting from operations		3,400,612			11,035,797
Distributions to shareholders from net investment income:
Series I		(1,323,198	)		(1,215,369	)
Series II		(1,325,494	)		(1,195,423	)
Total distributions from net investment income		(2,648,692	)		(2,410,792	)
Share transactions–net:
Series I		(1,163,101	)		(697,591	)
Series II		(958,872	)		(1,580,466	)
Net increase (decrease) in net assets resulting from share transactions		(2,121,973	)		(2,278,057	)
Net increase in net assets		(1,370,053	)		6,346,948
Net assets:
Beginning of year		33,546,604			27,199,656
End of year (includes undistributed net investment income of $1,946,344 and $2,239,958, respectively)	$	32,176,551		$	33,546,604

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. High Yield Securities Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as Morgan Stanley Variable Investment High Yield (the “Acquired Fund”), an investment portfolio of Morgan Stanley Variable Investment Series. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class X and Y shares received Series I and II shares, respectively, of the Fund. Information for the Acquired Fund’s Class X and Y shares prior to the Reorganization is included with Series I and II shares, respectively, of the Fund throughout this report.

  The Fund’s investment objective is to provide a high level of current income by investing in a diversified portfolio consisting principally of fixed-income securities, which may include both non-convertible and convertible debt securities and preferred stocks. As a secondary objective the Fund will seek capital appreciation, but only when consistent with its primary objective.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity

Invesco V.I. High Yield Securities Fund

	are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.

Invesco V.I. High Yield Securities Fund

D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
J.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $500 million		0	.42%
Next $250 million		0	.345%
Next $250 billion		0	.295%
Next $1 billion		0	.27%
Next $1 billion		0	.245%
Over $3 billion		0	.22%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee to Morgan Stanley Investment Advisors Inc. (“MSIA”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management,

Invesco V.I. High Yield Securities Fund

Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed, through at least June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 1.75% and Series II shares to 2.00% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds. Prior to the Reorganization, investment advisory fees paid by the Acquired Fund were reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Funds–Money Market Portfolio–Institutional Class shares.

  For the year ended December 31, 2010, the Adviser and MSIA waived advisory fees of $941 and $863, respectively.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $29,315 for accounting and fund administrative services and reimbursed $20,480 for services provided by insurance companies. Prior to the Reorganization, the Acquired Fund paid an administration fee of $11,025 to Morgan Stanley Services Company, Inc.

  Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian, fund accountant and provides certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. Prior to the Reorganization, the Acquired Fund paid $208 to Morgan Stanley Trust, which served as the Acquired Fund’s transfer agent. For the year ended December 31, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. Prior to the Reorganization, the Acquired Fund paid distribution fees of $17,330 to Morgan Stanley Distributors Inc. based on the annual rate of 0.25% of the Acquired Fund’s average daily net assets of Class Y shares. For the year ended December 31, 2010, expenses incurred under the Plans are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. 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.

Invesco V.I. High Yield Securities Fund

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	685,433	$	334,881	$	—	$	1,020,314
Corporate Debt Securities		—		30,650,227		0		30,650,227
Total Investments	$	685,433	$	30,985,108	$	0	$	316,670,541

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  For the period June 1, 2010 to December 31, 2010, the Fund paid legal fees of $602 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Distributions to Shareholders:

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary Income	$	2,648,692	$	2,410,792

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	2,239,436
Net unrealized appreciation (depreciation) — investments		(5,795,852	)
Net unrealized appreciation (depreciation) — other investments		(203	)
Temporary book/tax differences		(2,281	)
Post-October deferrals		(4,695	)
Capital loss carryforward		(183,668,062	)
Shares of beneficial interest		219,408,208
Total net assets	$	32,176,551

  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, defaulted securities and bond discount amortization.

  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.

Invesco V.I. High Yield Securities Fund

  The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2011	$	81,457,642
December 31, 2012		24,097,704
December 31, 2013		15,736,680
December 31, 2014		6,219,062
December 31, 2016		1,794,343
December 31, 2017		10,401,018
December 31, 2018		43,961,613
Total capital loss carryforward	$	183,668,062

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $36,282,093 and $38,456,500, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	1,840,539
Aggregate unrealized (depreciation) of investment securities		(7,636,391	)
Net unrealized (depreciation) appreciation of investment securities	$	(5,795,852	)
Cost of investments for tax purposes is $37,466,393.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforward, on December 31, 2010, undistributed net investment income was decreased by $15,165, undistributed net realized gain (loss) was increased by $63,603,205 and shares of beneficial interest decreased by $63,588,040. This reclassification had no effect on the net assets of the Fund.

NOTE 9—Share Information

	Summary of Share Activity
	Years ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		685,783		$	764,001			885,547		$	849,248
Series II		598,859			659,318			408,859			415,103
Issued as reinvestment of dividends:
Series I		1,272,306			1,323,198			1,279,336			1,215,369
Series II		1,274,514			1,325,494			1,258,340			1,195,423
Reacquired:
Series I		(2,886,241	)		(3,250,300	)		(2,812,285	)		(2,762,208	)
Series II		(2,643,132	)		(2,943,684	)		(3,277,685	)		(3,190,992	)
Net increase (decrease) in share activity		(1,697,911	)	$	(2,121,973	)		(2,257,888	)	$	(2,278,057	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 93% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. High Yield Securities Fund

NOTE 10—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																					Ratio of			Ratio of
					Net gains																expenses			expenses
					(losses)																to average			to average net			Ratio of net
	Net asset				on securities						Dividends										net assets			assets without			investment
	value,		Net		(both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	1.13	$	0.08	$	0.04		$	0.12		$	(0.10	)	$	1.15		10.19	%	$	16,049		1.97	%(d)		1.98	%(d)		7.37	%(d)		116	%
Year ended 12/31/09		0.85		0.09		0.27			0.36			(0.08	)		1.13		44.56			16,824		1.74	(e)		1.75	(e)		8.76	(e)		75
Year ended 12/31/08		1.13		0.07		(0.33	)		(0.26	)		(0.02	)		0.85		(23.13	)		13,226		1.48	(e)		1.48	(e)		6.90	(e)		44
Year ended 12/31/07		1.16		0.08		(0.03	)		0.05			(0.08	)		1.13		4.17			21,625		1.18			1.18			6.48			26
Year ended 12/31/06		1.14		0.08		0.02			0.10			(0.08	)		1.16		9.29			27,907		0.95			0.95			6.78			23
Series II
Year ended 12/31/10		1.13		0.08		0.03			0.11			(0.09	)		1.15		10.36			16,128		2.22	(d)		2.23	(d)		7.12	(d)		116
Year ended 12/31/09		0.85		0.08		0.28			0.36			(0.08	)		1.13		44.27			16,723		1.99	(e)		2.00	(e)		8.51	(e)		75
Year ended 12/31/08		1.13		0.07		(0.33	)		(0.26	)		(0.02	)		0.85		(23.20	)		13,973		1.73	(e)		1.73	(e)		6.65	(e)		44
Year ended 12/31/07		1.16		0.07		(0.03	)		0.04			(0.07	)		1.13		3.90			24,433		1.43			1.43			6.23			26
Year ended 12/31/06		1.14		0.08		0.02			0.10			(0.08	)		1.16		9.01			30,764		1.20			1.20			6.53			23

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s) of $16,265 and $16,476 for Series I and Series II shares, respectively.
(e)	The ratios reflect the rebate of certain Fund expenses in connection with investments in a Morgan Stanley affiliate during the period. The effect of the ratios are 0.01% and less than 0.005% for the years ended December 31, 2009 and 2008, respectively.

NOTE 11—Change in Independent Registered Public Accounting Firm (unaudited)

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Invesco V.I. High Yield Securities Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. High Yield Securities Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. High Yield Securities Fund (formerly known as Morgan Stanley Variable Investment Series High Yield Portfolio one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, 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 then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets for the year ended December 31, 2009 and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 26, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. High Yield Securities Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,075.50	$	11.56	$	1,014.06	$	11.22		2.21	%
Series II		1,000.00		1,075.50		12.87		1,012.80		12.48		2.46

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. High Yield Securities 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	0.00%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. High Yield Securities Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Income Builder Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

MS-VIIBU-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the 12 months ended December 31, 2010, Invesco V.I. Income Builder Fund underperformed the Russell 1000 Value Index, but outperformed the Barclays Capital U.S. Government/Credit Index. Stock selection in various sectors was the primary driver of the Fund’s relative performance based on our bottom-up stock selection approach.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	12.37	%
Series II Shares	12.14
Russell 1000 Value Index▼	15.51
Barclays Capital U.S. Government/Credit Index▼	6.59

^▼ Lipper Inc.

How we invest

We describe our investment philosophy as “value with a catalyst.” We believe that undervalued companies experiencing positive changes (i.e., “catalysts”) have the potential to generate long-term stock price growth for shareholders. We generally seek to identify companies that are out of favor with investors, underearning relative to their potential and attractively valued. For these companies, we attempt to identify catalysts that may improve the financial results and/or correct the undervaluation. Examples of catalysts typically include improved operational efficiency, changing industry dynamics and/or a change in management.

     We initially identify potential investments through a series of quantitative screens including, but not limited to, return on capital and enterprise value to sales metrics. We then conduct fundamental research on the most attractive opportunities. The research process includes a thorough review of a company’s financial statements, an evaluation of its competitive position and

stability, and meetings with its executives. During the research process, we also value the company under various scenarios to determine if the investment is an attractive opportunity relative to its risks. This is also where we typically identify the positive catalyst, a prerequisite for potential investment. Finally, we generally set a price target for a stock based on normalized earnings and historical valuation multiples.

     In short, our objective is to exploit negative sentiment toward a company’s stock by analyzing the company’s operations in the context of a cyclical environment and identifying one or more catalysts that may improve the company’s financial performance. Improved financial performance, in turn, has the potential to drive the company’s stock price higher.

     We typically sell an investment when it reaches our estimate of fair value or when we identify a more attractive investment opportunity.

     The Fund also invests in convertible securities, investment-grade corporate bonds and U.S. government issued bonds.

The fixed-income portion of the portfolio has the potential to reduce volatility compared to an equity-only portfolio and provide some downside protection during periods of stock market volatility.

Market conditions and your Fund

Equity markets were choppy during the fiscal year as investors weighed the competing issues of solid corporate profits and soft macroeconomic data. Corporate earnings were largely positive, but often overshadowed by concerns about high unemployment, a lack of consumer spending, soft housing data and the possibility of additional U.S. Federal Reserve accommodation. After rising through April, major equity indexes sold off precipitously in May as the sovereign debt crisis unfolded in the eurozone while U.S. economic indicators remained weak, prompting fears of a double-dip recession. Uncertainty created by the debt crisis combined with subdued employment, consumer spending and housing data added to concerns that the recovery was slowing to a subnormal growth rate. Just as abruptly, however, markets reversed course starting in September and rallied through the end of the year on modestly better economic news. The major equity indexes garnered positive returns for the year, and all 10 sectors within the S&P 500 Index posted gains. More economically sensitive sectors such as consumer discretionary and industrials had the highest returns, while the less economically sensitive sectors such as health care had some of the lowest returns.

     The broad U.S. bond market — as measured by the Barclays Capital U.S. Aggregate Index — generated positive total return for the 12-month period ended December 31, 2010. At the beginning of the period, falling interest

Portfolio Composition

By sector

Financials	18.1	%
Consumer Discretionary	15.9
Consumer Staples	12.8
Information Technology	12.5
Energy	11.1
Industrials	8.1
Health Care	7.4
Materials	6.3
Utilities	3.0
Telecommunication Services	2.1
Money Market Funds
Plus Other Assets Less Liabilities	2.7

Top 10 Equity Holdings*

1.	JPMorgan Chase & Co.	3.6	%
2.	General Electric Co.	3.0
3.	Marsh & McLennan Cos., Inc.	2.5
4.	Viacom Inc.— Class B	2.3
5.	Occidental Petroleum Corp.	1.9
6.	Anadarko Petroleum Corp.	1.8
7.	eBay Inc.	1.8
8.	Tyco International Ltd.	1.6
9.	Royal Dutch Shell PLC-ADR	1.6
10.	Equity Residential	1.6

Top Five Industries*

1.	Hotels, Resorts & Cruise Lines	6.7	%
2.	Integrated Oil & Gas	6.3
3.	Other Diversified Financial Services	6.1
4.	Semiconductors	5.3
5.	Industrial Conglomerates	4.5

Total Net Assets	$31.8 million
Total Number of Holdings*		83

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.

Invesco V.I. Income Builder Fund

rates across maturities combined with tighter credit spreads (the difference between the yields of U.S. Treasuries and other types of fixed-income securities that carry credit risk) caused bond prices to rise. Conversely, during the fourth quarter, a marked rise in rates late in the year negatively affected bond prices, particularly in U.S. Treasuries.

     Stock selection and an underweight position within the health care sector contributed the most to relative performance. The portfolio owned Genzyme, a biotechnology company that received a takeover offer from Sanofiaventis (not a Fund holding). The stock rose significantly on the news, and the team eliminated the position. Genzyme is no longer held by the Fund.

     Stock selection in the telecommunication services sector also aided relative performance. Vodafone helped performance, and the company has about a 45% ownership stake in Verizon Wireless. The wireless carrier has been able to grow its subscriber base, and investors are anticipating the introduction of the iPhone into the network.

     However, offsetting the positive results was the negative impact of the consumer discretionary and the information technology (IT) sectors.

     Security selection within consumer discretionary was one of the largest detractors from performance. A convertible security within the consumer services industry, specifically a hotel chain, lagged in performance during the period.

     The portfolio had an overweight position in IT stocks throughout the period, with most of the exposure in hardware/equipment stocks and software services. Stock selection in hardware and equipment detracted the most from relative performance. Additionally, the unexpected departure of Hewlett Packard’s CEO weighed heavily on its stock price. As of the end of the period, the Fund continued to own the stock.

     Equity markets experienced a strong recovery during the period covered by this report. We believe the market volatility that occurred during 2010 may continue to create opportunities to invest in companies with attractive valuations and strong fundamentals. We believe that ultimately those valuations and fundamentals may be reflected in companies’ stock prices.

     As always, we would like to caution investors against making investment decisions based on short-term performance. We recommend that you consult your financial adviser to discuss your individual financial program.

     Thank you for your investment in Invesco V.I. Income Builder Fund and for sharing our long-term investment horizon.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Thomas Bastian

Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Income Builder Fund. Mr. Bastian joined Invesco in 2010. He earned a B.A. in accounting from St. John’s University and an M.B.A. in finance from the University of Michigan.

Mary Jayne Maly

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Income Builder Fund. Ms. Maly joined Invesco in 2010. She earned a B.A. from the University of Pittsburgh and an M.B.A. from the American Graduate School of International Management.

Ellen Gold

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Income Builder Fund. Ms. Gold joined Invesco in 2010. She earned a B.B.A. from George Washington University and an M.B.A. from New York University.

James Roeder

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Income Builder Fund. Mr. Roeder joined Invesco in 2010. He earned a B.S. in accounting from Clemson University and an M.B.A. in economics and finance from the University of Chicago Graduate School of Business. Mr. Roeder is a Certified Public Accountant.

Mark Laskin

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Income Builder Fund. Mr. Laskin joined Invesco in 2010. He earned a B.A. in history from Swarthmore College and an M.B.A. and M.A. from the Wharton School and Lauder Institute, respectively, of the University of Pennsylvania.

Sergio Marcheli

Portfolio manager, is manager of Invesco V.I. Income Builder Fund. Mr. Marcheli joined Invesco in 2010. He earned a B.B.A. from the University of Houston and an M.B.A. from the University of St. Thomas.

Invesco V.I. Income Builder Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Fund data from 1/21/97, index data from 1/31/97

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (1/21/97)			5.97	%
	10	Years	5.17
	5	Years	4.09
	1	Year	12.37
Series II Shares
Inception (6/5/00)			4.75	%
	10	Years	4.92
	5	Years	3.85
	1	Year	12.14

Effective June 1, 2010, Class X and Class Y shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Series I and Series II shares, respectively, of Invesco V.I. Income Builder Fund. Returns shown above for Series I and Series II shares are blended returns of the predecessor fund and Invesco V.I. Income Builder Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be

lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.02% and 1.27%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.35% and 1.60%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Income Builder Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered

through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower.

1 Total annual fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco V.I. Income Builder Fund

Invesco V.I. Income Builder Fund’s primary investment objective is to seek reasonable income. As a secondary objective, the Fund seeks growth of capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

In general, prices of equity securities are more volatile than those of fixed income securities. Prices of equity securities will rise and fall in response to events that affect entire financial markets or industries and to events that affect particular issuers. Investing in convertible securities may subject the portfolio to the risks associated with both fixed income securities and common stocks.

     The risks of investing in securities of foreign issuers can include fluctuations in foreign currencies, foreign currency exchange controls, political and economic instability, differences in financial reporting, differences in securities regulation and trading, and foreign taxation issues. The Fund may also invest in issuers in developing or emerging market countries, which are subject to greater risks than investments in securities of issuers in developed countries.

     Credit risk refers to the possibility that the issuer of a security will be unable or unwilling to make interest payments and/ or repay the principal on its debt. In the case of revenue bonds, notes or commercial paper, for example, the credit risk is the possibility that the user fees from a project or other specified revenue sources are insufficient to meet interest and/or principal payment obligations.

     Interest rate risk refers to fluctuations in the value of a fixed-income security resulting from changes in the general level of interest rates. When the general level of interest rates goes up, the prices of most fixed-income securities go down. When the general level of interest rates goes down, the prices of most fixed-income securities go up. Zero coupon securities are typically subject to greater price fluctuations than comparable securities that pay current interest.

     Investments in small- and mid-size companies may involve greater risk than investments in larger, more established companies. Small-to-mid capitalization value-oriented equity securities may underperform relative to the overall market. The securities issued by small and mid-size companies may be less liquid and their prices subject to more abrupt or erratic price movements.

     The Fund’s investments in fixed-income securities rated lower than investment grade, or if unrated, of comparable quality as determined by the adviser, otherwise known as junk bonds, pose significant risks. The prices of junk bonds are likely to be more sensitive to adverse economic changes or individual corporate developments than higher rated securities. The secondary market for junk bonds may be less liquid than the market for higher quality securities.

     The Fund emphasizes a value style of investing, which focuses on undervalued companies with characteristics for improved valuations. This style of investing is subject to the risk that the valuations never improve or that the returns on “value” equity securities are less than returns on other styles of investing or the overall stock market. Value stocks also may decline in price, even though in theory they are already underpriced.

     Investing in real estate investment trusts (REITs) makes the Fund more susceptible to risks associated with the ownership of real estate and with the real estate industry in general and may involve duplication of management fees and other expenses. REITs may be less diversified than other pools of securities, may have lower trading volumes and may be subject to more abrupt or erratic price movements than the overall securities markets.

About indexes used in this report

The Russell 1000^® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Barclays Capital U.S. Government/Credit Index includes Treasuries and agencies that represent the government portion of the index, and includes publicly issued U.S. corporate and foreign debentures and secured notes that meet specified maturity, liquidity, and quality requirements to represent the credit interests.

     The Barclays Capital U.S. Aggregate Index is an unmanaged index considered representative of U.S. investment-grade bonds.

     The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     CPA^® and Certified Public Accountant^® are trademarks owned by the American Institute of Certified Public Accountants.

     Industry classifications used in this report are generally classified 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Income Builder Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–77.16%
Air Freight & Logistics–0.40%
FedEx Corp.		1,384	$	128,726
Asset Management & Custody Banks–0.85%
State Street Corp.		5,820		269,699
Automobile Manufacturers–1.28%
Ford Motor Co.(b)		13,142		220,654
General Motors Co.(b)		5,041		185,811
				406,465
Cable & Satellite–2.36%
Comcast Corp.–Class A		19,422		426,701
Time Warner Cable Inc.		4,897		323,349
				750,050
Communications Equipment–0.79%
Cisco Systems, Inc.(b)		12,488		252,632
Computer Hardware–2.09%
Dell Inc.(b)		22,233		301,257
Hewlett-Packard Co.		8,624		363,071
				664,328
Consumer Electronics–0.90%
Sony Corp.–ADR (Japan)		8,055		287,644
Data Processing & Outsourced Services–0.83%
Western Union Co. (The)		14,238		264,400
Diversified Banks–1.26%
U.S. Bancorp		6,010		162,090
Wells Fargo & Co.		7,703		238,716
				400,806
Diversified Chemicals–1.46%
Dow Chemical Co. (The)		6,737		230,001
PPG Industries, Inc.		2,800		235,396
				465,397
Diversified Support Services–0.41%
Cintas Corp.		4,637		129,651
Drug Retail–1.15%
Walgreen Co.		9,436		367,627
Electric Utilities–3.03%
American Electric Power Co., Inc.		13,481		485,046
Edison International		3,999		154,362
Entergy Corp.		2,139		151,505
FirstEnergy Corp.		4,705		174,179
				965,092
Food Distributors–0.71%
Sysco Corp.		7,685		225,939
Health Care Distributors–0.51%
Cardinal Health, Inc.		4,210		161,285
Health Care Equipment–0.94%
Covidien PLC (Ireland)(b)		6,572		300,077
Home Improvement Retail–1.09%
Home Depot, Inc. (The)		9,853		345,446
Household Products–1.47%
Procter & Gamble Co. (The)		7,281		468,387
Human Resource & Employment Services–0.90%
Manpower Inc.		2,592		162,674
Robert Half International, Inc.		4,067		124,450
				287,124
Hypermarkets & Super Centers–0.78%
Wal-Mart Stores, Inc.		4,594		247,754
Industrial Conglomerates–4.54%
General Electric Co.		51,737		946,270
Tyco International Ltd.		12,073		500,305
				1,446,575
Industrial Machinery–1.32%
Dover Corp.		2,228		130,227
Ingersoll-Rand PLC (Ireland)(b)		6,123		288,332
				418,559
Insurance Brokers–2.49%
Marsh & McLennan Cos., Inc.		29,053		794,309
Integrated Oil & Gas–6.26%
ConocoPhillips		2,904		197,762
Exxon Mobil Corp.		3,557		260,088
Hess Corp.		5,478		419,286
Occidental Petroleum Corp.		6,298		617,834
Royal Dutch Shell PLC–ADR (United Kingdom)		7,467		498,646
				1,993,616
Integrated Telecommunication Services–0.86%
Verizon Communications Inc.		7,652		273,789

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Income Builder Fund

	Shares		Value
Internet Software & Services–2.64%
eBay Inc.(b)		20,167	$	561,247
Yahoo! Inc.(b)		16,833		279,933
				841,180
Investment Banking & Brokerage–2.26%
Charles Schwab Corp. (The)		20,965		358,711
LPL Investment Holdings, Inc.(b)		752		27,350
Morgan Stanley		12,287		334,330
				720,391
IT Consulting & Other Services–0.68%
Amdocs Ltd.(b)		7,900		217,013
Life & Health Insurance–0.66%
Principal Financial Group, Inc.		6,495		211,477
Managed Health Care–1.43%
UnitedHealth Group Inc.		12,636		456,286
Movies & Entertainment–3.61%
Time Warner Inc.		13,178		423,936
Viacom Inc.–Class B		18,327		725,933
				1,149,869
Office Services & Supplies–0.49%
Avery Dennison Corp.		3,690		156,235
Oil & Gas Equipment & Services–1.60%
Cameron International Corp.(b)		1,900		96,387
Schlumberger Ltd.		4,950		413,325
				509,712
Oil & Gas Exploration & Production–2.98%
Anadarko Petroleum Corp.		7,421		565,183
Devon Energy Corp.		3,178		249,505
Noble Energy, Inc.		1,575		135,576
				950,264
Oil & Gas Storage & Transportation–0.25%
Williams Cos., Inc. (The)		3,166		78,264
Other Diversified Financial Services–6.14%
Bank of America Corp.		35,470		473,170
Citigroup Inc.(b)		71,064		336,133
JPMorgan Chase & Co.		27,022		1,146,273
				1,955,576
Packaged Foods & Meats–2.08%
Kraft Foods Inc.–Class A		11,051		348,217
Unilever N.V.–New York Shares (Netherlands)		9,985		313,529
				661,746
Personal Products–1.22%
Avon Products, Inc.		13,336		387,544
Pharmaceuticals–4.52%
Abbott Laboratories		3,367		161,313
Bristol-Myers Squibb Co.		14,623		387,217
Merck & Co., Inc.		6,068		218,691
Pfizer Inc.		25,100		439,501
Roche Holdings AG–ADR (Switzerland)		6,363		233,808
				1,440,530
Property & Casualty Insurance–0.59%
Chubb Corp. (The)		3,150		187,866
Regional Banks–2.29%
BB&T Corp.		5,281		138,837
Fifth Third Bancorp		9,567		140,444
PNC Financial Services Group, Inc.		7,399		449,267
				728,548
Residential REIT’s–1.55%
Equity Residential		9,515		494,304
Semiconductors–0.72%
Intel Corp.		10,884		228,890
Soft Drinks–0.97%
Coca-Cola Co. (The)		2,867		188,563
Coca-Cola Enterprises Inc.		4,842		121,195
				309,758
Specialty Chemicals–0.32%
LyondellBasell Industries N.V.–Class A (Netherlands)(b)		2,961		101,858
Systems Software–0.20%
Microsoft Corp.		2,256		62,988
Wireless Telecommunication Services–1.28%
Vodafone Group PLC–ADR (United Kingdom)		15,474		408,978
Total Common Stocks & Other Equity Interests (Cost $21,930,906)				24,574,654
	Principal
	Amount
Bonds & Notes–20.17%
Brewers–4.38%
Molson Coors Brewing Co., Sr. Unsec. Gtd. Conv. Notes, 2.50%, 07/30/13	$	1,200,000		1,395,000
Gold–4.52%
Newmont Mining Corp.–Series A, Sr. Unsec. Gtd. Conv. Notes, 1.25%, 07/15/14		1,000,000		1,438,750
Hotels, Resorts & Cruise Lines–6.71%
Starwood Hotels & Resorts Worldwide, Inc., Sr. Unsec. Gtd. Global Notes, 7.88%, 05/01/12		2,000,000		2,137,129

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Income Builder Fund

	Principal
	Amount		Value
Semiconductors–4.56%
Intel Corp., Jr. Unsec. Sub. Conv. Deb., 2.95%, 12/15/35(c)	$	1,450,000	$	1,451,812
Total Bonds & Notes (Cost $5,734,481)				6,422,691
	Shares
Money Market Funds–2.67%
Liquid Assets Portfolio–Institutional Class(d)		425,628		425,628
Premier Portfolio–Institutional Class(d)		425,628		425,628
Total Money Market Funds (Cost $851,256)				851,256
TOTAL INVESTMENTS–100.00% (Cost $28,516,643)				31,848,601
OTHER ASSETS LESS LIABILITIES–0.00%				1,220
NET ASSETS–100.00%			$	31,849,821

Investment Abbreviations:

ADR	– American Depositary Receipt
Conv.	– Convertible
Deb.	– Debentures
Gtd.	– Guaranteed
Jr.	– Junior
REIT	– Real Estate Investment Trust
Sr.	– Senior
Sub.	– Subordinate
Unsec.	– Unsecured

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The value of this security at December 31, 2010 represented 4.56% of the Fund’s Net Assets.
(d)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Income Builder Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $27,665,387)	$	30,997,345
Investments in affiliated money market funds, at value and cost		851,256
Total investments, at value (Cost $28,516,643)		31,848,601
Receivable for:
Fund shares sold		5,574
Dividends and interest		84,296
Investment for trustee deferred compensation and retirement plans		1,082
Other assets		681
Total assets		31,940,234
Liabilities:
Payable for:
Fund shares reacquired		1,059
Accrued fees to affiliates		54,249
Accrued other operating expenses		32,747
Trustee deferred compensation and retirement plans		2,358
Total liabilities		90,413
Net assets applicable to shares outstanding	$	31,849,821
Net assets consist of:
Shares of beneficial interest	$	31,248,781
Undistributed net investment income		382,364
Undistributed net realized gain (loss)		(3,113,282	)
Unrealized appreciation		3,331,958
	$	31,849,821
Net Assets:
Series I	$	16,704,980
Series II	$	15,144,841
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		1,585,907
Series II		1,444,046
Series I:
Net asset value per share	$	10.53
Series II:
Net asset value per share	$	10.49

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $9,268)	$	494,994
Dividends from affiliated money market funds		897
Interest		365,939
Total investment income		861,830
Expenses:
Advisory fees		212,064
Administrative services fees		85,234
Custodian fees		8,852
Distribution fees — Series II		37,809
Transfer agent fees		1,582
Trustees’ and officers’ fees and benefits		7,973
Reports to shareholders		27,726
Professional services fees		41,904
Other		7,105
Total expenses		430,249
Less: Fees waived		(68,687	)
Net expenses		361,562
Net investment income		500,268
Net realized and unrealized gain from:
Net realized gain from investment securities (includes net gains from securities sold to affiliates of $232)		1,897,933
Change in net unrealized appreciation of investment securities		1,204,952
Net realized and unrealized gain		3,102,885
Net increase in net assets resulting from operations	$	3,603,153

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Income Builder Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	500,268		$	697,812
Net realized gain (loss)		1,897,933			(3,563,908	)
Change in net unrealized appreciation		1,204,952			9,679,080
Net increase in net assets resulting from operations		3,603,153			6,812,984
Distributions to shareholders from net investment income:
Series I		(411,145	)		(528,794	)
Series II		(334,921	)		(448,809	)
Total distributions from net investment income		(746,066	)		(977,603	)
Distributions to shareholders from net realized gains:
Series I		—			(8,092	)
Series II		—			(7,525	)
Total distributions from net realized gains		—			(15,617	)
Share transactions–net:
Series I		(1,881,850	)		(2,039,090	)
Series II		(2,239,961	)		(2,346,524	)
Net increase (decrease) in net assets resulting from share transactions		(4,121,811	)		(4,385,614	)
Net increase (decrease) in net assets		(1,264,724	)		1,434,150
Net assets:
Beginning of year		33,114,545			31,680,395
End of year (includes undistributed net investment income of $382,364 and $655,381, respectively)	$	31,849,821		$	33,114,545

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. Income Builder Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as Morgan Stanley Variable Investment Income Builder Portfolio (the “Acquired Fund”), an investment portfolio of Morgan Stanley Variable Investment Series. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”). Upon closing of the Reorganization, holders of the Acquired Fund’s Class X and Y shares received Series I and II shares, respectively, of the Fund. Information for the Acquired Fund’s Class X and Y shares prior to the Reorganization is included with Series I and II shares, respectively, of the Fund throughout this report.

  The Fund’s primary investment objective is to seek reasonable income. As a secondary objective, the Fund seeks growth of capital.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate,

Invesco V.I. Income Builder Fund

	maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Senior secured floating rate loans and senior secured floating rate debt securities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may reflect appropriate factors such as ratings, tranche type, industry, company performance, spread, individual trading characteristics, institution-size trading in similar groups of securities and other market data.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees

Invesco V.I. Income Builder Fund

	and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $500 million		0	.67%
Over $500 million		0	.645%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee of $91,470 to Morgan Stanley Investment Advisors Inc. (“MSIA”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed, through at least June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 1.02% and Series II shares to 1.27% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds. Prior to the Reorganization, investment advisory fees paid by the Acquired Fund were reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class Shares.

  For the year ending December 31, 2010, the Adviser and MSIA waived advisory fees of $68,364 and $323, respectively.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $44,997 for accounting and fund administrative services and reimbursed $29,315 for services provided by insurance companies. Prior to the Reorganization, the Acquired Fund paid an administration fee of $10,922 to Morgan Stanley Services Company, Inc.

Invesco V.I. Income Builder Fund

  Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian, fund accountant and provides certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. Prior to the Reorganization, the Acquired Fund paid $207 to Morgan Stanley Trust, which served as the Acquired Fund’s transfer agent. For the year ended December 31, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. Prior to the Reorganization, the Acquired Fund paid $16,369 to Morgan Stanley Distributors Inc. based on the annual rate of 0.25% of the Acquired Fund’s average daily net assets of Class Y shares. For the year ended December 31, 2010, expenses incurred under the Plans are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	25,192,102	$	233,808	$	—	$	25,425,910
Corporate Debt Securities		—		6,422,691		—		6,422,691
	$	25,192,102	$	6,656,499	$	—	$	31,848,601

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $18,896 and securities sales of $1,133, which resulted in net realized gains of $232.

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $601 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

Invesco V.I. Income Builder 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. 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 Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	746,066	$	977,624
Long-term capital gain		—		15,596
Total distributions	$	746,066	$	993,220

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	467,828
Net unrealized appreciation — investments		3,063,192
Temporary book/tax differences		(2,260	)
Capital loss carryforward		(2,927,720	)
Shares of beneficial interest		31,248,781
Total net assets	$	31,849,821

  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 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 utilized $1,600,384 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2017	$	2,927,720

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $6,992,453 and $11,595,741, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	3,731,891
Aggregate unrealized (depreciation) of investment securities		(668,699	)
Net unrealized appreciation of investment securities	$	3,063,192
Cost of investments for tax purposes is $28,785,409.

Invesco V.I. Income Builder Fund

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of real estate investment trusts and bond premiums, on December 31, 2010, undistributed net investment income was decreased by $27,219 and undistributed net realized gain (loss) was increased by $27,219. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		75,038		$	742,424			84,206		$	700,726
Series II		64,271			615,894			46,979			393,492
Issued as reinvestment of dividends:
Series I		43,739			411,145			68,133			536,886
Series II		35,706			334,921			58,058			456,334
Reacquired:
Series I		(313,383	)		(3,035,419	)		(402,407	)		(3,276,702	)
Series II		(327,379	)		(3,190,776	)		(392,269	)		(3,196,350	)
Net increase (decrease) in share activity		(422,008	)	$	(4,121,811	)		(537,300	)	$	(4,385,614	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 92% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Income Builder Fund

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																												Ratio of			Ratio of
																												expenses			expenses
					Net gains																							to average			to average net			Ratio of net
	Net asset				(losses) on						Dividends			Distributions														net assets			assets without			investment
	value,		Net		securities (both			Total from			from net			from net						Net asset						Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			realized			Total			value, end			Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			Distributions			of period			return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	9.61	$	0.17	$	0.99		$	1.16		$	(0.24	)	$	—		$	(0.24	)	$	10.53			12.37	%	$	16,705		1.02	%(d)		1.24	%(d)		1.70	%(d)		23	%
Year ended 12/31/09		7.96		0.20		1.73			1.93			(0.28	)		0.00	(e)		(0.28	)		9.61			25.16			17,116		1.01	(f)		1.01	(f)		2.40	(f)		47
Year ended 12/31/08		12.86		0.31		(3.33	)		(3.02	)		(0.09	)		(1.79	)		(1.88	)		7.96			(26.29	)		16,164		0.90	(f)		0.90	(f)		2.95	(f)		35
Year ended 12/31/07		13.59		0.31		0.15			0.46			(0.38	)		(0.81	)		(1.19	)		12.86			3.21			28,244		0.85			0.85			2.31			32
Year ended 12/31/06		12.22		0.33		1.38			1.71			(0.34	)		—			(0.34	)		13.59			14.21			35,195		0.83			0.83			2.61			19
Series II
Year ended 12/31/10		9.57		0.14		1.00			1.14			(0.22	)		—			(0.22	)		10.49			12.14			15,145		1.27	(d)		1.49	(d)		1.45	(d)		23
Year ended 12/31/09		7.92		0.18		1.73			1.91			(0.26	)		0.00	(e)		(0.26	)		9.57			24.90			15,998		1.26	(f)		1.26	(f)		2.15	(f)		47
Year ended 12/31/08		12.82		0.29		(3.32	)		(3.03	)		(0.08	)		(1.79	)		(1.87	)		7.92	��		(26.44	)		15,517		1.15	(f)		1.15	(f)		2.70	(f)		35
Year ended 12/31/07		13.56		0.28		0.14			0.42			(0.35	)		(0.81	)		(1.16	)		12.82			2.86			34,717		1.10			1.10			2.06			32
Year ended 12/31/06		12.20		0.30		1.37			1.67			(0.31	)		—			(0.31	)		13.56			13.96			45,371		1.08			1.08			2.36			19

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s) of $16,527 and $15,124 for Series I and Series II shares, respectively.
(e)	Amount is less than $0.005.
(f)	The ratios reflect the rebate of certain fund expenses in connection with investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios was 0.01% and less than 0.005% for the years ended December 31, 2009 and 2008, respectively.

NOTE 12—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco Van Kampen V.I. Equity and Income Fund (the “Acquiring Fund”) in exchange for shares of the Acquiring Fund. The Agreement requires approval of the Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

NOTE 13—Change in Independent Registered Public Accounting Firm (unaudited)

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Invesco V.I. Income Builder Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds) and

Shareholders of Invesco V.I. Income Builder Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Income Builder Fund (formerly known as Income Builder Portfolio, one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 26, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Income Builder Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
			ACTUAL				(5% annual return before expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,183.10	$	5.58	$	1,020.10	$	5.16		1.01	%
Series II		1,000.00		1,182.60		6.95		1,018.84		6.43		1.26

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. Income Builder 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	58.19	%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Income Builder Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. S&P 500 Index Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

MS-VISPI-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

As part of Invesco’s June 1, 2010, acquisition of Morgan Stanley’s retail asset management business, Morgan Stanley Variable Investment Series V.I. S&P 500 Index Portfolio was reorganized as Invesco V.I. S&P 500 Index Fund. A listing of your Fund’s managers appears later in this report.

     For the year ended December 31, 2010, Series I shares of Invesco V.I. S&P 500 Index Fund performed in line with the S&P 500 Index. The Fund seeks to achieve a high level of total return on its assets through a combination of capital appreciation and current income.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	14.87	%
Series II Shares	14.58
S&P 500 Index▼ (Broad Market/Style-Specific Index)	15.08

^▼ Lipper Inc.

How we invest

The Fund invests in a diversified portfolio of common stocks represented in the S&P 500 Index. The S&P 500 Index is a well-known stock market index that includes common stocks of 500 companies. The Fund generally invests in each stock included in the S&P 500 Index in proportion to its market value or market capitalization. The Fund may invest in foreign securities represented in the S&P 500 Index, including depositary receipts. Sale of a security in this Fund is a function of Standard & Poor’s either adding or deleting a security from the S&P 500 Index. Securities that are added or deleted are driven by the index, not a stock selection model.

     The Fund may also invest in S&P 500 Index futures contracts. This type of investment is a derivative instrument since the price is derived from one or more underlying assets. The purpose of this investment is to provide full stock market exposure to the Fund’s nominal cash holdings.

Market conditions and your Fund

Equity markets were volatile during the year as investors weighed the competing issues of solid corporate profits and soft macroeconomic data. Corporate earnings were largely positive, but often overshadowed by concerns about high unemployment, a lack of consumer spending and soft housing data. After rising through April, major equity indexes sold off precipitously in May, as the sovereign debt crisis unfolded in the eurozone.

     Meanwhile, U.S. economic indicators remained weak, prompting concerns of a “double-dip” recession. Uncertainty created by the debt crisis, combined with subdued employment, consumer spending and housing data added to concerns that the recovery was slowing to a sub-normal growth rate. Just as abruptly, however, markets reversed course during the last quarter of the year and rallied on modestly better economic news: Inflation was tame, industrial production climbed and third quarter gross domestic product was revised

upward. Retail sales — arguably the most influential data for the end of the year — was 5.5% higher for the most recent holiday season compared to 2009.¹ Equity markets ended the year with double-digit gains.

     The major equity indexes had positive returns for the year, and all 10 sectors of the S&P 500 Index posted gains. All investment styles had positive returns, with small-cap stocks outperforming large-cap stocks and growth stocks slightly edging value stocks for the period.

     The Fund stayed true to its process by investing in all components of the S&P 500 Index. On an absolute basis, all sectors in the Fund posted positive returns for the reporting period. Sectors that contributed most to overall Fund performance were the consumer discretionary, energy, financials and industrials sectors. The health care and utilities sectors contributed the least. In addition the exposure to S&P 500 Index futures was a slight detractor from overall performance.

     Within the industrials sector, General Electric (GE) was a top contributor to Fund performance. GE’s products and services range from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and industrial products. The company has adopted strategic imperatives to strengthen its business by building strong growth platforms and generating cash from low-return businesses. Its focus is on accelerating organic growth and achieving technical and service excellence, while building enduring customer relationships around the world.

     Also contributing to the Fund’s positive performance were integrated oil and gas companies Exxon Mobil and Chevron.

Portfolio Composition

By sector

Information Technology	18.4	%
Financials	15.7
Energy	11.9
Industrials	10.8
Health Care	10.6
Consumer Discretionary	10.5
Consumer Staples	10.5
Materials	3.8
Utilities	3.2
Telecommunication Services	3.1
Other Assets Less Liabilities	1.5

Top 10 Equity Holdings

1.	Exxon Mobil Corp.	3.2	%
2.	Apple Inc.	2.5
3.	Microsoft Corp.	1.8
4.	General Electric Co.	1.7
5.	Chevron Corp.	1.6
6.	International Business Machines Corp.	1.6
7.	Procter & Gamble Co. (The)	1.5
8.	AT&T Inc.	1.5
9.	Johnson & Johnson	1.5
10.	JPMorgan Chase & Co.	1.4

Top Five Industries

1.	Integrated Oil & Gas	6.9	%
2.	Pharmaceuticals	5.4
3.	Computer Hardware	5.1
4.	Other Diversified Financial Services	3.8
5.	Systems Software	3.3

Total Net Assets	$126.1 million
Total Number of Holdings		500

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

Invesco V.I. S&P 500 Index Fund

     Detracting from Fund performance were select holdings in the information technology sector, including Microsoft, Hewlett-Packard and Cisco Systems. Hewlett-Packard was busy in 2010 with acquisitions. In April 2010, the company completed its purchase of 3Com. Then, in July 2010, Hewlett-Packard acquired Palm. During September and October, the company acquired Fortify Software, 3PAR, a global provider of utility storage, and ArcSight, a security and compliance management company.

     While the global economy appeared more stable entering 2011 than it did for the prior year, forecasting the future direction of the economy remained highly challenging. The bursting of the U.S. housing bubble and rising unemployment seemed likely to impede future economic growth, while massive fiscal and monetary stimulus seemed likely to promote economic growth.

     During the year, we were cautiously optimistic about the prospects for equities. Faced with moderate but positive economic growth, low inflation and prolonged government liquidity support, we believed equities could achieve gains. Further, valuations remained reasonable by historic standards, especially after the pullback during the second quarter of 2010.

     We welcome new investors who joined the Fund during the fiscal year and thank all of our shareholders for your investment in Invesco V.I. S&P 500 Index Fund.

1 Bloomberg

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Glen Murphy
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. S&P 500 Index Fund. Mr. Murphy joined Invesco in 1995. He earned a B.A. in business administration from the University of Massachusetts at Amherst and an M.S. in finance from Boston College.

Francis Orlando
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. S&P 500 Index Fund. He joined Invesco in 1987. Mr. Orlando earned a B.A. in business administration from Merrimack College and an M.B.A. from Boston University.

Anthony Munchak
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. S&P 500 Index Fund. He joined Invesco in 2000. Mr. Munchak earned a B.S. and M.S. in finance from Boston College and M.B.A. from Bentley College.

Daniel Tsai
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. S&P 500 Index Fund. Mr. Tsai joined Invesco in 2000. He earned a B.S. in mechanical engineering from National Taiwan University and an M.S. in mechanical engineering from the University of Michigan. He also earned an M.S. in computer science from Wayne State University.

Anne Unflat
Portfolio manager, is manager of Invesco V.I. S&P 500 Index Fund. Ms. Unflat joined Invesco in 1988. She graduated magna cum laude from Queens College with a B.A. in economics. She earned an M.B.A. in finance from St. John’s University.

Invesco V.I. S&P 500 Index Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Fund data from 5/18/98, index data from 5/31/98

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (5/18/98)			2.51	%
	10	Years	1.12
	5	Years	2.12
	1	Year	14.87
Series II Shares
Inception (6/5/00)			–0.16	%
	10	Years	0.86
	5	Years	1.86
	1	Year	14.58

Effective June 1, 2010, Class X and Class Y shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Series I and Series II shares, respectively, of Invesco V.I. S&P 500 Index Fund. Returns shown above for Series I and Series II shares are blended returns of the predecessor fund and Invesco V.I. S&P 500 Index Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future

results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.28% and 0.53%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.49% and 0.74%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. S&P 500 Index Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco V.I. S&P 500 Index Fund

Invesco V.I. S&P 500 Index Fund’s investment objective is to provide investment results that, before expenses, correspond to the total return (i.e., the combination of capital changes and income) of the Standard & Poor’s^® 500 Composite Stock Price Index.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

A principal risk of investing in the Fund is associated with its common stock investments. In general, stock values fluctuate in response to activities specific to the company as well as general market, economic and political conditions. Stock prices can fluctuate widely in response to these factors.

     The Fund is operated as a passively managed index fund. As such, the adverse performance of a particular stock ordinarily will not result in the elimination of the stock from the Fund’s portfolio. The Fund will remain invested in common stocks even when stock prices are generally falling. Ordinarily, the adviser will not sell the Fund’s portfolio securities except to reflect additions or deletions of the stocks that comprise the S&P 500 Index, or as may be necessary to raise cash to pay Fund shareholders who sell Fund shares. The Fund’s ability to correlate its performance, before expenses, with the S&P 500 Index may be affected by, among other things, changes in securities markets, the manner in which the S&P 500 Index is calculated and the timing of the purchases and sales, and also depends to some extent on the size of the Fund’s portfolio, the size of cash flows into and out of the Fund and differences between how and when the Fund and the Index are valued.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     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.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. S&P 500 Index Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–98.51%
Advertising–0.16%
Interpublic Group of Cos., Inc. (The)(b)		5,307	$	56,360
Omnicom Group Inc.		3,271		149,812
				206,172
Aerospace & Defense–2.61%
Boeing Co. (The)		7,967		519,927
General Dynamics Corp.		4,102		291,078
Goodrich Corp.		1,361		119,863
Honeywell International Inc.		8,474		450,478
ITT Corp.		1,993		103,855
L-3 Communications Holdings, Inc.		1,228		86,562
Lockheed Martin Corp.		3,207		224,201
Northrop Grumman Corp.		3,171		205,417
Precision Castparts Corp.		1,548		215,497
Raytheon Co.		3,959		183,460
Rockwell Collins, Inc.		1,703		99,217
United Technologies Corp.		10,030		789,562
				3,289,117
Agricultural Products–0.17%
Archer-Daniels-Midland Co.		6,939		208,725
Air Freight & Logistics–1.09%
C.H. Robinson Worldwide, Inc.		1,802		144,502
Expeditors International of Washington, Inc.		2,306		125,908
FedEx Corp.		3,417		317,815
United Parcel Service, Inc.–Class B		10,741		779,582
				1,367,807
Airlines–0.08%
Southwest Airlines Co.		8,114		105,320
Aluminum–0.14%
Alcoa Inc.		11,094		170,737
Apparel Retail–0.46%
Abercrombie & Fitch Co.–Class A		973		56,074
Gap, Inc. (The)		4,772		105,652
Limited Brands, Inc.		2,872		88,257
Ross Stores, Inc.		1,328		83,996
TJX Cos., Inc.		4,295		190,655
Urban Outfitters, Inc.(b)		1,420		50,850
				575,484
Apparel, Accessories & Luxury Goods–0.27%
Coach, Inc.		3,219		178,043
Polo Ralph Lauren Corp.		701		77,755
VF Corp.		941		81,095
				336,893
Application Software–0.60%
Adobe Systems Inc.(b)		5,521		169,936
Autodesk, Inc.(b)		2,485		94,927
Citrix Systems, Inc.(b)		2,039		139,488
Compuware Corp.(b)		2,387		27,856
Intuit Inc.(b)		3,036		149,675
Salesforce.com, Inc.(b)		1,283		169,356
				751,238
Asset Management & Custody Banks–1.23%
Ameriprise Financial, Inc.		2,692		154,925
Bank of New York Mellon Corp. (The)		13,473		406,885
Federated Investors, Inc.–Class B		1,012		26,484
Franklin Resources, Inc.		1,580		175,712
Invesco Ltd.(c)		5,018		120,733
Janus Capital Group Inc.		2,026		26,277
Legg Mason, Inc.		1,690		61,296
Northern Trust Corp.		2,630		145,728
State Street Corp.		5,447		252,414
T. Rowe Price Group Inc.		2,785		179,744
				1,550,198
Auto Parts & Equipment–0.22%
Johnson Controls, Inc.		7,324		279,777
Automobile Manufacturers–0.54%
Ford Motor Co.(b)		40,697		683,303
Automotive Retail–0.22%
AutoNation, Inc.(b)		718		20,248
AutoZone, Inc.(b)		299		81,504
CarMax, Inc.(b)		2,469		78,712
O’Reilly Automotive, Inc.(b)		1,531		92,503
				272,967
Biotechnology–1.28%
Amgen Inc.(b)		10,262		563,384
Biogen Idec Inc.(b)		2,588		173,525
Celgene Corp.(b)		5,101		301,673
Cephalon Inc.(b)		816		50,364

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. S&P 500 Index Fund

	Shares		Value
Biotechnology–(continued)
Genzyme Corp.(b)		2,812	$	200,215
Gilead Sciences, Inc.(b)		8,818		319,564
				1,608,725
Brewers–0.07%
Molson Coors Brewing Co.–Class B		1,743		87,481
Broadcasting–0.25%
CBS Corp.–Class B		7,395		140,874
Discovery Communications, Inc.–Class A(b)		3,087		128,728
Scripps Networks Interactive Inc.–Class A		977		50,560
				320,162
Building Products–0.04%
Masco Corp.		3,882		49,146
Cable & Satellite–1.09%
Cablevision Systems Corp.–Class A		2,606		88,187
Comcast Corp.–Class A		30,307		665,845
DIRECTV–Class A(b)		9,055		361,566
Time Warner Cable Inc.		3,863		255,074
				1,370,672
Casinos & Gaming–0.11%
International Game Technology		3,259		57,652
Wynn Resorts Ltd.		830		86,187
				143,839
Coal & Consumable Fuels–0.29%
CONSOL Energy, Inc.		2,452		119,511
Massey Energy Co.		1,108		59,444
Peabody Energy Corp.		2,928		187,333
				366,288
Commercial Printing–0.03%
R. R. Donnelley & Sons Co.		2,263		39,535
Communications Equipment–2.46%
Cisco Systems, Inc.(b)		60,207		1,217,988
Corning Inc.		16,975		327,957
F5 Networks, Inc.(b)		877		114,150
Harris Corp.		1,417		64,190
JDS Uniphase Corp.(b)		2,381		34,477
Juniper Networks, Inc.(b)		5,681		209,743
Motorola Solutions, Inc.(b)		25,519		231,457
QUALCOMM, Inc.		17,571		869,589
Tellabs, Inc.		3,977		26,964
				3,096,515
Computer & Electronics Retail–0.14%
Best Buy Co., Inc.		3,550		121,730
GameStop Corp.–Class A(b)		1,624		37,157
RadioShack Corp.		1,255		23,205
				182,092
Computer Hardware–5.14%
Apple Inc.(b)		9,964		3,213,988
Dell, Inc.(b)		18,241		247,166
Hewlett-Packard Co.		24,632		1,037,007
International Business Machines Corp.		13,494		1,980,379
				6,478,540
Computer Storage & Peripherals–0.79%
EMC Corp.(b)		22,380		512,502
Lexmark International, Inc.–Class A(b)		852		29,667
NetApp, Inc.(b)		3,925		215,718
QLogic Corp.(b)		1,132		19,267
SanDisk Corp.(b)		2,572		128,240
Western Digital Corp.(b)		2,495		84,580
				989,974
Construction & Engineering–0.19%
Fluor Corp.		1,941		128,611
Jacobs Engineering Group Inc.(b)		1,387		63,594
Quanta Services, Inc.(b)		2,319		46,194
				238,399
Construction Materials–0.05%
Vulcan Materials Co.		1,415		62,769
Construction, Farm Machinery & Heavy Trucks–1.18%
Caterpillar Inc.		6,893		645,598
Cummins Inc.		2,148		236,302
Deere & Co.		4,604		382,362
PACCAR Inc.		3,961		227,441
				1,491,703
Consumer Electronics–0.03%
Harman International Industries, Inc.(b)		779		36,068
Consumer Finance–0.69%
American Express Co.		11,375		488,215
Capital One Financial Corp.		4,941		210,289
Discover Financial Services		5,879		108,938
SLM Corp.(b)		5,260		66,223
				873,665
Data Processing & Outsourced Services–1.10%
Automatic Data Processing, Inc.		5,349		247,552
Computer Sciences Corp.		1,703		84,469

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. S&P 500 Index Fund

	Shares		Value
Data Processing & Outsourced Services–(continued)
Fidelity National Information Services, Inc.		2,910	$	79,705
Fiserv, Inc.(b)		1,614		94,516
MasterCard, Inc.–Class A		1,051		235,540
Paychex, Inc.		3,496		108,061
Total System Services, Inc.		1,791		27,545
Visa Inc.–Class A		5,292		372,451
Western Union Co. (The)		7,123		132,274
				1,382,113
Department Stores–0.39%
JC Penney Co., Inc.		2,567		82,940
Kohl’s Corp.(b)		3,175		172,529
Macy’s, Inc.		4,640		117,392
Nordstrom, Inc.		1,827		77,428
Sears Holdings Corp.(b)		486		35,843
				486,132
Distillers & Vintners–0.10%
Brown-Forman Corp.–Class B		1,144		79,645
Constellation Brands, Inc.–Class A(b)		1,921		42,550
				122,195
Distributors–0.07%
Genuine Parts Co.		1,710		87,791
Diversified Banks–1.91%
Comerica, Inc.		1,916		80,932
U.S. Bancorp.		20,837		561,974
Wells Fargo & Co.		57,013		1,766,833
				2,409,739
Diversified Chemicals–0.95%
Dow Chemical Co. (The)		12,607		430,403
E. I. du Pont de Nemours and Co.		9,916		494,610
Eastman Chemical Co.		782		65,751
FMC Corp.		787		62,873
PPG Industries, Inc.		1,770		148,804
				1,202,441
Diversified Metals & Mining–0.50%
Freeport-McMoRan Copper & Gold Inc.		5,114		614,140
Titanium Metals Corp.(b)		1,008		17,318
				631,458
Diversified REIT’s–0.12%
Vornado Realty Trust		1,765		147,077
Diversified Support Services–0.07%
Cintas Corp.		1,367		38,221
Iron Mountain Inc.		2,199		54,997
				93,218
Drug Retail–0.72%
CVS Caremark Corp.		14,759		513,170
Walgreen Co.		10,055		391,743
				904,913
Education Services–0.07%
Apollo Group, Inc.–Class A(b)		1,380		54,496
DeVry, Inc.		676		32,435
				86,931
Electric Utilities–1.74%
Allegheny Energy, Inc.		1,824		44,214
American Electric Power Co., Inc.		5,191		186,772
Duke Energy Corp.		14,387		256,232
Edison International		3,538		136,567
Entergy Corp.		1,964		139,110
Exelon Corp.		7,183		299,100
FirstEnergy Corp.		3,310		122,536
NextEra Energy, Inc.		4,516		234,787
Northeast Utilities		1,943		61,943
Pepco Holdings, Inc.		2,466		45,004
Pinnacle West Capital Corp.		1,180		48,911
PPL Corp.		5,208		137,075
Progress Energy, Inc.		3,181		138,310
Southern Co.		9,109		348,237
				2,198,798
Electrical Components & Equipment–0.52%
Emerson Electric Co.		8,175		467,365
Rockwell Automation, Inc.		1,539		110,362
Roper Industries, Inc.		1,038		79,334
				657,061
Electronic Components–0.08%
Amphenol Corp.–Class A		1,917		101,179
Electronic Equipment & Instruments–0.04%
FLIR Systems, Inc.(b)		1,730		51,467
Electronic Manufacturing Services–0.06%
Jabil Circuit, Inc.		2,113		42,450
Molex Inc.		1,520		34,535
				76,985

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. S&P 500 Index Fund

	Shares		Value
Environmental & Facilities Services–0.29%
Republic Services, Inc.		3,338	$	99,672
Stericycle, Inc.(b)		940		76,065
Waste Management, Inc.		5,148		189,807
				365,544
Fertilizers & Agricultural Chemicals–0.40%
CF Industries Holdings, Inc.		771		104,201
Monsanto Co.		5,825		405,653
				509,854
Food Distributors–0.15%
Sysco Corp.		6,354		186,808
Food Retail–0.28%
Kroger Co. (The)		6,926		154,865
Safeway Inc.		4,019		90,387
SUPERVALU Inc.		2,334		22,477
Whole Foods Market, Inc.(b)		1,612		81,551
				349,280
Footwear–0.28%
NIKE, Inc.–Class B		4,152		354,664
Gas Utilities–0.07%
Nicor Inc.		509		25,409
ONEOK, Inc.		1,155		64,068
				89,477
General Merchandise Stores–0.44%
Big Lots, Inc.(b)		862		26,256
Family Dollar Stores, Inc.		1,387		68,948
Target Corp.		7,690		462,400
				557,604
Gold–0.26%
Newmont Mining Corp.		5,347		328,466
Health Care Distributors–0.38%
AmerisourceBergen Corp.		2,976		101,541
Cardinal Health, Inc.		3,790		145,195
McKesson Corp.		2,748		193,404
Patterson Cos. Inc.		1,062		32,529
				472,669
Health Care Equipment–1.52%
Baxter International Inc.		6,329		320,374
Becton, Dickinson and Co.		2,497		211,046
Boston Scientific Corp.(b)		16,510		124,981
C.R. Bard, Inc.		1,008		92,504
CareFusion Corp.(b)		2,436		62,605
Intuitive Surgical, Inc.(b)		425		109,544
Medtronic, Inc.		11,729		435,029
St. Jude Medical, Inc.(b)		3,723		159,158
Stryker Corp.		3,709		199,173
Varian Medical Systems, Inc.(b)		1,291		89,441
Zimmer Holdings, Inc.(b)		2,144		115,090
				1,918,945
Health Care Facilities–0.03%
Tenet Healthcare Corp.(b)		5,236		35,029
Health Care Services–0.67%
DaVita, Inc.(b)		1,072		74,493
Express Scripts, Inc.(b)		5,724		309,382
Laboratory Corp. of America Holdings(b)		1,103		96,976
Medco Health Solutions, Inc.(b)		4,590		281,229
Quest Diagnostics Inc.		1,535		82,844
				844,924
Health Care Supplies–0.04%
DENTSPLY International Inc.		1,575		53,818
Health Care Technology–0.06%
Cerner Corp.(b)		782		74,087
Home Entertainment Software–0.05%
Electronic Arts Inc.(b)		3,604		59,034
Home Furnishings–0.03%
Leggett & Platt, Inc.		1,568		35,688
Home Improvement Retail–0.79%
Home Depot, Inc. (The)		17,800		624,068
Lowe’s Cos., Inc.		14,990		375,949
				1,000,017
Homebuilding–0.08%
D.R. Horton, Inc.		3,004		35,838
Lennar Corp.–Class A		1,692		31,725
PulteGroup, Inc.(b)		3,643		27,395
				94,958
Homefurnishing Retail–0.11%
Bed Bath & Beyond Inc.(b)		2,814		138,308
Hotels, Resorts & Cruise Lines–0.42%
Carnival Corp.		4,659		214,826
Marriott International Inc.–Class A		3,125		129,812
Starwood Hotels & Resorts Worldwide, Inc.		2,070		125,815
Wyndham Worldwide Corp.		1,904		57,044
				527,497

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. S&P 500 Index Fund

	Shares		Value
Household Appliances–0.15%
Stanley Black & Decker, Inc.		1,801	$	120,433
Whirlpool Corp.		839		74,528
				194,961
Household Products–2.18%
Clorox Co.		1,532		96,945
Colgate-Palmolive Co.		5,234		420,656
Kimberly-Clark Corp.		4,417		278,448
Procter & Gamble Co. (The)		30,405		1,955,954
				2,752,003
Housewares & Specialties–0.12%
Fortune Brands, Inc.		1,656		99,774
Newell Rubbermaid, Inc.		3,107		56,485
				156,259
Human Resource & Employment Services–0.06%
Monster Worldwide, Inc.(b)		1,405		33,200
Robert Half International, Inc.		1,591		48,685
				81,885
Hypermarkets & Super Centers–1.18%
Costco Wholesale Corp.		4,696		339,098
Wal-Mart Stores, Inc.		21,279		1,147,577
				1,486,675
Independent Power Producers & Energy Traders–0.16%
AES Corp. (The)(b)		7,190		87,574
Constellation Energy Group Inc.		2,204		67,509
NRG Energy, Inc.(b)		2,648		51,742
				206,825
Industrial Conglomerates–2.44%
3M Co.		7,764		670,033
General Electric Co.(d)		115,735		2,116,793
Textron Inc.		2,963		70,045
Tyco International Ltd.		5,315		220,254
				3,077,125
Industrial Gases–0.46%
Air Products & Chemicals, Inc.		2,326		211,550
Airgas, Inc.		821		51,279
Praxair, Inc.		3,327		317,629
				580,458
Industrial Machinery–1.07%
Danaher Corp.		5,804		273,775
Dover Corp.		2,028		118,537
Eaton Corp.		1,827		185,459
Flowserve Corp.		616		73,439
Illinois Tool Works Inc.		5,380		287,292
Ingersoll-Rand PLC (Ireland)		3,519		165,710
Pall Corp.		1,272		63,066
Parker Hannifin Corp.		1,751		151,111
Snap-On, Inc.		630		35,645
				1,354,034
Industrial REIT’s–0.07%
ProLogis		6,180		89,239
Insurance Brokers–0.26%
Aon Corp.		3,583		164,854
Marsh & McLennan Cos., Inc.		5,902		161,360
				326,214
Integrated Oil & Gas–6.86%
Chevron Corp.		21,858		1,994,543
ConocoPhillips		15,958		1,086,740
Exxon Mobil Corp.		54,773		4,005,002
Hess Corp.		3,258		249,367
Marathon Oil Corp.		7,710		285,501
Murphy Oil Corp.		2,088		155,660
Occidental Petroleum Corp.		8,826		865,831
				8,642,644
Integrated Telecommunication Services–2.74%
AT&T Inc.		64,196		1,886,078
CenturyLink, Inc.		3,293		152,038
Frontier Communications Corp.		10,794		105,026
Qwest Communications International Inc.		18,929		144,050
Verizon Communications, Inc.		30,705		1,098,625
Windstream Corp.		5,232		72,934
				3,458,751
Internet Retail–0.83%
Amazon.com, Inc.(b)		3,851		693,180
Expedia, Inc.		2,230		55,951
Netflix Inc.(b)		470		82,579
Priceline.com Inc.(b)		532		212,560
				1,044,270
Internet Software & Services–1.86%
Akamai Technologies, Inc.(b)		2,004		94,288
eBay, Inc.(b)		12,461		346,790
Google Inc.–Class A(b)		2,708		1,608,471
VeriSign, Inc.		1,867		60,995
Yahoo! Inc.(b)		14,158		235,447
				2,345,991

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. S&P 500 Index Fund

	Shares		Value
Investment Banking & Brokerage–1.27%
Charles Schwab Corp. (The)		10,771	$	184,292
E*TRADE Financial Corp.(b)		2,164		34,624
Goldman Sachs Group, Inc. (The)		5,552		933,624
Morgan Stanley		16,432		447,115
				1,599,655
IT Consulting & Other Services–0.29%
Cognizant Technology Solutions Corp.–Class A(b)		3,296		241,564
SAIC, Inc.(b)		3,189		50,578
Teradata Corp.(b)		1,846		75,981
				368,123
Leisure Products–0.14%
Hasbro, Inc.		1,504		70,959
Mattel, Inc.		3,936		100,092
				171,051
Life & Health Insurance–1.09%
Aflac, Inc.		5,119		288,865
Lincoln National Corp.		3,414		94,943
MetLife, Inc.		9,844		437,468
Principal Financial Group, Inc.		3,479		113,276
Prudential Financial, Inc.		5,263		308,991
Torchmark Corp.		868		51,854
Unum Group		3,467		83,971
				1,379,368
Life Sciences Tools & Services–0.49%
Agilent Technologies, Inc.(b)		3,755		155,570
Life Technologies Corp.(b)		2,027		112,498
PerkinElmer, Inc.		1,307		33,747
Thermo Fisher Scientific, Inc.(b)		4,317		238,989
Waters Corp.(b)		991		77,011
				617,815
Managed Health Care–0.84%
Aetna Inc.		4,321		131,834
CIGNA Corp.		2,942		107,854
Coventry Health Care, Inc.(b)		1,566		41,342
Humana Inc.(b)		1,827		100,010
UnitedHealth Group, Inc.		11,947		431,406
WellPoint Inc.(b)		4,275		243,076
				1,055,522
Metal & Glass Containers–0.10%
Ball Corp.		975		66,349
Owens-Illinois, Inc.(b)		1,769		54,308
				120,657
Motorcycle Manufacturers–0.07%
Harley-Davidson, Inc.		2,557		88,651
Movies & Entertainment–1.41%
News Corp.–Class A		24,805		361,161
Time Warner, Inc.		12,048		387,584
Viacom Inc.–Class B		6,565		260,039
Walt Disney Co. (The)		20,568		771,506
				1,780,290
Multi-Line Insurance–0.37%
American International Group, Inc.(b)		1,520		87,582
Assurant, Inc.		1,156		44,529
Genworth Financial Inc.–Class A(b)		5,299		69,629
Hartford Financial Services Group, Inc.		4,785		126,755
Loews Corp.		3,407		132,566
				461,061
Multi-Sector Holdings–0.05%
Leucadia National Corp.		2,166		63,204
Multi-Utilities–1.27%
Ameren Corp.		2,646		74,591
CenterPoint Energy, Inc.		4,554		71,589
CMS Energy Corp.		2,699		50,201
Consolidated Edison, Inc.		3,155		156,393
Dominion Resources, Inc.		6,301		269,179
DTE Energy Co.		1,862		84,386
Integrys Energy Group Inc.		851		41,282
NiSource Inc.		3,012		53,072
PG&E Corp.		4,258		203,703
Public Service Enterprise Group Inc.		5,483		174,414
SCANA Corp.		1,229		49,897
Sempra Energy		2,607		136,815
TECO Energy, Inc.		2,354		41,901
Wisconsin Energy Corp.		1,289		75,871
Xcel Energy, Inc.		4,957		116,737
				1,600,031
Office Electronics–0.14%
Xerox Corp.		15,068		173,583
Office REIT’s–0.10%
Boston Properties, Inc.		1,521		130,958
Office Services & Supplies–0.08%
Avery Dennison Corp.		1,192		50,469
Pitney Bowes Inc.		2,177		52,640
				103,109

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. S&P 500 Index Fund

	Shares		Value
Oil & Gas Drilling–0.18%
Diamond Offshore Drilling, Inc.		754	$	50,420
Helmerich & Payne, Inc.		1,167		56,576
Nabors Industries Ltd.(b)		3,106		72,867
Rowan Cos., Inc.(b)		1,370		47,827
				227,690
Oil & Gas Equipment & Services–1.95%
Baker Hughes Inc.		4,684		267,784
Cameron International Corp.(b)		2,634		133,623
FMC Technologies, Inc.(b)		1,299		115,494
Halliburton Co.		9,879		403,360
National Oilwell Varco Inc.		4,558		306,525
Schlumberger Ltd.		14,820		1,237,470
				2,464,256
Oil & Gas Exploration & Production–2.05%
Anadarko Petroleum Corp.		5,382		409,893
Apache Corp.		4,151		494,924
Cabot Oil & Gas Corp.		1,148		43,452
Chesapeake Energy Corp.		7,102		184,013
Denbury Resources Inc.(b)		4,367		83,366
Devon Energy Corp.		4,691		368,290
EOG Resources, Inc.		2,758		252,109
EQT Corp.		1,645		73,762
Newfield Exploration Co.(b)		1,453		104,776
Noble Energy, Inc.		1,901		163,638
Pioneer Natural Resources Co.		1,260		109,393
QEP Resources Inc.		1,932		70,151
Range Resources Corp.		1,765		79,390
Southwestern Energy Co.(b)		3,766		140,961
				2,578,118
Oil & Gas Refining & Marketing–0.18%
Sunoco, Inc.		1,309		52,766
Tesoro Corp.(b)		1,587		29,423
Valero Energy Corp.		6,128		141,679
				223,868
Oil & Gas Storage & Transportation–0.35%
El Paso Corp.		7,648		105,236
Spectra Energy Corp.		7,040		175,930
Williams Cos., Inc. (The)		6,351		156,997
				438,163
Other Diversified Financial Services–3.77%
Bank of America Corp.		109,548		1,461,370
Citigroup, Inc.(b)		315,554		1,492,571
JPMorgan Chase & Co.		42,462		1,801,238
				4,755,179
Packaged Foods & Meats–1.54%
Campbell Soup Co.		2,117		73,566
ConAgra Foods, Inc.		4,817		108,768
Dean Foods Co.(b)		1,972		17,432
General Mills, Inc.		6,954		247,493
H.J. Heinz Co.		3,483		172,269
Hershey Co. (The)		1,704		80,344
Hormel Foods Corp.		763		39,111
JM Smucker Co. (The)		1,297		85,148
Kellogg Co.		2,759		140,930
Kraft Foods, Inc.–Class A		18,973		597,839
McCormick & Co., Inc.		1,470		68,399
Mead Johnson Nutrition Co.		2,221		138,257
Sara Lee Corp.		6,943		121,572
Tyson Foods, Inc.–Class A		3,244		55,862
				1,946,990
Paper Packaging–0.07%
Bemis Co., Inc.		1,203		39,290
Sealed Air Corp.		1,704		43,367
				82,657
Paper Products–0.14%
International Paper Co.		4,751		129,417
MeadWestvaco Corp.		1,840		48,135
				177,552
Personal Products–0.19%
Avon Products, Inc.		4,661		135,449
Estee Lauder Cos. Inc. (The)–Class A		1,232		99,422
				234,871
Pharmaceuticals–5.44%
Abbott Laboratories		16,790		804,409
Allergan, Inc.		3,339		229,289
Bristol-Myers Squibb Co.		18,592		492,316
Eli Lilly and Co.		11,021		386,176
Forest Laboratories, Inc.(b)		3,102		99,202
Hospira, Inc.(b)		1,814		101,022
Johnson & Johnson		29,830		1,844,985
Merck & Co., Inc.		33,465		1,206,079
Mylan Inc.(b)		4,762		100,621

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. S&P 500 Index Fund

	Shares		Value
Pharmaceuticals–(continued)
Pfizer, Inc.		87,006	$	1,523,475
Watson Pharmaceuticals, Inc.(b)		1,377		71,122
				6,858,696
Property & Casualty Insurance–2.12%
ACE Ltd. (Switzerland)		3,686		229,453
Allstate Corp. (The)		5,811		185,255
Berkshire Hathaway Inc.–Class B(b)		18,796		1,505,748
Chubb Corp.		3,311		197,468
Cincinnati Financial Corp.		1,795		56,884
Progressive Corp. (The)		7,206		143,183
Travelers Cos., Inc. (The)		4,972		276,990
XL Group PLC (Ireland)		3,466		75,628
				2,670,609
Publishing–0.16%
Gannett Co., Inc.		2,644		39,898
McGraw-Hill Cos., Inc. (The)		3,334		121,391
Meredith Corp.		410		14,207
Washington Post Co. (The)–Class B		61		26,809
				202,305
Railroads–0.80%
CSX Corp.		4,064		262,575
Norfolk Southern Corp.		3,946		247,888
Union Pacific Corp.		5,348		495,545
				1,006,008
Real Estate Services–0.05%
CB Richard Ellis Group, Inc.–Class A(b)		3,204		65,618
Regional Banks–1.04%
BB&T Corp.		7,535		198,095
Fifth Third Bancorp		8,649		126,967
First Horizon National Corp.(b)		2,834		33,380
Huntington Bancshares Inc.		9,375		64,406
KeyCorp		9,563		84,633
M&T Bank Corp.		1,295		112,730
Marshall & Ilsley Corp.		5,688		39,361
PNC Financial Services Group, Inc.		5,692		345,618
Regions Financial Corp.		13,643		95,501
SunTrust Banks, Inc.		5,429		160,210
Zions Bancorp.		1,967		47,660
				1,308,561
Research & Consulting Services–0.07%
Dun & Bradstreet Corp.		540		44,328
Equifax Inc.		1,363		48,523
				92,851
Residential REIT’s–0.24%
Apartment Investment & Management Co.–Class A		1,295		33,463
AvalonBay Communities, Inc.		925		104,109
Equity Residential		3,089		160,473
				298,045
Restaurants–1.16%
Darden Restaurants, Inc.		1,502		69,753
McDonald’s Corp.		11,475		880,821
Starbucks Corp.		8,049		258,614
Yum! Brands, Inc.		5,089		249,616
				1,458,804
Retail REIT’s–0.31%
Kimco Realty Corp.		4,443		80,152
Simon Property Group, Inc.		3,181		316,477
				396,629
Semiconductor Equipment–0.29%
Applied Materials, Inc.		14,512		203,894
KLA-Tencor Corp.		1,846		71,329
MEMC Electronic Materials, Inc.(b)		2,516		28,330
Novellus Systems, Inc.(b)		996		32,191
Teradyne, Inc.(b)		1,952		27,406
				363,150
Semiconductors–2.19%
Advanced Micro Devices, Inc.(b)		6,219		50,871
Altera Corp.		3,394		120,759
Analog Devices, Inc.		3,243		122,164
Broadcom Corp.–Class A		4,946		215,398
First Solar, Inc.(b)		585		76,132
Intel Corp.		60,590		1,274,208
Linear Technology Corp.		2,477		85,679
LSI Corp.(b)		6,696		40,109
Microchip Technology Inc.		2,051		70,165
Micron Technology, Inc.(b)		9,306		74,634
National Semiconductor Corp.		2,552		35,116
NVIDIA Corp.(b)		6,310		97,174
Texas Instruments Inc.		12,753		414,472
Xilinx, Inc.		2,848		82,535
				2,759,416

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. S&P 500 Index Fund

	Shares		Value
Soft Drinks–2.35%
Coca-Cola Co. (The)		25,222	$	1,658,851
Coca-Cola Enterprises, Inc.		3,679		92,085
Dr Pepper Snapple Group, Inc.		2,466		86,704
PepsiCo, Inc.		17,214		1,124,591
				2,962,231
Specialized Consumer Services–0.03%
H&R Block, Inc.		3,319		39,529
Specialized Finance–0.41%
CME Group Inc.		727		233,912
IntercontinentalExchange Inc.(b)		793		94,486
Moody’s Corp.		2,249		59,689
NASDAQ OMX Group, Inc. (The)(b)		1,640		38,884
NYSE Euronext		2,875		86,193
				513,164
Specialized REIT’s–0.61%
HCP, Inc.		3,925		144,401
Health Care REIT, Inc.		1,603		76,367
Host Hotels & Resorts Inc.		7,233		129,254
Plum Creek Timber Co., Inc.		1,754		65,687
Public Storage		1,516		153,753
Ventas, Inc.		1,705		89,478
Weyerhaeuser Co.		5,809		109,964
				768,904
Specialty Chemicals–0.27%
Ecolab Inc.		2,521		127,109
International Flavors & Fragrances Inc.		880		48,919
Sherwin-Williams Co. (The)		972		81,405
Sigma-Aldrich Corp.		1,316		87,593
				345,026
Specialty Stores–0.21%
Staples, Inc.		7,855		178,858
Tiffany & Co.		1,372		85,435
				264,293
Steel–0.35%
AK Steel Holding Corp.		1,212		19,840
Allegheny Technologies, Inc.		1,070		59,042
Cliffs Natural Resources Inc.		1,470		114,675
Nucor Corp.		3,429		150,259
United States Steel Corp.		1,559		91,077
				434,893
Systems Software–3.27%
BMC Software, Inc.(b)		1,929		90,933
CA, Inc.		4,142		101,230
McAfee Inc.(b)		1,678		77,708
Microsoft Corp.		81,781		2,283,326
Novell, Inc.(b)		3,776		22,354
Oracle Corp.		42,047		1,316,071
Red Hat, Inc.(b)		2,084		95,135
Symantec Corp.(b)		8,431		141,135
				4,127,892
Thrifts & Mortgage Finance–0.10%
Hudson City Bancorp, Inc.		5,708		72,720
People’s United Financial Inc.		3,961		55,494
				128,214
Tires & Rubber–0.02%
Goodyear Tire & Rubber Co. (The)(b)		2,600		30,810
Tobacco–1.56%
Altria Group, Inc.		22,678		558,332
Lorillard, Inc.		1,624		133,266
Philip Morris International Inc.		19,708		1,153,509
Reynolds American Inc.		3,673		119,813
				1,964,920
Trading Companies & Distributors–0.15%
Fastenal Co.		1,600		95,856
W.W. Grainger, Inc.		629		86,871
				182,727
Trucking–0.02%
Ryder System, Inc.		571		30,057
Wireless Telecommunication Services–0.31%
American Tower Corp.–Class A(b)		4,326		223,395
MetroPCS Communications, Inc.(b)		2,820		35,617
Sprint Nextel Corp.(b)		32,445		137,242
				396,254
TOTAL INVESTMENTS–98.51% (Cost $82,199,939)				124,178,842
OTHER ASSETS LESS LIABILITIES–1.49%				1,879,043
NET ASSETS–100.00%			$	126,057,885

Investment Abbreviations:

REIT – Real Estate Investment Trust

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. S&P 500 Index Fund

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	Affiliated company. The Fund’s Adviser is a subsidiary of Invesco Ltd. and therefore, Invesco Ltd. is considered to be affiliated with the Fund. See Note 4.
(d)	All or portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1I and Note 5.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. S&P 500 Index Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $82,072,312)	$	124,058,109
Investments in affiliates, at value (Cost $127,627)		120,733
Total Investments, at value (Cost $82,199,939)		124,178,842
Receivable for:
Investments sold		2,115,469
Dividends		148,589
Fund expenses absorbed		7,373
Investment for trustee deferred compensation and retirement plans		1,194
Total assets		126,451,467
Liabilities:
Payable for:
Investments purchased		15,019
Fund shares reacquired		6,402
Amount due custodian		91,736
Variation margin		1,998
Accrued fees to affiliates		230,596
Accrued other operating expenses		41,079
Trustee deferred compensation and retirement plans		6,752
Total liabilities		393,582
Net assets applicable to shares outstanding	$	126,057,885
Net assets consist of:
Shares of beneficial interest	$	107,629,539
Undistributed net investment income		2,009,166
Undistributed net realized gain (loss)		(25,573,105	)
Unrealized appreciation		41,992,285
	$	126,057,885
Net Assets:
Series I	$	37,651,104
Series II	$	88,406,781
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		3,297,518
Series II		7,789,613
Series I:
Net asset value per share	$	11.42
Series II:
Net asset value per share	$	11.35

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends	$	2,560,732
Dividends from affiliates		2,443
Total investment income		2,563,175
Expenses:
Advisory fees		148,710
Administrative services fees		248,054
Custodian fees		19,140
Distribution fees — Series II		216,536
Transfer agent fees		1,810
Trustees’ and officers’ fees and benefits		17,212
Reports to shareholders		37,096
Other		52,487
Total expenses		741,045
Less: Fees waived and expenses reimbursed		(173,858	)
Net expenses		567,187
Net investment income		1,995,988
Realized and unrealized gain from:
Net realized gain from:
Investment securities		584,580
Futures contracts		216,173
		800,753
Change in net unrealized appreciation (depreciation) of:
Investment securities		14,027,032
Futures contracts		(6,862	)
		14,020,170
Net realized and unrealized gain		14,820,923
Net increase in net assets resulting from operations	$	16,816,911

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. S&P 500 Index Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	1,995,988		$	2,206,337
Net realized gain (loss)		800,753			(1,087,362	)
Change in net unrealized appreciation		14,020,170			26,688,201
Net increase in net assets resulting from operations		16,816,911			27,807,176
Distributions to shareholders from net investment income:
Series I		(728,755	)		(976,649	)
Series II		(1,463,002	)		(2,074,490	)
Total distributions from net investment income		(2,191,757	)		(3,051,139	)
Share transactions–net:
Series I		(5,557,429	)		(2,195,479	)
Series II		(13,397,694	)		(6,088,957	)
Net increase (decrease) in net assets resulting from share transactions		(18,955,123	)		(8,284,436	)
Net increase (decrease) in net assets		(4,329,969	)		16,471,601
Net assets:
Beginning of year		130,387,854			113,916,253
End of year (includes undistributed net investment income of $2,009,166 and $2,208,382, respectively)	$	126,057,885		$	130,387,854

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco V.I. S&P 500 Index Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as Morgan Stanley Variable Investment S&P 500 Index Portfolio (the “Acquired Fund”), an investment portfolio of Morgan Stanley Variable Investment Series. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”). Upon closing of the Reorganization, holders of the Acquired Fund’s Class X and Y shares received Series I and II shares, respectively, of the Fund. Information for the Acquired Fund’s Class X and Y shares prior to the Reorganization is included with Series I and II shares, respectively, of the Fund throughout this report.

  The Fund’s investment objective is to provide investment results that, before expenses, correspond to the total return (i.e., the combination of capital changes and income) of the Standard & Poor’s 500^® Composite Stock Price Index.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an

Invesco V.I. S&P 500 Index Fund

	independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to

Invesco V.I. S&P 500 Index Fund

	federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities.
J.	Collateral — To the extent the Fund has pledged or segregated a security as collateral and that security is subsequently sold, it is the Fund’s practice to replace such collateral no later than the next business day.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $2 billion		0	.12%
Over $2 billion		0	.10%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee of $64,290 to Morgan Stanley Investment Advisors Inc. (“MSIA”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed 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 Series I shares to 0.28% and Series II shares to 0.53% of average daily net assets, through at least June 30, 2012. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waivers and/or expense reimbursements to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2012, 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.

Invesco V.I. S&P 500 Index Fund

  Prior to the Reorganization, investment advisory fees paid by the Acquired Fund were reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Funds-Money Market Portfolio-Institutional Class shares.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $148,399 and reimbursed expenses of $25,148 and MSIA waived advisory fees of $311.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $29,315 for accounting and fund administrative services and reimbursed $175,879 for services provided by insurance companies. Prior to the Reorganization, the Acquired Fund paid an administration fee of $42,860 to Morgan Stanley Services Company, Inc.

  Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian, fund accountant and provides certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. Prior to the Reorganization, the Acquired Fund paid $207 to Morgan Stanley Trust, which served as the Acquired Fund’s transfer agent. For the year ended December 31, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. Prior to the Reorganization, the Acquired Fund paid distribution fees of $93,622 to Morgan Stanley Distributors Inc. based on the annual rate of 0.25% of the Acquired Fund’s average daily net assets of Class Y shares. For the year ended December 31, 2010, expenses incurred under the Plans are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	124,178,842	$	—	$	—	$	124,178,842
Futures*		13,382		—		—		13,382
Total Investments	$	124,192,224	$	—	$	—	$	124,192,224

*  Unrealized appreciation .

NOTE 4—Investment in Affiliate

The Fund’s Adviser is a Subsidiary of Invesco Ltd. and therefore, Invesco Ltd. is considered to be affiliated with the Fund. The following is a summary of the transactions in and earnings from investments in Invesco Ltd. for the year ended December 31, 2010.

Invesco V.I. S&P 500 Index Fund

								Change in
	Value		Purchases		Proceeds			Unrealized		Realized			Value		Dividend
	December 31, 2009		at Cost		from Sales			Appreciation		Gain (Loss)			December 31, 2010		Income
Invesco Ltd.	$	127,692	$	4,858	$	(14,020	)	$	5,353	$	(3,150	)	$	120,733	$	2,325

NOTE 5—Derivative Investments

The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Value of Derivative Instruments at Period-End

The Table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2010:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Interest rate risk
Futures contracts(a)	$	13,382	$	—

^(a) Includes cumulative appreciation of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets & Liabilities.

Effect of Derivative Instruments for the year ended December 31, 2010

  The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on
	Statement of Operations
	Futures*
Realized Gain
Interest rate risk	$	216,173
Change in Unrealized Appreciation (Depreciation)
Interest rate risk		(6,862	)
Total	$	209,311

*  The average value of futures outstanding during the period was $1,726,542.

Open Futures Contracts
	Number of		Month/				Unrealized
Contract	Contracts		Commitment		Value		Appreciation
S&P 500 E-Mini		34		March-2011/Long	$	2,131,300	$	13,382

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  For the period June 1, 2010 to December 31, 2010, the Fund paid legal fees of $662 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 7—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

Invesco V.I. S&P 500 Index Fund

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	2,191,757	$	3,051,139

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	1,996,976
Net unrealized appreciation — investments		36,444,242
Temporary book/tax differences		(6,098	)
Capital loss carryforward		(20,006,774	)
Shares of beneficial interest		107,629,539
Total net assets	$	126,057,885

  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 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 utilized $972,761 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2012	$	3,449,848
December 31, 2013		9,726,077
December 31, 2014		5,449,556
December 31, 2017		1,381,293
Total capital loss carryforward	$	20,006,774

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $7,140,853 and $26,712,228, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	44,286,000
Aggregate unrealized (depreciation) of investment securities		(7,841,758	)
Net unrealized appreciation of investment securities	$	36,444,242
Cost of investments for tax purposes is $87,734,600.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforward, on December 31, 2010, undistributed net investment income was decreased by $3,447, undistributed net realized gain (loss) was increased by $8,199,562 and shares of beneficial interest decreased by $8,196,115. This reclassification had no effect on the net assets of the Fund.

Invesco V.I. S&P 500 Index Fund

NOTE 11—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		114,148		$	1,178,964			227,397		$	1,896,482
Series II		141,688			1,423,360			584,015			5,084,799
Issued as reinvestment of dividends:
Series I		73,537			728,755			117,952			976,649
Series II		148,378			1,463,002			251,759			2,074,490
Reacquired:
Series I		(723,269	)		(7,465,148	)		(600,690	)		(5,068,610	)
Series II		(1,577,214	)		(16,284,056	)		(1,515,796	)		(13,248,246	)
Net increase (decrease) in share activity		(1,822,732	)	$	(18,955,123	)		(935,363	)	$	(8,284,436	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 95% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or advisor, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. S&P 500 Index Fund

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																					Ratio of			Ratio of
																					expenses			expenses
					Net gains																to average			to average net			Ratio of net
	Net asset				on securities						Dividends										net assets			assets without			investment
	value,		Net		(both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(e)
Series I
Year ended 12/31/10	$	10.14	$	0.19	$	1.29		$	1.48		$	(0.20	)	$	11.42		14.87	%	$	37,651		0.28	%(c)		0.42	%(c)		1.79	%(c)		6	%
Year ended 12/31/09		8.27		0.18		1.94			2.12			(0.25	)		10.14		26.34			38,873		0.28	(d)		0.28	(d)		2.09	(d)		5
Year ended 12/31/08		13.46		0.23		(5.14	)		(4.91	)		(0.28	)		8.27		(37.07	)		33,801		0.30	(d)		0.30	(d)		2.01	(d)		14
Year ended 12/31/07		13.02		0.23		0.45			0.68			(0.24	)		13.46		5.23			66,275		0.27			0.27			1.71			3
Year ended 12/31/06		11.46		0.20		1.56			1.76			(0.20	)		13.02		15.56			84,545		0.28			0.28			1.67			4
Series II
Year ended 12/31/10		10.08		0.16		1.28			1.44			(0.17	)		11.35		14.58			88,407		0.53	(c)		0.67	(c)		1.54	(c)		6
Year ended 12/31/09		8.21		0.16		1.93			2.09			(0.22	)		10.08		26.06			91,515		0.53	(d)		0.53	(d)		1.84	(d)		5
Year ended 12/31/08		13.36		0.20		(5.11	)		(4.91	)		(0.24	)		8.21		(37.27	)		80,115		0.55	(d)		0.55	(d)		1.76	(d)		14
Year ended 12/31/07		12.92		0.20		0.45			0.65			(0.21	)		13.36		5.00			152,984		0.52			0.52			1.46			3
Year ended 12/31/06		11.38		0.17		1.54			1.71			(0.17	)		12.92		15.21			176,883		0.53			0.53			1.42			4

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Ratios are based on average daily net assets (000’s omitted) of $37,311 and $86,615 for Series I and Series II shares, respectively.
(d)	The ratios reflect the rebate of certain Fund expenses in connection with investments in an affiliate during the period. The effect of the rebate on the ratios is less than 0.005%
(e)	Portfolio turnover is calculated at the fund level and is not annualized for the periods less than one year, if applicable.

NOTE 13—Change in Independent Registered Public Accounting Firm (unaudited)

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Invesco V.I. S&P 500 Index Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds) and

Shareholders of Invesco V.I. S&P 500 Index Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. S&P 500 Index Fund (formerly known as S&P 500 Index Portfolio, one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, the results of its operations, the changes in its net assets and the financial highlights for the periods then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 26, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. S&P 500 Index Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,231.90	$	1.56	$	1,023.80	$	1.42		0.28	%
Series II		1,000.00		1,231.00		2.97		1,022.54		2.69		0.53

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco V.I. S&P 500 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Qualified Dividend Income*	0.00%
Corporate Dividends Received Deduction*	100%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. S&P 500 Index Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco V.I. Select Dimensions Funds

Annual Report to Shareholders § December 31, 2010

Invesco V.I. Select Dimensions Balanced Fund
Invesco V.I. Select Dimensions Dividend Growth Fund
Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

MS-VISDCOMBO-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Invesco V.I. Select Dimensions Balanced Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 10/31/94, Fund data from 11/9/94

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (11/9/94)			7.49	%
	10	Years	4.42
	5	Years	3.64
	1	Year	10.37
Series II Shares
Inception (7/24/00)			4.98	%
	10	Years	4.15
	5	Years	3.38
	1	Year	10.15

Effective June 1, 2010, Class X and Class Y shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Series I and Series II shares, respectively, of Invesco V.I. Select Dimensions Balanced Fund. Returns shown above for Series I and Series II shares are blended returns of the predecessor fund and Invesco V.I. Select Dimensions Balanced Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future

results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.82% and 1.07%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.12% and 1.37%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Select Dimensions Balanced Fund, a series portfolio of AIM Variable Insurance Funds (Invesco

Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco V.I. Select Dimensions Funds

Invesco V.I. Select Dimensions Dividend Growth Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 10/31/94, Fund data from 11/9/94

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (11/9/94)			7.47	%
	10	Years	1.38
	5	Years	0.24
	1	Year	10.67
Series II Shares
Inception (7/24/00)			2.28	%
	10	Years	1.13
	5	Years	-0.01
	1	Year	10.41

Effective June 1, 2010, Class X and Class Y shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Series I and Series II shares, respectively, of Invesco V.I. Select Dimensions Dividend Growth Fund. Returns shown above for Series I and Series II shares are blended returns of the predecessor fund and Invesco V.I. Select Dimensions Dividend Growth Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future

results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.72% and 0.97%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.95% and 1.20%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Select Dimensions Dividend Growth Fund, a series portfolio of AIM Variable Insurance Funds

(Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco V.I. Select Dimensions Funds

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 10/31/94, Fund data from 11/9/94

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (11/9/94)			10.01	%
	10	Years	5.85
	5	Years	4.42
	1	Year	21.51
Series II Shares
Inception (7/24/00)			6.37	%
	10	Years	5.59
	5	Years	4.15
	1	Year	21.19

Effective June 1, 2010, Class X and Class Y shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Series I and Series II shares, respectively, of Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund. Returns shown above for Series I and Series II shares are blended returns of the predecessor fund and Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future

results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.37% and 0.62%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.60% and 0.85%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund, a series portfolio of AIM Variable

Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco V.I. Select Dimensions Funds

Management’s Discussion of Fund Performance

Performance Summary - Invesco V.I. Select Dimensions Balanced Fund

For the year ended December 31, 2010, Invesco V.I. Select Dimensions Balanced Fund underperformed the Russell 1000 Value Index but outperformed the Barclays Capital U.S. Government/Credit Index. Because the Fund uses a bottom-up stock selection approach, stock selection in various sectors was the primary driver of the Fund’s relative performance.

     The Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	10.37	%
Series II Shares	10.15
Russell 1000 Value Index▼ (Broad Market Index)	15.51
Barclays Capital U.S. Government/Credit Index▼ (Style-Specific Index)	6.59

^▼ Lipper Inc.

How we invest

We call our investment philosophy “value with a catalyst.” We believe that undervalued companies which are experiencing positive changes (i.e., “catalysts”) have the potential to generate long-term stock price growth for shareholders. We generally seek to identify companies that are out of favor with investors, underearning relative to their potential and attractively valued. For these companies, we attempt to identify catalysts that may improve the financial results and/or correct the undervaluation. Examples of catalysts typically include improved operational efficiency, changing industry dynamics and/or a change in management.

     We initially identify potential investments through a series of quantitative screens including, but not limited to, return on capital and enterprise value to sales metrics. We then conduct fundamental research on the most attractive opportunities. The research process includes a thorough review of a company’s financial statements, an evaluation of its competitive position and stability and meetings with its executives. During the research process, we also value the company under various scenarios to determine if the investment is an attractive opportunity relative to its risks. This is also where we typically identify the

positive catalyst, a pre-requisite for potential investment. Finally, we generally set a price target for a stock based on normalized earnings and historical valuation multiples.

     In short, our objective is to exploit negative sentiment toward a company’s stock by analyzing the company’s operations in the context of a cyclical environment and identifying one or more catalysts that may improve the company’s financial performance. Improved financial performance, in turn, has the potential to drive the company’s stock price higher.

     We typically sell an investment when it reaches our estimate of fair value or when we identify a more attractive investment opportunity.

     The Fund also invests in investment grade corporate bonds and U.S. government-issued bonds. The fixed income portion of the portfolio has the potential to reduce volatility compared to an equity-only portfolio and the potential to provide some downside protection during periods of stock market volatility.

Market conditions and your Fund

Equity markets were choppy during the fiscal year as investors weighed the competing issues of solid corporate profits and soft macroeconomic data. Corporate earnings were largely positive

but often were overshadowed by concerns about high unemployment, weak consumer spending, soft housing data and the possibility of additional U.S. Federal Reserve accommodation. After rising through April, major equity indexes sold off precipitously in May as the sovereign debt crisis unfolded in the eurozone while U.S. economic indicators remained weak, prompting fears of a “double-dip” recession. Uncertainty created by the debt crisis – combined with subdued employment, consumer spending and housing data – added to concerns that the recovery was slowing. Just as abruptly, however, the markets reversed course starting in September and rallied through the end of the year on modestly better economic news.

     Major equity indexes produced positive returns for the year, and all 10 sectors of the S&P 500 Index posted gains. More economically sensitive sectors such as consumer discretionary and industrials had the highest returns, while less economically sensitive sectors such as health care had some of the lowest returns.

     The broad U.S. bond market, as measured by the Barclays Capital U.S. Aggregate Index, generated positive total returns for the 12 months ended December 31, 2010. At the beginning of the year, falling interest rates across maturities combined with tighter credit spreads (the difference between the yields of U.S. Treasuries and other types of fixed income securities that carry credit risk) caused bond prices to rise. Conversely, during the fourth quarter, a marked rise in interest rates negatively affected bond prices, particularly U.S. Treasuries.

     The Fund benefited from an overweight exposure to, and stock selection in, the consumer discretionary sector. The Fund’s overweight position in the sector was concentrated among media stocks, which benefited from an increase in advertising revenue during the reporting period. Viacom, a top Fund holding, performed well throughout the reporting

Portfolio Composition

By security type

Common Stocks & Other Equity Interests	65.3	%
U.S. Treasury Securities	17.6
Bonds & Notes	13.1
U.S. Government Sponsored
Agency Securities	1.6
Foreign Sovereign Debts	0.4
Municipal Obligations	0.1
Money Market Funds
Plus Other Assets Less Liabilities	1.9

Top 10 Equity Holdings*

1.	JPMorgan Chase & Co.	3.1	%
2.	General Electric Co.	2.5
3.	Marsh & McLennan Cos., Inc.	2.2
4.	Viacom Inc.-Class B	1.9
5.	Occidental Petroleum Corp.	1.7
6.	Anadarko Petroleum Corp.	1.6
7.	eBay Inc.	1.5
8.	American Electric Power Co., Inc.	1.4
9.	Royal Dutch Shell PLC-ADR	1.4
10.	Tyco International Ltd.	1.3

Total Net Assets	$38.2 million
Total Number of Holdings*		230

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.

Invesco V.I. Select Dimensions Funds

period. The company reduced costs, was disciplined with its capital and grew advertising revenue. Stock selection in the telecommunication services sector also aided the Fund’s performance relative to its style-specific index. Vodafone helped performance. The company owns approximately 45% of Verizon Communications. Verizon has been able to grow its subscriber base, and investors are anticipating the introduction of the iPhone onto the network.

     Stock selection in the health care sector contributed to the Fund’s relative performance. The Fund owned Genzyme, a biotechnology company that received a takeover offer from Sanofi-Aventis (not a Fund holding). As a result, Genzyme rose significantly on the news and we sold our position.

     However, offsetting the positive results was the negative impact of the information technology sector and the financial services sector.

     The Fund was overweight in technology stocks throughout the reporting period, and most of our exposure was to hardware and equipment and software services stocks. Stock selection in hardware and equipment detracted the most from relative performance. Fund holding Hewlett Packard sold off on the news its chief executive officer was leaving the company due to expense-related improprieties. At the end of the reporting period, the Fund continued to own the stock.

     Although the Fund was underweight in the financials sector relative to its style-specific index during the reporting period, we cautiously increased our exposure to some banks and capital markets companies that we believed had improved their balance sheets and were better capitalized. Also, real estate was a strong performing asset class during the reporting period. The Fund had no exposure to this asset class, however, and therefore did not benefit from real estate’s strong performance.

     The Fund’s fixed income holdings produced positive returns for the reporting period, despite a marked rise in interest rates late in the year that caused bond prices to fall. Fixed income performance was mainly due to a sustained overweight position in investment grade corporate bonds. A consistent underweight position in U.S. government securities also aided both the Fund’s absolute and relative performance as investor preference for credit risk and rising interest rates late in the year dampened returns for U.S. government bonds.

     The Fund used active duration and yield curve positioning to manage risk

and generate outperformance versus its benchmark index. U.S. Treasury futures were the main tool used in managing the portfolio’s duration. The contribution to relative performance from both duration and yield curve positioning was, overall, negligible for the year.

     Equity markets experienced a strong recovery during the period covered by this report. We believe that the market volatility that occurred during 2010 may continue to create opportunities to invest in companies with attractive valuations and strong fundamentals. We believe that ultimately those valuations and fundamentals may be reflected in those companies’ stock prices.

     As always, we would like to caution investors against making investment decisions based on short-term performance. We recommend that you consult a financial adviser to discuss your individual financial program.

     Thank you for your investment in Invesco V.I. Select Dimensions Balanced Fund and for sharing our long-term investment horizon.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Thomas Bastian

Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Select Dimensions Balanced Fund. He joined Invesco in 2010. Mr. Bastian earned a B.A. in accounting from St. John’s University and an M.B.A. in finance from the University of Michigan.

Cynthia Brien

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Select Dimensions Balanced Fund. She joined Invesco in 1996. Ms. Brien earned a B.B.A. from The University of Texas at Austin.

Chuck Burge

Portfolio manager, is manager of Invesco V.I. Select Dimensions Balanced Fund. He joined Invesco in 2002. Mr. Burge earned a B.S. in economics from Texas A&M University and an M.B.A. in finance and accounting from Rice University.

Mark Laskin

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Select Dimensions Balanced Fund. He joined Invesco in 2010. Mr. Laskin earned a B.A. in history from Swarthmore College and an M.B.A. and an M.A. from the Wharton School and the Lauder Institute, respectively, of the University of Pennsylvania.

Mary Jayne Maly

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Select Dimensions Balanced Fund. She joined Invesco in 2010. Ms. Maly earned a B.A. from the University of Pittsburgh and an M.B.A. from the American Graduate School of International Management.

Sergio Marcheli

Portfolio manager, is manager of Invesco V.I. Select Dimensions Balanced Fund. He joined Invesco in 2010.

Mr. Marcheli earned a B.B.A. from the University of Houston and an M.B.A. from the University of St. Thomas.

James Roeder

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Select Dimensions Balanced Fund. He joined Invesco in 2010. Mr. Roeder earned a B.S. in accounting from Clemson University and an M.B.A. in economics and finance from the University of Chicago Graduate School of Business. He is also a Certified Public Accountant.

Invesco V.I. Select Dimensions Funds

Management’s Discussion of Fund Performance

Performance Summary - Invesco V.I. Select Dimensions Dividend Growth Fund

Effective June 25, 2010, Meggan Walsh assumed management of Invesco V.I. Select Dimensions Dividend Growth Fund as lead portfolio manager along with portfolio manager Jonathan Harrington and a team of equity analysts. Our team has extensive industry experience and, more specifically, experience with strategies that focus on dividend-paying stocks. We appreciate the opportunity to manage your Fund.

     For the year ended December 31, 2010, Invesco V.I. Select Dimensions Dividend Growth Fund underperformed its benchmark, the S&P 500 Index. While we managed the Fund for only part of the reporting period, our comments will encompass the entire period. Investments in the industrials and consumer staples sectors were large contributors to the Fund’s returns. However, the Fund’s underperformance for the reporting period was largely due to an underweight position in the energy sector relative to its benchmark.

     The Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	10.67	%
Series II Shares	10.41
S&P 500 Index▼ (Broad Market/Style-Specific Index)	15.08

^▼ Lipper Inc.

How we invest

Our total return approach focuses on balancing long-term capital appreciation, current income and capital preservation. The Fund can serve as a conservative cornerstone within a well-diversified asset allocation strategy, complementing more aggressive and cyclical investments.

     We seek companies that we believe have normalized earnings power greater than that implied by their current market valuation and that also return capital to shareholders via dividends and share repurchases. All stocks in the portfolio pay a dividend, and the Fund pays a quarterly dividend to shareholders. We manage risk utilizing a valuation framework, careful stock selection and a rigorous buy-and-sell discipline.

     We look for dividend-paying companies with strong profitability, solid balance sheets and capital allocation policies that support sustained or increasing dividends

and share repurchases. We perform extensive fundamental research, incorporating both financial statement analysis and an assessment of the potential reward relative to the downside risk to determine a fair valuation over our two-year investment horizon for each stock. We believe our process may provide the best combination of dividend income, price appreciation and capital preservation.

     We maintain a rigorous sell discipline and consider selling or trimming a stock when it no longer meets our investment criteria, including when:

n	A stock reaches its fair valuation (target price).
n	The company’s fundamental business prospects deteriorate.
n	A more attractive investment opportunity presents itself.

Market conditions and your Fund

Equity markets delivered strong returns but were choppy during the fiscal year as investors weighed the competing issues of solid corporate profitability and soft, albeit improving, macroeconomic data. Corporate earnings improved considerably over the past year as high productivity growth and cost cutting measures made during the economic downturn led to a rebound in margins and profits. However, high unemployment, weak consumer spending and tepid housing data remained as overhangs to the recovery. The sovereign debt crisis also contributed to market volatility as European countries began implementing austerity programs. Most recently, major equity indexes reversed course and rallied again during the last four months of 2010 on better economic news, ending the year with double-digit gains.

     All 10 sectors of the S&P 500 Index posted gains for the year. More economically sensitive sectors such as consumer discretionary, industrials and materials had the highest returns, while the less economically sensitive sectors such as health care and utilities had some of the lowest returns.

     A number of Fund holdings in the industrials sector, including Caterpillar and Snap-on, were among the top contributors to performance during the reporting period. Snap-on manufactures and distributes premium professional-grade power and hand tools. The company delivered stronger-than-expected earnings due to robust revenue growth and improving profit margins, as demand for its products continued to expand. Caterpillar continued to see a rebound in machinery and engine sales, particularly driven by increased emerging-market infrastructure and commodity demand. Dealer inventories remained low despite the uptick in orders.

Portfolio Composition

By sector

Financials	20.7	%
Consumer Staples	19.1
Consumer Discretionary	12.8
Industrials	12.4
Information Technology	6.9
Energy	6.2
Health Care	6.1
Utilities	5.2
Materials	4.5
Telecommunication Services	1.0
Money Market Funds
Plus Other Assets Less Liabilities	5.1

Top 10 Equity Holdings*

1.	Kimberly-Clark Corp.	2.6	%
2.	SunTrust Banks, Inc.	2.5
3.	Automatic Data Processing, Inc.	2.2
4.	General Dynamics Corp.	2.1
5.	American Electric Power Co., Inc.	2.0
6.	Capital One Financial Corp.	2.0
7.	Snap-on, Inc.	2.0
8.	International Paper Co.	1.9
9.	Johnson & Johnson	1.9
10.	Pentair, Inc.	1.8

Total Net Assets	$90.1 million
Total Number of Holdings*		76

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.

Invesco V.I. Select Dimensions Funds

     Other strong contributors to Fund performance during the year included holdings such as Phillip Morris in the consumer staples sector and Lubrizol and DuPont in the materials sector. DuPont, a diversified chemicals company, had strong sales growth during the year, particularly in its Asian markets. Higher volumes and better pricing power in its agriculture and nutrition segment also contributed to strong results. DuPont improved its financial position by cutting costs and reducing its net debt.

     Some of the Fund’s information technology (IT) holdings detracted from results, including Google and Microsoft. Shares of Microsoft were negatively affected by a slowdown in PC demand, as well as market concerns about the company’s positioning in new product lines such as tablet PCs and smart-phones. We eliminated our position in Google before the close of the year, but continued to hold Microsoft.

     The Fund’s exposure to the health care sector also had a negative impact on absolute returns, with WellPoint and Pfizer among the top detractors. We eliminated our position in WellPoint and reduced our position in Pfizer before the close of the reporting period.

     Since taking over management of the Fund in June, we added new consumer staples holdings, such as Coca Cola and Walgreen. We also increased our exposure to the financials sector, adding a number of commercial bank holdings including SunTrust and Fifth Third Bancorp. The Fund benefited from these purchases as the companies delivered positive returns.

     At the end of the reporting period, consumer staples and financials were our largest sector overweights relative to the S&P 500 index. We decreased our exposure to the energy, health care and IT sectors. These sectors represented our largest underweight positions compared to the index.

     During the reporting period, the Fund used options contracts (a derivative security) in order to manage market risk and exposure. These positions produced a small gain for the fiscal year.

     The year witnessed a broad recovery in corporate earnings led by strong operating leverage. Balance sheets remain strong, and an increasing number of companies began deploying cash into higher levels of capital spending and increased dividends and share buyback programs. Merger and acquisition activity

and corporate debt issuance also increased. However, the unemployment rate remains high, and we are cautiously monitoring the durability of the economy’s recovery.

     We believe one of our competitive advantages is a disciplined approach to evaluating stocks from a total return perspective – focusing not only on their capital appreciation potential, but also on their current dividend income and capital preservation. We believe this approach helps create a well-diversified fund that may serve as a cornerstone allocation within an overall portfolio.

     As always, we thank you for your investment in Invesco V.I. Select Dimensions Dividend Growth Fund and for sharing our long-term horizon.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Meggan Walsh

Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Select Dimensions Dividend Growth Fund. Ms. Walsh joined Invesco in 1991. She began her investment career in 1987. Ms. Walsh earned a B.S. in finance from the University of Maryland and an M.B.A. from Loyola University Maryland.

Jonathan Harrington

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Select Dimensions Dividend Growth Fund. Mr. Harrington joined Invesco in 2001. He earned a B.A. in history and philosophy from Dartmouth College and an M.B.A. from the Kellogg Graduate School of Management at Northwestern University.

Invesco V.I. Select Dimensions Funds

Management’s Discussion of Fund Performance

Performance Summary - Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

As part of Invesco’s June 1, 2010, acquisition of Morgan Stanley’s retail asset management business, Morgan Stanley V.I. Select Dimensions Equally-Weighted S&P Portfolio was reorganized into Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund. A listing of your Fund’s managers appears later in this report.

     For the year ended December 31, 2010, Series I shares of Invesco Equally-Weighted S&P 500 Fund, excluding product issuer charges, performed in line with the S&P 500 Equal Weight Index. The Fund seeks to achieve a high level of total return on its assets through a combination of capital appreciation and current income.

     The Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	21.51	%
Series II Shares	21.19
S&P 500 Equal Weight Index▼ (Broad Market/Style-Specific Index)	21.91

^▼ Invesco, Bloomberg L.P.

How we invest

The Fund invests in a diversified portfolio of common stocks represented in the S&P 500 Index (the S&P 500). The S&P 500 is a well known stock market index that includes common stocks of 500 companies. The Fund generally invests in each stock included in the S&P 500 in approximately equal proportions. This approach differs from the S&P 500 because stocks in the S&P 500 are represented in proportion to their market value or market capitalization. For example, the 50 largest companies in the S&P 500 represent approximately 50 percent of the S&P 500’s value; however, these same 50 companies represent roughly 10 percent of the Fund’s value. The Fund may invest in foreign securities represented in the S&P 500, including depositary receipts. Sale of a security in this Fund is a function of Standard & Poor’s either adding or deleting a security from the S&P 500. Securities that are added or deleted are driven by the index, not a stock selection model.

     The Fund may also invest in S&P 500 future contracts. This type of investment is a derivative instrument since the price is derived from one or more underlying assets. The purpose of this investment is to provide full stock market exposure to the Fund’s nominal cash holdings.

Market conditions and your Fund

Equity markets were choppy during the year as investors weighed the competing issues of solid corporate profits and soft macroeconomic data. Corporate earnings were largely positive, but often overshadowed by concerns about high unemployment, a lack of consumer spending and soft housing data. After rising through April, major equity indexes sold off precipitously in May, as the sovereign debt crisis unfolded in the eurozone. Meanwhile, U.S. economic indicators remained weak, prompting fears of a “double-dip” recession. Uncertainty created by the debt crisis, combined with subdued employment, consumer spending and housing data

added to concerns that the recovery was slowing to a sub-normal growth rate. Just as abruptly, however, the markets reversed course during the last quarter of the year and rallied on modestly better economic news: tame inflation, rising industrial production and upwardly revised third quarter gross domestic product. Retail sales – arguably the most influential data point near year end – climbed 5.5% higher this holiday season.¹ U.S. equity markets ended the year with double-digit gains.

     The Fund stayed true to its process by maintaining balanced exposure to all constituents of the S&P 500. On an absolute basis, all sectors in the Fund posted positive returns for the reporting period. Sectors that contributed most to overall Fund performance were the consumer discretionary, financials, industrials and information technology sectors. In addition, the Fund’s allocation to Equally Weighted S&P 500 future contracts was a contributor to Fund performance. The telecommunication services and utilities sectors contributed the least to the Fund’s overall positive performance.

     In the consumer discretionary sector, Priceline.com was a top contributor. Priceline.com is an online travel company, which offers a range of travel services, including hotel rooms, car rentals, airline tickets, vacation packages, cruises and destination services. Internationally, the company offers customers hotel room reservations in over 90 countries and in 32 languages. In the U.S., Priceline.com offers customers the ability to purchase travel services in a price-disclosed manner or the opportunity to use its “Name Your Own Price” service, which allows customers to make offers for travel services at discounted prices.

     Also contributing to the Fund’s positive performance was information technology

Portfolio Composition

By sector

Financials	16.2	%
Consumer Discretionary	15.8
Information Technology	15.0
Industrials	11.7
Health Care	9.8
Energy	8.2
Consumer Staples	8.1
Utilities	6.7
Materials	6.2
Telecommunication Services	1.8
Money Market Funds Plus
Other Assets Less Liabilities	0.5

Top 10 Equity Holdings*

1.	Anadarko Petroleum	0.3	%
2.	Jabil Circuit, Inc.	0.3
3.	CONSOL Energy, Inc.	0.2
4.	Regions Financial Corp.	0.2
5.	Chesapeake Energy Corp.	0.2
6.	Huntington Bancshares Inc.	0.2
7.	SUPERVALU, Inc.	0.2
8.	Dean Foods Co.	0.2
9.	Valero Energy Corp.	0.2
10.	American International Group	0.2

Total Net Assets	$99.3 million
Total Number of Holdings*		500

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.

Invesco V.I. Select Dimensions Funds

and computer services company Akamai Technologies. Akamai Technologies provides services for accelerating and improving the delivery of content and applications over the Internet, ranging from live and on-demand streaming video capabilities to conventional content on websites, to tools that help people transact business and reach out to new and existing customers. The company’s solutions are designed to help companies, government agencies and other enterprises. It offers application performance services, services and solutions for digital media and software distribution and storage, content and application delivery, online advertising-related services and other specialized Internet-based offerings.

     Detracting from Fund performance were Dean Foods and H&R Block. H&R Block’s problems involve regulatory issues regarding refund anticipation loans, a large source of earnings for the company. The Office of the Comptroller of the Currency recently ordered the company’s banking partner not to be involved in these types of loans, and the company may not be able to find another partner so close to tax season.

     Forecasting the future direction of the economy remains highly challenging. The bursting of the U.S. housing bubble and continued high unemployment seemed likely to impede future economic growth, while massive fiscal and monetary stimulus seemed likely to promote economic growth.

     During the reporting period, the Fund used futures contracts (a derivative security) in order to manage market risk and exposure. These positions produced a small gain for the fiscal year.

     During the year, we were cautiously optimistic about the prospects for equities. In a world of moderate but positive economic growth, low inflation and prolonged government liquidity support, we believe equities can achieve gains. Further, valuations remain reasonable by historic standards, especially after the pullback during the second quarter of 2010.

     We welcome new investors who joined the Fund during the year, and thank all of our shareholders for your investment in Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund.

1 Bloomberg

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Anthony Munchak

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund. He joined Invesco in 2000. Mr. Munchak earned a B.S. and M.S. in finance from Boston College and an M.B.A. from Bentley College.

Glen Murphy

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund. He joined Invesco in 1995. Mr. Murphy earned a B.B.A. from the University of Massachusetts and an M.S. in finance from Boston College.

Francis Orlando

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund. He joined Invesco in 1987. Mr. Orlando earned a B.A. in business administration from Merrimack College and an M.B.A. from Boston University.

Daniel Tsai

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund. He joined Invesco in 2000. Mr. Tsai earned a B.S. in mechanical engineering from National Taiwan University and an M.S. in mechanical engineering from the University of Michigan. He also earned an M.S. in computer science from Wayne State University.

Anne Unflat

Portfolio manager, is manager of Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund. She joined Invesco in 1988. Ms. Unflat graduated magna cum laude from Queens College with a B.A. in economics. She earned an M.B.A. in finance from St. John’s University.

Invesco V.I. Select Dimensions Funds

Invesco V.I. Select Dimensions Balanced Fund’s investment objective is to provide capital growth with reasonable current income.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

Market risk is the possibility that the market values of securities owned by the Fund will decline. Investments in common stocks and other equity securities generally are affected by changes in the stock markets, which fluctuate substantially over time, sometimes suddenly and sharply. Investments in debt securities generally are affected by changes in interest rates and the creditworthiness of the issuer. The prices of such securities tend to fall as interest rates rise, and such declines tend to be greater among securities with longer maturities. The value of a convertible security tends to decline as interest rates rise and, because of the conversion feature, tends to vary with fluctuations in the market value of the underlying equity security.

     All fixed income securities are subject to two types of risk: credit risk and interest rate risk. When the general level of interest rates goes up, the prices of most fixed income securities go down. When the general level of interest rates goes down, the prices of most fixed income securities go up.

     Mortgage-backed securities are subject to prepayment risk, which includes the possibility that, as interest rates fall, securities with stated interest rates may have the principal prepaid earlier than expected, requiring the Fund to invest the proceeds at generally lower interest rates. The Fund may invest in mortgage pass-through securities that are issued of guaranteed by the U.S. government. It is possible that these issuers will not have the funds to meet their payment obligations in the future. To the extent the Fund invests in mortgage securities offered by nongovernmental issuers, such as commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers, the risks of investing in mortgage-backed securities may be enhanced.

     Because of the uncertainty of the cash flows, the market prices and yields of collateralized mortgage obligations (CMOs) are more volatile and may increase or decrease in value substantially with changes in interest rates and/or the rates of prepayment. In addition, if the

collateral securing CMOs or any third-party guarantees are insufficient to make payments, the Fund could sustain a loss.

     Asset-backed securities have risk characteristics similar to mortgage-backed securities, as well as risks that legal, regulatory and economic factors may result in the collateral backing the securities being insufficient to support payment on the securities.

     Lower rated securities may be more susceptible to real or perceived adverse economic and competitive industry conditions.

     The risks of investing in securities of foreign issuers can include fluctuations in foreign currencies, foreign currency exchange controls, political and economic instability, differences in financial reporting, differences in securities regulation and trading, and foreign taxation issues.

     Investing in real estate investment trusts (REITs) makes the Fund more susceptible to risks associated with the ownership of real estate and with the real estate industry in general and may involve duplication of management fees and other expenses. REITs may be less diversified than other pools of securities, may have lower trading volumes and may be subject to more abrupt or erratic price movements than the overall securities markets.

About indexes used in this report

The Russell 1000^® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Barclays Capital U.S. Government/Credit Index includes Treasuries and agencies that represent the government portion of the index, and includes publicly issued U.S. corporate and foreign debentures and secured notes that meet specified maturity, liquidity, and quality requirements to represent the credit interests.

     The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Barclays Capital U.S. Aggregate Index is an unmanaged index considered representative of the U.S. investment-grade, fixed-rate bond market.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     CPA^® and Certified Public Accountant^® are trademarks owned by the American Institute of Certified Public Accountants.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Select Dimensions Funds

Invesco V.I. Select Dimensions Dividend Growth Fund’s investment objective is to provide reasonable current income and long-term growth of income and capital.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

In general, stock and other equity security values fluctuate, and sometimes widely fluctuate, in response to activities specific to the company as well as general market, economic and political conditions. Investments in convertible securities subject the Fund to the risks associated with both fixed income securities, including credit risk and interest rate risk, and common stocks.

     The risks of investing in securities of foreign issuers can include fluctuations in foreign currencies, foreign currency exchange controls, political and economic instability, differences in financial reporting, differences in securities regulation and trading, and foreign taxation issues.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Select Dimensions Funds

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund’s investment objective is to achieve a high level of total return on its assets through a combination of capital appreciation and current income.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

In general, stock and other equity security values fluctuate, and sometimes widely fluctuate, in response to activities specific to the company as well as general market, economic and political conditions. Investments in convertible securities subject the Fund to the risks associated with both fixed income securities, including credit risk and interest rate risk, and common stocks.

About indexes used in this report

The S&P 500^® Equal Weight Index is the equally weighted version of the S&P 500^® Index.

     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.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco V.I. Select Dimensions Funds

Schedule of Investments^(a)

December 31, 2010

Invesco V.I. Select Dimensions Balanced Fund

	Shares		Value
Common Stocks & Other Equity Interests–65.27%
Air Freight & Logistics–0.35%
FedEx Corp.		1,439	$	133,841
Asset Management & Custody Banks–0.72%
State Street Corp.		5,937		275,121
Automobile Manufacturers–1.06%
Ford Motor Co.(b)		13,167		221,074
General Motors Co.(b)		5,015		184,853
				405,927
Cable & Satellite–2.11%
Comcast Corp.–Class A		20,902		459,217
Time Warner Cable, Inc.		5,256		347,054
				806,271
Communications Equipment–0.69%
Cisco Systems, Inc.(b)		12,991		262,808
Computer Hardware–1.82%
Dell Inc.(b)		22,500		304,875
Hewlett-Packard Co.		9,289		391,067
				695,942
Consumer Electronics–0.79%
Sony Corp.–ADR (Japan)		8,464		302,249
Data Processing & Outsourced Services–0.73%
Western Union Co.		14,924		277,139
Diversified Banks–1.10%
U.S. Bancorp		6,319		170,423
Wells Fargo & Co.		8,053		249,563
				419,986
Diversified Chemicals–1.24%
Dow Chemical Co. (The)		6,749		230,411
PPG Industries, Inc.		2,885		242,542
				472,953
Diversified Support Services–0.36%
Cintas Corp.		4,963		138,765
Drug Retail–0.95%
Walgreen Co.		9,357		364,549
Electric Utilities–2.66%
American Electric Power Co., Inc.		14,718		529,554
Edison International		4,192		161,811
Entergy Corp.		2,127		150,655
FirstEnergy Corp.		4,682		173,328
				1,015,348
Food Distributors–0.62%
Sysco Corp.		7,988		234,847
Health Care Distributors–0.45%
Cardinal Health, Inc.		4,534		173,698
Health Care Equipment–0.84%
Covidien PLC (Ireland)		7,007		319,940
Home Improvement Retail–0.95%
Home Depot, Inc. (The)		10,341		362,555
Household Products–1.24%
Procter & Gamble Co. (The)		7,348		472,697
Human Resource & Employment Services–0.80%
Manpower Inc.		2,765		173,531
Robert Half International, Inc.		4,363		133,508
				307,039
Hypermarkets & Super Centers–0.65%
Wal-Mart Stores, Inc.		4,630		249,696
Industrial Conglomerates–3.86%
General Electric Co.		52,934		968,163
Tyco International Ltd.		12,176		504,573
				1,472,736
Industrial Machinery–1.09%
Dover Corp.		2,214		129,409
Ingersoll-Rand PLC (Ireland)		6,080		286,307
				415,716
Insurance Brokers–2.23%
Marsh & McLennan Cos., Inc.		31,163		851,996
Integrated Oil & Gas–5.51%
ConocoPhillips		2,928		199,397
Exxon Mobil Corp.		3,781		276,467
Hess Corp.		5,712		437,196
Occidental Petroleum Corp.		6,766		663,744
Royal Dutch Shell PLC–ADR (United Kingdom)		7,888		526,761
				2,103,565

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Invesco V.I. Select Dimensions Balanced Fund

	Shares		Value
Integrated Telecommunication Services–0.75%
Verizon Communications Inc.		7,986	$	285,739
Internet Software & Services–2.21%
eBay Inc.(b)		19,808		551,257
Yahoo! Inc.(b)		17,630		293,187
				844,444
Investment Banking & Brokerage–1.93%
Charles Schwab Corp. (The)		21,858		373,990
LPL Investment Holdings, Inc.(b)		738		26,841
Morgan Stanley		12,400		337,404
				738,235
IT Consulting & Other Services–0.60%
Amdocs Ltd.(b)		8,391		230,501
Life & Health Insurance–0.58%
Principal Financial Group, Inc.		6,750		219,780
Managed Health Care–1.21%
UnitedHealth Group Inc.		12,810		462,569
Movies & Entertainment–3.09%
Time Warner Inc.		14,155		455,366
Viacom Inc.–Class B		18,337		726,329
				1,181,695
Office Services & Supplies–0.45%
Avery Dennison Corp.		4,021		170,249
Oil & Gas Equipment & Services–1.38%
Cameron International Corp.(b)		2,117		107,395
Schlumberger Ltd.		5,040		420,840
				528,235
Oil & Gas Exploration & Production–2.62%
Anadarko Petroleum Corp.		7,724		588,260
Devon Energy Corp.		3,509		275,491
Noble Energy, Inc.		1,596		137,384
				1,001,135
Oil & Gas Storage & Transportation–0.21%
Williams Cos., Inc. (The)		3,214		79,450
Other Diversified Financial Services–5.33%
Bank of America Corp.		37,314		497,769
Citigroup Inc.(b)		72,182		341,421
JPMorgan Chase & Co.		28,201		1,196,286
				2,035,476
Packaged Foods & Meats–1.73%
Kraft Foods Inc.–Class A		11,063		348,595
Unilever N.V.- New York Shares (Netherlands)		9,997		313,906
				662,501
Personal Products–1.02%
Avon Products, Inc.		13,399		389,375
Pharmaceuticals–3.85%
Abbott Laboratories		3,566		170,847
Bristol-Myers Squibb Co.		14,651		387,958
Merck & Co., Inc.		6,257		225,502
Pfizer Inc.		25,125		439,939
Roche Holdings AG–ADR (Switzerland)		6,684		245,604
				1,469,850
Property & Casualty Insurance–0.50%
Chubb Corp. (The)		3,170		189,059
Regional Banks–1.99%
BB&T Corp.		5,565		146,304
Fifth Third Bancorp		9,950		146,066
PNC Financial Services Group, Inc.		7,721		468,819
				761,189
Semiconductors–0.64%
Intel Corp.		11,561		243,128
Soft Drinks–0.80%
Coca-Cola Co. (The)		2,814		185,077
Coca-Cola Enterprises Inc.		4,751		118,917
				303,994
Specialty Chemicals–0.27%
LyondellBasell Industries N.V.–Class A (Netherlands)(b)		3,003		103,303
Systems Software–0.17%
Microsoft Corp.		2,272		63,434
Wireless Telecommunication Services–1.12%
Vodafone Group PLC–ADR (United Kingdom)		16,146		426,739
Total Common Stocks & Other Equity Interests (Cost $23,197,642)				24,925,464
	Principal
	Amount
U.S. Treasury Securities–17.56%
U.S. Treasury Bills–0.04%
0.17%, 04/28/11(c)(d)	$	15,000		14,994

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Invesco V.I. Select Dimensions Balanced Fund

	Principal
	Amount		Value
U.S. Treasury Notes–15.95%
0.88%, 02/29/12	$	500,000	$	502,852
1.00%, 04/30/12		400,000		403,094
1.38%, 09/15/12		1,700,000		1,724,039
1.50%, 12/31/13		500,000		507,109
2.63%, 07/31/14		100,000		104,563
2.38%, 10/31/14		1,620,000		1,676,447
2.13%, 11/30/14		550,000		563,320
2.50%, 03/31/15		275,000		284,582
3.63%, 08/15/19		265,000		276,718
3.63%, 02/15/20		46,000		47,732
				6,090,456
U.S. Treasury Bonds–1.57%
4.25%, 05/15/39		555,000		546,502
4.63%, 02/15/40		50,000		52,359
				598,861
Total U.S. Treasury Securities (Cost $6,015,660)				6,704,311
Bonds & Notes–13.13%
Aerospace & Defense–0.04%
Raytheon Co., Sr. Unsec. Notes, 1.63%, 10/15/15		15,000		14,414
Agricultural Products–0.07%
Corn Products International, Inc., Sr. Unsec. Notes, 6.63%, 04/15/37		25,000		26,148
Airlines–0.12%
Continental Airlines, Inc.–Series 2010-1, Class A, Sec. Pass Through Ctfs., 4.75%, 01/12/21		25,000		25,047
Delta Air Lines, Inc.–Series 2010-1, Class A, Sec. Pass Through Ctfs., 6.20%, 07/02/18		20,000		21,475
				46,522
Automobile Manufacturers–0.06%
Daimler Finance North America LLC, Unsec. Gtd. Unsub. Global Notes, 7.30%, 01/15/12		20,000		21,308
Automotive Retail–0.24%
Advance Auto Parts, Inc., Sr. Unsec. Gtd. Notes, 5.75%, 05/01/20		50,000		51,938
AutoZone, Inc., Sr. Unsec. Global Notes, 6.50%, 01/15/14		35,000		38,858
				90,796
Brewers–0.29%
Anheuser-Busch InBev Worldwide Inc., Sr. Unsec. Gtd. Global Notes, 2.50%, 03/26/13		15,000		15,328
3.63%, 04/15/15		35,000		36,236
Sr. Unsec. Gtd. Notes, 7.20%, 01/15/14(e)		25,000		28,637
FBG Financial Ltd. (Australia), Sr. Unsec. Gtd. Notes, 5.13%, 06/15/15(e)		30,000		32,367
				112,568
Cable & Satellite–0.50%
Comcast Corp., Sr. Unsec. Gtd. Global Notes, 5.70%, 05/15/18		45,000		49,385
Sr. Unsec. Gtd. Notes, 5.15%, 03/01/20		15,000		15,795
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 05/15/16		40,000		44,500
Time Warner Cable Inc., Sr. Unsec. Gtd. Global Notes, 8.75%, 02/14/19		15,000		19,153
Sr. Unsec. Gtd. Notes, 8.25%, 04/01/19		10,000		12,388
6.75%, 06/15/39		10,000		11,062
5.88%, 11/15/40		40,000		39,762
				192,045
Construction Materials–0.04%
Holcim U.S. Finance Sarl & Cie SCS (Switzerland),Unsec. Unsub. Gtd. Notes, 6.00%, 12/30/19(e)		15,000		15,652
Consumer Finance–0.32%
American Express Co., Sr. Unsec. Notes, 8.13%, 05/20/19		20,000		24,747
American Express Credit Corp.–Series C, Sr. Unsec. Medium-Term Global Notes, 7.30%, 08/20/13		35,000		39,509
Capital One Financial Corp., Sr. Unsec. Notes, 6.75%, 09/15/17		50,000		56,988
				121,244
Department Stores–0.27%
Macy’s Retail Holdings, Inc., Sr. Unsec. Gtd. Notes, 5.35%, 03/15/12		100,000		103,750
Diversified Banks–1.43%
Abbey National Treasury Services PLC, Sr. Unsec. Gtd. Notes, 3.88%, 11/10/14(e)		100,000		98,864
Ally Financial, Inc., Gtd. Notes, 2.20%, 12/19/12		50,000		51,415
Bank of Nova Scotia (Canada), Sr. Unsec. Global Notes, 2.38%, 12/17/13		35,000		35,980
Barclays Bank PLC (United Kingdom), Sr. Unsec. Global Notes, 6.75%, 05/22/19		25,000		28,321
Commonwealth Bank of Australia (Australia), Sr. Unsec. Notes, 5.00%, 10/15/19(e)		35,000		36,423

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Invesco V.I. Select Dimensions Balanced Fund

	Principal
	Amount		Value
Diversified Banks–(continued)
Credit Suisse AG, Sub. Global Notes, 5.40%, 01/14/20	$	10,000	$	10,233
Unsec. Sub. Global Notes, (Switzerland)
6.00%, 02/15/18		5,000		5,387
HSBC Finance Corp., Sr. Unsec. Global Notes, 6.75%, 05/15/11		45,000		45,984
6.38%, 10/15/11		25,000		26,116
US Bancorp, Sr. Unsec. Notes, 2.00%, 06/14/13		50,000		50,767
Wells Fargo & Co., Sr. Unsec. Notes, 5.63%, 12/11/17		105,000		116,966
Westpac Banking Corp., (Australia), Sr. Unsec. Global Notes, 2.10%, 08/02/13		40,000		40,375
				546,831
Diversified Capital Markets–0.07%
UBS AG (Switzerland), Sr. Unsec. Medium-Term Notes, 5.88%, 12/20/17		25,000		27,547
Diversified Metals & Mining–0.23%
Freeport-McMoRan Copper & Gold Inc., Sr. Unsec. Notes, 8.38%, 04/01/17		30,000		33,140
Rio Tinto Finance USA Ltd. (Australia), Sr. Unsec. Gtd. Global Notes, 9.00%, 05/01/19		30,000		40,350
Southern Copper Corp., Sr. Unsec. Global Notes, 5.38%, 04/16/20		5,000		5,090
6.75%, 04/16/40		10,000		10,524
				89,104
Drug Retail–0.11%
CVS Caremark Corp., Sec. Global Pass Through Ctfs., 6.04%, 12/10/28		40,538		41,010
Electric Utilities–0.77%
Electricite de France S.A., Sr. Unsec. Notes, 4.60%, 01/27/20(e)		25,000		26,018
Enel Finance International S.A. (Luxembourg), Sr. Unsec. Gtd. Notes, 5.13%, 10/07/19(e)		100,000		99,081
Iberdola Finance Ireland Ltd. (Ireland), Unsec. Unsub. Gtd. Notes, 3.80%, 09/11/14(e)		75,000		74,881
Ohio Power Co.–Series M, Sr. Unsec. Notes, 5.38%, 10/01/21		50,000		53,364
Progress Energy Inc., Sr. Unsec. Notes, 7.05%, 03/15/19		35,000		41,729
				295,073
Electronic Components–0.02%
Corning, Inc., Sr. Unsec. Notes, 7.25%, 08/15/36		5,000		5,678
Environmental & Facilities Services–0.10%
Waste Management, Inc., Sr. Unsec. Gtd. Notes, 5.00%, 03/15/14		35,000		37,852
Food Retail–0.35%
Delhaize Group S.A. (Belgium), Sr. Unsec. Gtd. Bonds, 5.88%, 02/01/14		15,000		16,520
Safeway, Inc., Sr. Unsec. Global Notes, 3.95%, 08/15/20		55,000		52,218
WM Wrigley Jr. Co., Sr. Sec. Gtd. Floating Rate Notes, 1.66%, 06/28/11(e)(f)		65,000		65,101
				133,839
Health Care Equipment–0.19%
Boston Scientific Corp., Sr. Unsec. Notes, 5.45%, 06/15/14		40,000		42,450
CareFusion Corp., Sr. Unsec. Global Notes, 4.13%, 08/01/12		30,000		31,242
				73,692
Health Care Services–0.29%
Express Scripts Inc., Sr. Unsec. Gtd. Global Notes, 5.25%, 06/15/12		85,000		89,891
Medco Health Solutions Inc., Sr. Unsec. Notes, 2.75%, 09/15/15		20,000		19,889
				109,780
Home Improvement Retail–0.07%
Home Depot, Inc., Sr. Unsec. Global Notes, 5.88%, 12/16/36		25,000		26,117
Hypermarkets & Super Centers–0.04%
Wal-Mart Stores, Inc., Sr. Unsec. Global Notes, 5.25%, 09/01/35		10,000		10,114
6.50%, 08/15/37		5,000		5,912
				16,026
Industrial Conglomerates–1.46%
General Electric Capital Corp., Sr. Unsec. Medium-Term Global Notes, 5.63%, 05/01/18		35,000		38,139
Sr. Unsec. Gtd. Medium-Term Global Notes, 2.20%, 06/08/12		80,000		81,816
Sr. Unsec. Medium-Term Global Notes, 5.88%, 01/14/38		15,000		15,639
Series G, Sr. Gtd. Medium-Term Global Notes, 2.63%, 12/28/12		300,000		311,100
General Electric Co., Sr. Unsec. Global Notes, 5.25%, 12/06/17		45,000		48,448
Koninklije Philips Electronics N.V. (Netherlands), Sr. Unsec. Global Noted, 5.75%, 03/11/18		25,000		28,089
NBC Universal, Inc., Sr. Unsec. Notes, 2.10%, 04/01/14(e)		20,000		19,996
5.95%, 04/01/41(e)		15,000		15,066
				558,293

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Invesco V.I. Select Dimensions Balanced Fund

	Principal
	Amount		Value
Integrated Oil & Gas–0.08%
Hess Corp., Sr. Unsec. Global Notes, 5.60%, 02/15/41	$	25,000	$	24,932
Shell International Finance B.V. (Finland), Sr. Unsec. Gtd. Global Notes, 3.10%, 06/28/15		5,000		5,138
				30,070
Integrated Telecommunication Services–0.55%
AT&T Corp., Sr. Unsec. Gtd. Global Notes, 8.00%, 11/15/31		1,000		1,263
AT&T, Inc., Sr. Unsec. Global Notes, 6.15%, 09/15/34		15,000		15,660
6.30%, 01/15/38		50,000		53,051
Sr. Unsec. Notes, 5.35%, 09/01/40(e)		4,000		3,759
Deutsche Telekom International Finance B.V. (Netherlands), Sr. Unsec. Gtd. Global Bonds, 8.75%, 06/15/30		15,000		20,165
Telecom Italia Capital S.A. (Luxembourg), Sr. Unsec. Gtd. Global Notes, 7.00%, 06/04/18		35,000		37,031
7.18%, 06/18/19		20,000		21,388
Verizon Communications, Inc., Sr. Unsec. Global Notes, 6.35%, 04/01/19		25,000		28,943
8.95%, 03/01/39		20,000		28,666
				209,926
Internet Retail–0.12%
Expedia Inc., Sr. Unsec. Gtd. Global Notes, 5.95%, 08/15/20		45,000		45,305
Investment Banking & Brokerage–0.78%
Bear Stearns Cos. LLC (The), Sr. Unsec. Global Notes, 7.25%, 02/01/18		55,000		65,281
Charles Schwab Corp. (The), Sr. Unsec. Notes, 4.45%, 07/22/20		45,000		45,387
Goldman Sachs Group Inc. (The), Sr. Unsec. Global Notes, 6.15%, 04/01/18		100,000		109,971
Unsec. Sub. Global Notes, 6.75%, 10/01/37		20,000		20,642
Jefferies Group Inc., Sr. Unsec. Notes, 6.88%, 04/15/21		55,000		57,917
				299,198
Life & Health Insurance–0.39%
Aegon N.V. (Netherlands), Sr. Unsec. Global Bonds, 4.63%, 12/01/15		25,000		25,860
Aflac Inc., Sr. Unsec. Notes, 6.45%, 08/15/40		30,000		31,145
Pacific LifeCorp., Sr. Notes, 6.00%, 02/10/20(e)		40,000		42,245
Prudential Financial Inc., Series D, Sr. Unsec. Disc. Medium-Term Notes, 4.75%, 09/17/15(c)		25,000		26,624
Sr. Unsec. Medium-Term Notes, 7.38%, 06/15/19		5,000		5,879
6.63%, 12/01/37		15,000		16,525
				148,278
Managed Health Care–0.23%
Aetna Inc, Sr. Unsec. Notes, 3.95%, 09/01/20		55,000		52,826
WellPoint Inc, Sr. Unsec. Notes, 4.35%, 08/15/20		35,000		34,705
				87,531
Movies & Entertainment–0.03%
Time Warner Inc., Sr. Unsec. Gtd. Notes, 5.88%, 11/15/16		10,000		11,273
Multi-Line Insurance–0.08%
CNA Financial Corp., Sr. Unsec. Global Bonds, 5.88%, 08/15/20		30,000		29,975
Multi-Utilities–0.03%
Nisource Finance Corp., Sr. Unsec. Gtd. Bonds, 6.80%, 01/15/19		10,000		11,346
Office REIT’s–0.08%
Digital Realty Trust L.P., Sr. Unsec. Gtd. Notes, 4.50%, 07/15/15(e)		30,000		30,313
Oil & Gas Exploration & Production–0.09%
Petroleos Mexicanos (Mexico), Sr. Unsec. Gtd. Notes, 5.50%, 01/21/21		35,000		35,571
Oil & Gas Storage & Transportation–0.18%
Enterprise Products Operating LLC, Sr. Unsec. Global Notes, 5.25%, 01/31/20		15,000		15,593
Series N, Sr. Unsec. Gtd. Notes, 6.50%, 01/31/19		25,000		28,413
Texas Eastern Transmission LP, Sr. Unsec. Notes, 7.00%, 07/15/32		20,000		23,485
				67,491
Other Diversified Financial Services–2.02%
Bank of America Corp., Sr. Unsec. Global Notes, 5.75%, 12/01/17		110,000		114,049
Bear Stearns Cos. LLC (The), Sr. Unsec. Global Notes, 6.40%, 10/02/17		5,000		5,718
Citigroup Funding Inc., Unsec. Gtd. Unsub. Global Notes, 2.25%, 12/10/12		360,000		370,269

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Invesco V.I. Select Dimensions Balanced Fund

	Principal
	Amount		Value
Other Diversified Financial Services–(continued)
Citigroup Inc., Sr. Unsec. Global Notes, 6.13%, 11/21/17	$	35,000	$	38,609
6.13%, 05/15/18		25,000		27,407
8.50%, 05/22/19		40,000		49,837
5.88%, 05/29/37		25,000		24,747
ERAC USA Finance LLC, Sr. Unsec. Gtd. Notes, 2.75%, 07/01/13(e)		30,000		30,518
JPMorgan Chase & Co., Sr. Unsec. Global Notes, 4.40%, 07/22/20		40,000		39,515
Sr. Unsec. Notes, 6.00%, 01/15/18		25,000		27,942
Merrill Lynch & Co., Inc., Sr. Unsec. Medium-Term Notes, 6.88%, 04/25/18		40,000		43,752
				772,363
Packaged Foods & Meats–0.20%
Kraft Foods Inc., Sr. Unsec. Global Notes, 5.38%, 02/10/20		15,000		16,192
7.00%, 08/11/37		30,000		35,348
Sr. Unsec. Notes, 6.88%, 01/26/39		20,000		23,360
				74,900
Property & Casualty Insurance–0.04%
Travelers Cos., Inc. (The), Sr. Unsec. Notes, 5.35%, 11/01/40		15,000		14,739
Railroads–0.16%
CSX Corp., Sr. Unsec. Global Notes, 6.15%, 05/01/37		5,000		5,327
Sr. Unsec. Notes, 5.50%, 04/15/41		50,000		49,141
Union Pacific Corp., Sr. Unsec. Notes, 6.13%, 02/15/20		5,000		5,738
				60,206
Real Estate Management & Development–0.03%
Brookfield Asset Management, Inc. (Canada), Sr. Unsec. Yankee Notes, 7.13%, 06/15/12		10,000		10,547
Regional Banks–0.14%
PNC Funding Corp., Sr. Unsec. Gtd. Global Notes, 5.13%, 02/08/20		30,000		31,481
Sr. Unsec. Gtd. Notes, 6.70%, 06/10/19		20,000		23,110
				54,591
Reinsurance–0.07%
Reinsurance Group of America, Inc., Sr. Unsec. Notes, 6.45%, 11/15/19		25,000		26,532
Restaurants–0.09%
Yum! Brands, Inc., Sr. Unsec. Global Bonds, 6.25%, 03/15/18		10,000		11,347
Sr. Unsec. Notes, 5.30%, 09/15/19		20,000		21,414
				32,761
Retail REIT’s–0.07%
WEA Finance LLC/WT Finance Australia Pty Ltd., Sr. Unsec. Gtd. Notes, 6.75%, 09/02/19(e)		25,000		27,829
Specialized Finance–0.07%
NASDAQ OMX Group Inc. (The), Sr. Unsec. Notes, 5.55%, 01/15/20		25,000		25,151
Specialized REIT’s–0.10%
Health Care REIT Inc., Sr. Unsec. Notes, 4.95%, 01/15/21		40,000		38,651
Steel–0.36%
ArcelorMittal (Luxembourg), Sr. Unsec. Global Bonds, 3.75%, 08/05/15		50,000		50,429
9.85%, 06/01/19		36,000		45,654
Vale Overseas Ltd. (Brazil), 6.88%, 11/10/39		15,000		16,363
Sr. Unsec. Gtd. Global Notes, 5.63%, 09/15/19		25,000		26,754
				139,200
Wireless Telecommunication Services–0.06%
American Tower Corp., Sr. Unsec. Notes, 4.50%, 01/15/18		25,000		24,758
Total Bonds & Notes (Cost $5,362,107)				5,013,794
U.S. Government Sponsored Agency Securities–1.61%
Federal Home Loan Mortgage Corp. (FHLMC)–1.09%
Federal Home Loan Mortgage Corp., Sr. Unsec. Global Bonds, 6.75%, 03/15/31		100,000		128,280
Sr. Unsec. Global Notes, 3.00%, 07/28/14		120,000		126,441
5.50%, 08/23/17		140,000		162,388
				417,109
Federal National Mortgage Association (FNMA)–0.52%
Federal National Mortgage Association, Sr. Unsec. Global Notes, 4.38%, 10/15/15		180,000		197,980
Total U.S. Government Sponsored Agency Securities (Cost $582,310)				615,089

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Invesco V.I. Select Dimensions Balanced Fund

	Principal
	Amount		Value
Foreign Sovereign Debts–0.41%
Sovereign Debts–0.41%
Brazilian Government (Brazil), Sr. Unsec. Global Bonds, 6.00%, 01/17/17	$	100,000	$	113,500
Republic of Italy (Italy), Sr. Unsec. Global Notes, 6.88%, 09/27/23		30,000		33,184
Republic of Peru (Peru), Sr. Unsec. Global Notes, 7.13%, 03/30/19		10,000		11,937
Total Foreign Sovereign Debts (Cost $145,142)				158,621
Municipal Obligations–0.09%
Texas (State of) Transportation Commission, Series 2010B, Taxable First Tier Build America RB, 5.03%, 04/01/26 (Cost $35,000)		35,000		34,623
	Shares
Money Market Funds–1.94%
Liquid Assets Portfolio–Institutional Class(g)		370,002		370,002
Premier Portfolio–Institutional Class(g)		370,002		370,002
Total Money Market Funds (Cost $740,004)				740,004
TOTAL INVESTMENTS–100.01% (Cost $36,077,865)				38,191,906
OTHER ASSETS LESS LIABILITIES–(0.01)%				(5,070	)
NET ASSETS–100.00%			$	38,186,836

Investment Abbreviations:

ADR	– American Depositary Receipt
Ctfs.	– Certificates
Disc.	– Discounted
Gtd.	– Guaranteed
Jr.	– Junior
RB	– Revenue Bonds
REIT	– Real Estate Investment Trust
Sec.	– Secured
Sr.	– Senior
Sub.	– Subordinated
Unsec.	– Unsecured
Unsub.	– Unsubordinated

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund.
(d)	All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1K and Note 4.
(e)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2010 was $646,751, which represented 1.69% of the Fund’s Net Assets.
(f)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2010.
(g)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Schedule of Investments^(a)

December 31, 2010

Invesco V.I. Select Dimensions Dividend Growth Fund

	Shares		Value
Common Stocks–94.95%
Aerospace & Defense–3.57%
General Dynamics Corp.		26,383	$	1,872,138
Raytheon Co.		28,999		1,343,813
				3,215,951
Apparel Retail–0.50%
Ross Stores, Inc.		7,175		453,819
Apparel, Accessories & Luxury Goods–0.36%
VF Corp.		3,769		324,812
Asset Management & Custody Banks–3.05%
Federated Investors, Inc.–Class B		56,141		1,469,210
State Street Corp.		27,664		1,281,950
				2,751,160
Auto Parts & Equipment–1.78%
Johnson Controls, Inc.		41,860		1,599,052
Brewers–1.80%
Heineken N.V. (Netherlands)		33,033		1,619,581
Building Products–1.80%
Masco Corp.		127,904		1,619,265
Casinos & Gaming–1.47%
International Game Technology		74,704		1,321,514
Construction, Farm Machinery & Heavy Trucks–1.00%
Caterpillar Inc.		9,614		900,447
Consumer Finance–2.94%
American Express Co.		20,175		865,911
Capital One Financial Corp.		41,767		1,777,603
				2,643,514
Data Processing & Outsourced Services–2.21%
Automatic Data Processing, Inc.		43,023		1,991,104
Department Stores–0.37%
Nordstrom, Inc.		7,850		332,683
Distributors–0.80%
Genuine Parts Co.		14,074		722,559
Diversified Banks–2.00%
Societe Generale (France)		20,370		1,096,935
U.S. Bancorp		26,080		703,377
				1,800,312
Diversified Chemicals–1.70%
E. I. du Pont de Nemours and Co.		30,635		1,528,074
Drug Retail–1.42%
Walgreen Co.		32,777		1,276,992
Electric Utilities–2.96%
American Electric Power Co., Inc.		50,269		1,808,678
Entergy Corp.		12,078		855,485
				2,664,163
Electrical Components & Equipment–1.27%
Emerson Electric Co.		19,973		1,141,856
Electronic Components–0.93%
Corning Inc.		43,516		840,729
Food Distributors–1.71%
Sysco Corp.		52,288		1,537,267
General Merchandise Stores–1.52%
Target Corp.		22,702		1,365,071
Health Care Equipment–1.64%
Stryker Corp.		27,450		1,474,065
Hotels, Resorts & Cruise Lines–1.13%
Accor S.A. (France)		8,350		372,193
Marriott International Inc.–Class A		15,438		641,295
				1,013,488
Household Appliances–0.72%
Whirlpool Corp.		7,319		650,147
Household Products–4.21%
Kimberly-Clark Corp.		36,936		2,328,445
Procter & Gamble Co. (The)		22,754		1,463,765
				3,792,210
Industrial Machinery–4.39%
Eaton Corp.		5,045		512,118
Pentair, Inc.		45,796		1,672,012
Snap-on Inc.		31,313		1,771,689
				3,955,819
Insurance Brokers–0.68%
Marsh & McLennan Cos., Inc.		22,534		616,080
Integrated Oil & Gas–4.67%
Chevron Corp.		5,660		516,475
Eni S.p.A. (Italy)		53,553		1,169,345
Exxon Mobil Corp.		22,368		1,635,548
Total S.A. (France)		16,691		886,349
				4,207,717
Integrated Telecommunication Services–0.99%
AT&T Inc.		30,308		890,449

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Invesco V.I. Select Dimensions Dividend Growth Fund

	Shares		Value
Investment Banking & Brokerage–1.45%
Charles Schwab Corp. (The)		76,252	$	1,304,672
IT Consulting & Other Services–0.78%
International Business Machines Corp.		4,787		702,540
Life & Health Insurance–1.66%
Lincoln National Corp.		31,567		877,878
StanCorp Financial Group, Inc.		13,705		618,644
				1,496,522
Motorcycle Manufacturers–0.68%
Harley-Davidson, Inc.		17,638		611,509
Movies & Entertainment–1.42%
Time Warner Inc.		39,880		1,282,940
Multi-Utilities–1.75%
Dominion Resources, Inc.		16,956		724,360
DTE Energy Co.		18,836		853,648
				1,578,008
Office Services & Supplies–0.40%
Pitney Bowes Inc.		14,753		356,728
Oil & Gas Equipment & Services–1.56%
Baker Hughes Inc.		24,621		1,407,583
Oil & Gas Storage & Transportation–0.50%
Southern Union Co.		18,581		447,245
Other Diversified Financial Services–0.54%
JPMorgan Chase & Co.		11,421		484,479
Packaged Foods & Meats–5.35%
Campbell Soup Co.		27,781		965,390
General Mills, Inc.		46,830		1,666,680
Kraft Foods Inc.–Class A		51,809		1,632,501
Mead Johnson Nutrition Co.		8,859		551,473
				4,816,044
Paper Products–1.92%
International Paper Co.		63,470		1,728,923
Pharmaceuticals–4.43%
Bristol-Myers Squibb Co.		44,228		1,171,157
Eli Lilly and Co.		17,890		626,866
Johnson & Johnson		27,240		1,684,794
Pfizer Inc.		29,038		508,455
				3,991,272
Property & Casualty Insurance–1.27%
Travelers Cos., Inc. (The)		20,561		1,145,453
Regional Banks–5.60%
Fifth Third Bancorp		98,577		1,447,110
SunTrust Banks, Inc.		77,393		2,283,867
Zions Bancorp.		54,072		1,310,165
				5,041,142
Restaurants–1.67%
Brinker International, Inc.		72,061		1,504,634
Semiconductors–1.26%
Texas Instruments Inc.		35,004		1,137,630
Soft Drinks–1.54%
Coca-Cola Co. (The)		21,069		1,385,708
Specialized Consumer Services–0.36%
H&R Block, Inc.		27,513		327,680
Specialty Chemicals–0.88%
Lubrizol Corp. (The)		7,447		795,935
Systems Software–1.75%
Microsoft Corp.		33,956		948,052
Oracle Corp.		20,101		629,161
				1,577,213
Thrifts & Mortgage Finance–1.51%
Hudson City Bancorp, Inc.		107,020		1,363,435
Tobacco–3.08%
Altria Group, Inc.		57,949		1,426,704
Philip Morris International Inc.		22,971		1,344,493
				2,771,197
Total Common Stocks (Cost $75,977,061)				85,508,392
Money Market Funds–5.18%
Liquid Assets Portfolio–Institutional Class(b)		2,334,095		2,334,095
Premier Portfolio–Institutional Class(b)		2,334,095		2,334,095
Total Money Market Funds (Cost $4,668,190)				4,668,190
TOTAL INVESTMENTS–100.13% (Cost $80,645,251)				90,176,582
OTHER ASSETS LESS LIABILITIES–(0.13)%				(115,175	)
NET ASSETS–100.00%			$	90,061,407

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Schedule of Investments^(a)

December 31, 2010

Invesco Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
Common Stocks & Other Equity Interests–99.50%
Advertising–0.39%
Interpublic Group of Cos., Inc. (The)(b)		18,108	$	192,307
Omnicom Group Inc.		4,213		192,955
				385,262
Aerospace & Defense–2.38%
Boeing Co. (The)		3,008		196,302
General Dynamics Corp.		2,770		196,559
Goodrich Corp.		2,254		198,510
Honeywell International Inc.		3,691		196,214
ITT Corp.		3,800		198,018
L-3 Communications Holdings, Inc.		2,777		195,751
Lockheed Martin Corp.		2,791		195,119
Northrop Grumman Corp.		3,050		197,579
Precision Castparts Corp.		1,391		193,641
Raytheon Co.		4,331		200,698
Rockwell Collins, Inc.		3,353		195,346
United Technologies Corp.		2,482		195,383
				2,359,120
Agricultural Products–0.20%
Archer-Daniels-Midland Co.		6,515		195,971
Air Freight & Logistics–0.79%
C.H. Robinson Worldwide, Inc.		2,476		198,550
Expeditors International of Washington, Inc.		3,534		192,956
FedEx Corp.		2,101		195,414
United Parcel Service, Inc.–Class B		2,677		194,297
				781,217
Airlines–0.20%
Southwest Airlines Co.		15,132		196,413
Aluminum–0.21%
Alcoa Inc.		13,439		206,826
Apparel Retail–1.19%
Abercrombie & Fitch Co.–Class A		3,425		197,383
Gap, Inc. (The)		9,187		203,400
Limited Brands, Inc.		6,263		192,462
Ross Stores, Inc.		3,107		196,518
TJX Cos., Inc. (The)		4,504		199,932
Urban Outfitters, Inc.(b)		5,381		192,694
				1,182,389
Apparel, Accessories & Luxury Goods–0.57%
Coach, Inc.		3,359		185,786
Polo Ralph Lauren Corp.		1,713		190,006
VF Corp.		2,192		188,907
				564,699
Application Software–1.18%
Adobe Systems Inc.(b)		6,796		209,181
Autodesk, Inc.(b)		5,000		191,000
Citrix Systems, Inc.(b)		2,826		193,327
Compuware Corp.(b)		16,710		195,006
Intuit Inc.(b)		3,981		196,263
Salesforce.com, Inc.(b)		1,433		189,156
				1,173,933
Asset Management & Custody Banks–2.01%
Ameriprise Financial, Inc.		3,543		203,900
Bank of New York Mellon Corp. (The)		6,657		201,041
Federated Investors, Inc.–Class B		7,366		192,768
Franklin Resources, Inc.		1,707		189,836
Invesco Ltd.(c)		8,589		206,651
Janus Capital Group Inc.		15,690		203,499
Legg Mason, Inc.		5,384		195,278
Northern Trust Corp.		3,605		199,753
State Street Corp.		4,303		199,401
T. Rowe Price Group Inc.		3,105		200,397
				1,992,524
Auto Parts & Equipment–0.19%
Johnson Controls, Inc.		5,062		193,368
Automobile Manufacturers–0.20%
Ford Motor Co.(b)		11,646		195,536
Automotive Retail–0.77%
AutoNation, Inc.(b)		7,198		202,983
AutoZone, Inc.(b)		724		197,355
CarMax, Inc.(b)		5,510		175,659
O’Reilly Automotive, Inc.(b)		3,116		188,269
				764,266
Biotechnology–1.16%
Amgen Inc.(b)		3,406		186,989
Biogen Idec Inc.(b)		2,870		192,433
Celgene Corp.(b)		3,300		195,162
Cephalon Inc.(b)		2,998		185,037

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Invesco Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
Biotechnology–(continued)
Genzyme Corp.(b)		2,803	$	199,574
Gilead Sciences, Inc.(b)		5,261		190,659
				1,149,854
Brewers–0.19%
Molson Coors Brewing Co.–Class B		3,850		193,231
Broadcasting–0.59%
CBS Corp.–Class B		10,424		198,577
Discovery Communications, Inc.–Class A(b)		4,607		192,112
Scripps Networks Interactive Inc.–Class A		3,756		194,373
				585,062
Building Products–0.19%
Masco Corp.		14,982		189,672
Cable & Satellite–0.80%
Cablevision Systems Corp.–Class A		5,717		193,463
Comcast Corp.,–Class A		9,139		200,784
DIRECTV–Class A(b)		4,983		198,971
Time Warner Cable Inc.		2,995		197,760
				790,978
Casinos & Gaming–0.40%
International Game Technology		11,537		204,089
Wynn Resorts Ltd.		1,864		193,558
				397,647
Coal & Consumable Fuels–0.64%
CONSOL Energy Inc.		4,560		222,255
Massey Energy Co.		3,825		205,211
Peabody Energy Corp.		3,231		206,719
				634,185
Commercial Printing–0.20%
R. R. Donnelley & Sons Co.		11,161		194,983
Communications Equipment–1.58%
Cisco Systems, Inc.(b)		10,034		202,988
F5 Networks, Inc.(b)		1,438		187,170
Harris Corp.		4,217		191,030
JDS Uniphase Corp.(b)		13,607		197,029
Juniper Networks, Inc.(b)		5,362		197,965
Motorola Solutions, Inc.(b)		22,035		199,858
QUALCOMM, Inc.		3,967		196,327
Tellabs, Inc.		29,118		197,420
				1,569,787
Computer & Electronics Retail–0.60%
Best Buy Co., Inc.		5,709		195,762
GameStop Corp.–Class A(b)		9,067		207,453
RadioShack Corp.		10,686		197,584
				600,799
Computer Hardware–0.59%
Apple Inc.(b)		610		196,762
Dell Inc.(b)		14,345		194,375
Hewlett-Packard Co.		4,663		196,312
				587,449
Computer Storage & Peripherals–1.19%
EMC Corp.(b)		8,544		195,658
Lexmark International, Inc.–Class A(b)		5,601		195,027
NetApp, Inc.(b)		3,641		200,109
QLogic Corp.(b)		11,415		194,283
SanDisk Corp.(b)		4,004		199,639
Western Digital Corp.(b)		5,934		201,163
				1,185,879
Construction & Engineering–0.61%
Fluor Corp.		3,068		203,286
Jacobs Engineering Group Inc.(b)		4,496		206,141
Quanta Services, Inc.(b)		10,049		200,176
				609,603
Construction Materials–0.19%
Vulcan Materials Co.		4,248		188,441
Construction, Farm Machinery & Heavy Trucks–0.80%
Caterpillar Inc.		2,112		197,810
Cummins Inc.		1,812		199,338
Deere & Co.		2,397		199,071
PACCAR Inc.		3,462		198,788
				795,007
Consumer Electronics–0.19%
Harman International Industries, Inc.(b)		4,093		189,506
Consumer Finance–0.81%
American Express Co.		4,446		190,822
Capital One Financial Corp.		4,832		205,650
Discover Financial Services		10,858		201,199
SLM Corp.(b)		16,225		204,273
				801,944
Data Processing & Outsourced Services–1.79%
Automatic Data Processing, Inc.		4,175		193,219
Computer Sciences Corp.		4,042		200,483

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Invesco Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
Data Processing & Outsourced Services–(continued)
Fidelity National Information Services, Inc.		7,130	$	195,291
Fiserv, Inc.(b)		3,243		189,910
MasterCard, Inc.–Class A		884		198,113
Paychex, Inc.		6,311		195,073
Total System Services, Inc.		12,805		196,941
Visa Inc.,–Class A		2,924		205,791
Western Union Co. (The)		10,703		198,755
				1,773,576
Department Stores–0.99%
JC Penney Co., Inc.		5,805		187,560
Kohl’s Corp.(b)		3,636		197,580
Macy’s, Inc.		7,557		191,192
Nordstrom, Inc.		4,624		195,965
Sears Holdings Corp.(b)		2,886		212,842
				985,139
Distillers & Vintners–0.39%
Brown-Forman Corp.–Class B		2,794		194,518
Constellation Brands, Inc.–Class A(b)		8,833		195,651
				390,169
Distributors–0.20%
Genuine Parts Co.		3,826		196,427
Diversified Banks–0.61%
Comeric Inc.		4,733		199,922
US Bancorp		7,467		201,385
Wells Fargo & Co.		6,530		202,365
				603,672
Diversified Chemicals–1.00%
Dow Chemical Co. (The)		5,763		196,749
E. I. du Pont de Nemours and Co.		3,923		195,679
Eastman Chemical Co.		2,437		204,903
FMC Corp.		2,453		195,970
PPG Industries, Inc.		2,385		200,507
				993,808
Diversified Metals & Mining–0.40%
Freeport-McMoRan Copper & Gold Inc.		1,720		206,555
Titanium Metals Corp.(b)		10,822		185,922
				392,477
Diversified REIT’s–0.21%
Vornado Realty Trust		2,448		203,992
Diversified Support Services–0.38%
Cintas Corp.		6,702		187,388
Iron Mountain, Inc.		7,727		193,252
				380,640
Drug Retail–0.40%
CVS Caremark Corp.		5,687		197,737
Walgreen Co.		5,206		202,826
				400,563
Education Services–0.41%
Apollo Group, Inc.–Class A(b)		5,084		200,767
DeVry, Inc.		4,250		203,915
				404,682
Electric Utilities–2.77%
Allegheny Energy, Inc.		8,266		200,368
American Electric Power Co., Inc.		5,436		195,587
Duke Energy Corp.		11,029		196,426
Edison International		5,058		195,239
Entergy Corp.		2,774		196,482
Exelon Corp.		4,763		198,331
FirstEnergy Corp.		5,393		199,649
NextEra Energy, Inc.		3,786		196,834
Northeast Utilities		6,137		195,648
Pepco Holdings, Inc.		10,686		195,020
Pinnacle West Capital Corp.		4,713		195,354
PPL Corp.		7,516		197,821
Progress Energy, Inc.		4,481		194,834
Southern Co.		5,162		197,343
				2,754,936
Electrical Components & Equipment–0.58%
Emerson Electric Co.		3,353		191,691
Rockwell Automation, Inc.		2,714		194,621
Roper Industries, Inc.		2,504		191,381
				577,693
Electronic Components–0.40%
Amphenol Corp.–Class A		3,668		193,597
Corning Inc.		10,316		199,305
				392,902
Electronic Equipment & Instruments–0.21%
FLIR Systems, Inc.(b)		6,877		204,591

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Invesco Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
Electronic Manufacturing Services–0.42%
Jabil Circuit, Inc.		11,199	$	224,988
Molex Inc.		8,658		196,710
				421,698
Environmental & Facilities Services–0.60%
Republic Services, Inc.		6,434		192,119
Stericycle, Inc.(b)		2,482		200,844
Waste Management, Inc.		5,393		198,840
				591,803
Fertilizers & Agricultural Chemicals–0.43%
CF Industries Holdings, Inc.		1,565		211,510
Monsanto Co.		3,028		210,870
				422,380
Food Distributors–0.20%
Sysco Corp.		6,677		196,304
Food Retail–0.82%
Kroger Co. (The)		9,017		201,620
Safeway Inc.		9,075		204,097
SUPERVALU Inc.		22,337		215,105
Whole Foods Market, Inc.(b)		3,848		194,670
				815,492
Footwear–0.19%
NIKE, Inc.–Class B		2,172		185,532
Gas Utilities–0.40%
Nicor Inc.		3,930		196,185
ONEOK, Inc.		3,612		200,358
				396,543
General Merchandise Stores–0.60%
Big Lots, Inc.(b)		6,621		201,676
Family Dollar Stores, Inc.		3,946		196,156
Target Corp.		3,342		200,954
				598,786
Gold–0.20%
Newmont Mining Corp.		3,293		202,289
Health Care Distributors–0.79%
AmerisourceBergen Corp.		5,896		201,172
Cardinal Health, Inc.		5,054		193,619
McKesson Corp.		2,843		200,090
Patterson Cos. Inc.		6,334		194,010
				788,891
Health Care Equipment–2.14%
Baxter International Inc.		3,815		193,115
Becton, Dickinson and Co.		2,295		193,973
Boston Scientific Corp.(b)		25,578		193,625
C.R. Bard, Inc.		2,043		187,486
CareFusion Corp.(b)		7,871		202,285
Intuitive Surgical, Inc.(b)		736		189,704
Medtronic, Inc.		5,231		194,018
St. Jude Medical, Inc.(b)		4,589		196,180
Stryker Corp.		3,587		192,622
Varian Medical Systems, Inc.(b)		2,779		192,529
Zimmer Holdings, Inc.(b)		3,589		192,658
				2,128,195
Health Care Facilities–0.20%
Tenet Healthcare Corp.(b)		29,031		194,217
Health Care Services–0.97%
DaVita, Inc.(b)		2,794		194,155
Express Scripts, Inc.(b)		3,562		192,526
Laboratory Corp. of America Holdings(b)		2,200		193,424
Medco Health Solutions, Inc.(b)		3,147		192,817
Quest Diagnostics Inc.		3,599		194,238
				967,160
Health Care Supplies–0.19%
DENTSPLY International Inc.		5,659		193,368
Health Care Technology–0.19%
Cerner Corp.(b)		2,017		191,091
Home Entertainment Software–0.20%
Electronic Arts Inc.(b)		12,298		201,441
Home Furnishings–0.19%
Leggett & Platt, Inc.		8,423		191,707
Home Improvement Retail–0.39%
Home Depot, Inc. (The)		5,574		195,424
Lowe’s Cos., Inc.		7,773		194,947
				390,371
Homebuilding–0.63%
D.R. Horton, Inc.		17,179		204,946
Lennar Corp.–Class A		11,296		211,800
Pulte Group Inc.(b)		27,716		208,424
				625,170
Homefurnishing Retail–0.20%
Bed Bath & Beyond Inc.(b)		4,100		201,515

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Invesco Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
Hotels, Resorts & Cruise Lines–0.80%
Carnival Corp.		4,602	$	212,198
Marriott International Inc.–Class A		4,697		195,113
Starwood Hotels & Resorts Worldwide, Inc.		3,274		198,994
Wyndham Worldwide Corp.		6,398		191,684
				797,989
Household Appliances–0.40%
Stanley Black & Decker Inc.		3,087		206,428
Whirlpool Corp.		2,171		192,850
				399,278
Household Products–0.79%
Clorox Co. (The)		3,128		197,940
Colgate-Palmolive Co.		2,415		194,093
Kimberly-Clark Corp.		3,118		196,559
Procter & Gamble Co. (The)		3,018		194,148
				782,740
Housewares & Specialties–0.39%
Fortune Brands, Inc.		3,182		191,715
Newell Rubbermaid Inc.		10,870		197,617
				389,332
Human Resource & Employment Services–0.39%
Monster Worldwide, Inc.(b)		7,935		187,504
Robert Half International, Inc.		6,431		196,789
				384,293
Hypermarkets & Super Centers–0.39%
Costco Wholesale Corp.		2,723		196,628
Wal-Mart Stores Inc.		3,595		193,878
				390,506
Independent Power Producers & Energy Traders–0.63%
AES Corp. (The)(b)		17,104		208,327
Constellation Energy Group Inc.		6,805		208,437
NRG Energy, Inc.(b)		10,480		204,779
				621,543
Industrial Conglomerates–0.80%
3M Co.		2,265		195,469
General Electric Co.		11,054		202,178
Textron Inc.		8,401		198,600
Tyco International Ltd.		4,686		194,188
				790,435
Industrial Gases–0.60%
Air Products & Chemicals, Inc.		2,189		199,090
Airgas, Inc.		3,103		193,813
Praxair, Inc.		2,091		199,628
				592,531
Industrial Machinery–1.79%
Danaher Corp.		4,160		196,227
Dover Corp.		3,410		199,315
Eaton Corp.		1,955		198,452
Flowserve Corp.		1,684		200,766
Illinois Tool Works Inc.		3,761		200,837
Ingersoll-Rand PLC (Ireland)		4,163		196,036
Pall Corp.		3,912		193,957
Parker Hannifin Corp.		2,306		199,008
Snap-on Inc.		3,419		193,447
				1,778,045
Industrial REIT’s–0.20%
ProLogis		14,006		202,247
Insurance Brokers–0.40%
Aon Corp.		4,338		199,591
Marsh & McLennan Cos., Inc.		7,259		198,461
				398,052
Integrated Oil & Gas–1.42%
Chevron Corp.		2,214		202,028
ConocoPhillips		3,006		204,709
Exxon Mobil Corp.		2,710		198,155
Hess Corp.		2,593		198,468
Marathon Oil Corp.		5,583		206,738
Murphy Oil Corp.		2,712		202,180
Occidental Petroleum Corp.		2,054		201,497
				1,413,775
Integrated Telecommunication Services–1.21%
AT&T Inc.		6,698		196,787
CenturyLink, Inc.		4,335		200,147
Frontier Communications Corp.		21,154		205,828
Qwest Communications International Inc.		26,406		200,950
Verizon Communications Inc.		5,648		202,085
Windstream Corp.		13,989		195,007
				1,200,804
Internet Retail–0.77%
Amazon.com, Inc.(b)		1,101		198,180
Expedia, Inc.		7,292		182,956

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Invesco Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
Internet Retail–(continued)
Netflix Inc.(b)		1,086	$	190,810
Priceline.com Inc.(b)		488		194,981
				766,927
Internet Software & Services–0.95%
Akamai Technologies, Inc.(b)		3,845		180,907
eBay Inc.(b)		6,570		182,843
Google Inc.,–Class A(b)		331		196,604
VeriSign, Inc.		5,707		186,448
Yahoo! Inc.(b)		11,990		199,394
				946,196
Investment Banking & Brokerage–0.81%
Charles Schwab Corp. (The)		11,639		199,143
E*TRADE Financial Corp.(b)		12,689		203,024
Goldman Sachs Group, Inc. (The)		1,192		200,447
Morgan Stanley		7,456		202,878
				805,492
IT Consulting & Other Services–0.78%
Cognizant Technology Solutions Corp.,–Class A(b)		2,709		198,543
International Business Machines Corp.		1,349		197,979
SAIC, Inc.(b)		12,463		197,663
Teradata Corp.(b)		4,498		185,138
				779,323
Leisure Products–0.38%
Hasbro, Inc.		3,957		186,691
Mattel, Inc.		7,624		193,879
				380,570
Life & Health Insurance–1.39%
Aflac, Inc.		3,521		198,690
Lincoln National Corp.		6,882		191,388
MetLife, Inc.		4,454		197,936
Principal Financial Group, Inc.		6,127		199,495
Prudential Financial, Inc.		3,367		197,677
Torchmark Corp.		3,229		192,901
Unum Group		8,211		198,870
				1,376,957
Life Sciences Tools & Services–0.98%
Agilent Technologies, Inc.(b)		4,826		199,941
Life Technologies Corp.(b)		3,526		195,693
PerkinElmer, Inc.		7,513		193,986
Thermo Fisher Scientific, Inc.(b)		3,507		194,148
Waters Corp.(b)		2,440		189,612
				973,380
Managed Health Care–1.19%
Aetna Inc.		6,442		196,545
CIGNA Corp.		5,331		195,435
Coventry Health Care, Inc.(b)		7,344		193,882
Humana Inc.(b)		3,549		194,272
UnitedHealth Group Inc.		5,582		201,566
WellPoint Inc.(b)		3,497		198,839
				1,180,539
Metal & Glass Containers–0.40%
Ball Corp.		2,855		194,283
Owens-Illinois, Inc.(b)		6,528		200,409
				394,692
Motorcycle Manufacturers–0.20%
Harley-Davidson, Inc.		5,671		196,614
Movies & Entertainment–0.80%
News Corp.–Class A		13,522		196,880
Time Warner Inc.		6,209		199,744
Viacom Inc.–Class B		5,067		200,704
Walt Disney Co. (The)		5,281		198,090
				795,418
Multi-Line Insurance–1.02%
American International Group, Inc.(b)		3,722		214,462
Assurant, Inc.		5,259		202,577
Genworth Financial Inc.–Class A(b)		15,238		200,227
Hartford Financial Services Group, Inc. (The)		7,476		198,039
Loews Corp.		5,062		196,962
				1,012,267
Multi-Sector Holdings–0.20%
Leucadia National Corp.		6,850		199,883
Multi-Utilities–2.95%
Ameren Corp.		6,889		194,201
CenterPoint Energy, Inc.		12,329		193,812
CMS Energy Corp.		10,249		190,631
Consolidated Edison, Inc.		3,965		196,545
Dominion Resources, Inc.		4,596		196,341
DTE Energy Co.		4,312		195,420
Integrys Energy Group, Inc.		3,973		192,730
NiSource Inc.		11,435		201,485
PG&E Corp.		4,068		194,613

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Invesco Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
Multi-Utilities–(continued)
Public Service Enterprise Group Inc.		6,183	$	196,681
SCANA Corp.		4,800		194,880
Sempra Energy		3,728		195,645
TECO Energy, Inc.		11,187		199,129
Wisconsin Energy Corp.		3,308		194,709
Xcel Energy, Inc.		8,245		194,170
				2,930,992
Office Electronics–0.19%
Xerox Corp.		16,653		191,843
Office REIT’s–0.20%
Boston Properties, Inc.		2,353		202,593
Office Services & Supplies–0.39%
Avery Dennison Corp.		4,625		195,823
Pitney Bowes Inc.		7,973		192,787
				388,610
Oil & Gas Drilling–0.81%
Diamond Offshore Drilling, Inc.		3,056		204,355
Helmerich & Payne, Inc.		4,014		194,599
Nabors Industries Ltd. (Bermuda)(b)		8,959		210,178
Rowan Cos., Inc.(b)		5,689		198,603
				807,735
Oil & Gas Equipment & Services–1.22%
Baker Hughes Inc.		3,477		198,780
Cameron International Corp.(b)		3,949		200,333
FMC Technologies, Inc.(b)		2,263		201,203
Halliburton Co.		4,905		200,271
National Oilwell Varco Inc.		3,076		206,861
Schlumberger Ltd.		2,405		200,818
				1,208,266
Oil & Gas Exploration & Production–2.87%
Anadarko Petroleum Corp.		2,964		225,738
Apache Corp.		1,679		200,187
Cabot Oil & Gas Corp.		5,341		202,157
Chesapeake Energy Corp.		8,398		217,592
Denbury Resources Inc.(b)		10,441		199,319
Devon Energy Corp.		2,676		210,093
EOG Resources, Inc.		2,134		195,069
EQT Corp.		4,442		199,179
Newfield Exploration Co.(b)		2,754		198,591
Noble Energy, Inc.		2,300		197,984
Pioneer Natural Resources Co.		2,299		199,599
QEP Resources Inc.		5,330		193,532
Range Resources Corp.		4,581		206,054
Southwestern Energy Co.(b)		5,470		204,742
				2,849,836
Oil & Gas Refining & Marketing–0.63%
Sunoco, Inc.		5,051		203,606
Tesoro Corp.(b)		11,219		208,000
Valero Energy Corp.		9,282		214,600
				626,206
Oil & Gas Storage & Transportation–0.61%
El Paso Corp.		14,823		203,964
Spectra Energy Corp.		8,047		201,095
Williams Cos., Inc. (The)		8,187		202,383
				607,442
Other Diversified Financial Services–0.62%
Bank of America Corp.		15,566		207,650
Citigroup Inc.(b)		41,633		196,924
JPMorgan Chase & Co.		4,932		209,216
				613,790
Packaged Foods & Meats–2.75%
Campbell Soup Co.		5,528		192,098
ConAgra Foods, Inc.		8,700		196,446
Dean Foods Co.(b)		24,277		214,609
General Mills, Inc.		5,378		191,403
H.J. Heinz Co.		3,854		190,619
Hershey Co. (The)		4,051		191,005
Hormel Foods Corp.		3,794		194,480
J. M. Smucker Co. (The)		2,970		194,981
Kellogg Co.		3,818		195,023
Kraft Foods Inc.–Class A		6,127		193,062
McCormick & Co., Inc.		4,101		190,820
Mead Johnson Nutrition Co.		3,129		194,780
Sara Lee Corp.		11,336		198,493
Tyson Foods, Inc.–Class A		11,388		196,101
				2,733,920
Paper Packaging–0.39%
Bemis Co., Inc.		5,911		193,053
Sealed Air Corp.		7,822		199,070
				392,123

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Invesco Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
Paper Products–0.41%
International Paper Co.		7,542	$	205,444
MeadWestvaco Corp.		7,770		203,263
				408,707
Personal Products–0.40%
Avon Products, Inc.		6,784		197,143
Estee Lauder Cos. Inc. (The)–Class A		2,466		199,006
				396,149
Pharmaceuticals–2.15%
Abbott Laboratories		4,042		193,652
Allergan, Inc.		2,763		189,735
Bristol-Myers Squibb Co.		7,385		195,555
Eli Lilly and Co.		5,588		195,804
Forest Laboratories, Inc.(b)		5,981		191,272
Hospira, Inc.(b)		3,405		189,624
Johnson & Johnson		3,128		193,467
Merck & Co., Inc.		5,363		193,283
Mylan Inc.(b)		9,143		193,192
Pfizer Inc.		11,489		201,172
Watson Pharmaceuticals, Inc.(b)		3,790		195,753
				2,132,509
Property & Casualty Insurance–1.59%
ACE Ltd. (Switzerland)		3,204		199,449
Allstate Corp. (The)		6,249		199,218
Berkshire Hathaway Inc.–Class B(b)		2,446		195,949
Chubb Corp. (The)		3,304		197,051
Cincinnati Financial Corp.		6,150		194,893
Progressive Corp. (The)		9,972		198,144
Travelers Cos., Inc. (The)		3,545		197,492
XL Group PLC (Ireland)		9,017		196,751
				1,578,947
Publishing–0.79%
Gannett Co., Inc.		12,640		190,738
McGraw-Hill Cos., Inc. (The)		5,390		196,250
Meredith Corp.		5,517		191,164
Washington Post Co. (The)–Class B		462		203,049
				781,201
Railroads–0.60%
CSX Corp.		3,065		198,030
Norfolk Southern Corp.		3,121		196,061
Union Pacific Corp.		2,145		198,756
				592,847
Real Estate Services–0.20%
CB Richard Ellis Group, Inc.–Class A(b)		9,514		194,847
Regional Banks–2.30%
BB&T Corp.		7,444		195,703
Fifth Third Bancorp		13,906		204,140
First Horizon National Corp.(b)		17,984		211,857
Huntington Bancshares Inc.		31,408		215,773
KeyCorp		23,238		205,656
M&T Bank Corp.		2,364		205,786
Marshall & Ilsley Corp.		28,565		197,670
PNC Financial Services Group, Inc.		3,344		203,048
Regions Financial Corp.		31,357		219,499
SunTrust Banks, Inc.		7,235		213,505
Zions Bancorp.		8,786		212,885
				2,285,522
Research & Consulting Services–0.39%
Dun & Bradstreet Corp. (The)		2,393		196,442
Equifax Inc.		5,457		194,269
				390,711
Residential REIT’s–0.62%
Apartment Investment & Management Co.–Class A		7,980		206,203
AvalonBay Communities, Inc.		1,795		202,027
Equity Residential		3,925		203,904
				612,134
Restaurants–0.77%
Darden Restaurants, Inc.		3,921		182,091
McDonald’s Corp.		2,546		195,431
Starbucks Corp.		5,972		191,880
Yum! Brands, Inc.		3,908		191,688
				761,090
Retail REIT’s–0.42%
Kimco Realty Corp.		11,570		208,723
Simon Property Group, Inc.		2,049		203,855
				412,578
Semiconductor Equipment–0.99%
Applied Materials, Inc.		14,376		201,983
KLA-Tencor Corp.		4,912		189,800
MEMC Electronic Materials, Inc.(b)		17,660		198,852
Novellus Systems, Inc.(b)		5,958		192,562
Teradyne, Inc.(b)		14,107		198,062
				981,259

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Invesco Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
Semiconductors–2.76%
Advanced Micro Devices, Inc.(b)		24,157	$	197,604
Altera Corp.		5,344		190,140
Analog Devices, Inc.		5,219		196,600
Broadcom Corp.,–Class A		4,465		194,451
First Solar, Inc.(b)		1,468		191,045
Intel Corp.		9,117		191,730
Linear Technology Corp.		5,603		193,808
LSI Corp.(b)		32,612		195,346
Microchip Technology Inc.		5,737		196,263
Micron Technology, Inc.(b)		23,834		191,149
National Semiconductor Corp.		14,178		195,089
NVIDIA Corp.(b)		13,616		209,686
Texas Instruments Inc.		6,014		195,455
Xilinx, Inc.		6,935		200,976
				2,739,342
Soft Drinks–0.77%
Coca-Cola Co. (The)		2,977		195,797
Coca-Cola Enterprises Inc.		7,748		193,932
Dr Pepper Snapple Group, Inc.		5,153		181,180
PepsiCo, Inc.		2,965		193,704
				764,613
Specialized Consumer Services–0.18%
H&R Block, Inc.		15,062		179,388
Specialized Finance–0.99%
CME Group Inc.		612		196,911
IntercontinentalExchange Inc.(b)		1,640		195,406
Moody’s Corp.		7,425		197,060
NASDAQ OMX Group, Inc. (The)(b)		8,326		197,409
NYSE Euronext		6,554		196,489
				983,275
Specialized REIT’s–1.45%
HCP, Inc.		5,632		207,201
Health Care REIT, Inc.		4,337		206,615
Host Hotels & Resorts Inc.		11,342		202,681
Plum Creek Timber Co., Inc.		5,497		205,863
Public Storage		1,992		202,028
Ventas, Inc.		3,941		206,824
Weyerhaeuser Co.		10,774		203,952
				1,435,164
Specialty Chemicals–0.80%
Ecolab Inc.		3,907		196,991
International Flavors & Fragrances Inc.		3,550		197,344
Sherwin-Williams Co. (The)		2,396		200,665
Sigma-Aldrich Corp.		2,930		195,021
				790,021
Specialty Stores–0.39%
Staples, Inc.		8,685		197,757
Tiffany & Co.		3,002		186,935
				384,692
Steel–0.98%
AK Steel Holding Corp.		12,019		196,751
Allegheny Technologies, Inc.		3,395		187,336
Cliffs Natural Resources Inc.		2,570		200,485
Nucor Corp.		4,384		192,107
United States Steel Corp.		3,321		194,013
				970,692
Systems Software–1.55%
BMC Software, Inc.(b)		4,054		191,106
CA, Inc.		7,861		192,123
McAfee Inc.(b)		4,219		195,382
Microsoft Corp.(b)		7,040		196,557
Novell, Inc.(b)		32,612		193,063
Oracle Corp.		6,226		194,874
Red Hat, Inc.(b)		4,091		186,754
Symantec Corp.(b)		11,598		194,150
				1,544,009
Thrifts & Mortgage Finance–0.40%
Hudson City Bancorp, Inc.		15,640		199,253
People’s United Financial Inc.		14,376		201,408
				400,661
Tires & Rubber–0.20%
Goodyear Tire & Rubber Co. (The)(b)		16,810		199,198
Tobacco–0.78%
Altria Group, Inc.		7,829		192,750
Lorillard, Inc.		2,374		194,810
Philip Morris International Inc.		3,277		191,803
Reynolds American Inc.		6,043		197,123
				776,486
Trading Companies & Distributors–0.40%
Fastenal Co.		3,272		196,025
W.W. Grainger, Inc.		1,436		198,326
				394,351

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Invesco Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
Trucking–0.20%
Ryder System, Inc.		3,864	$	203,401
Wireless Telecommunication Services–0.61%
American Tower Corp.,–Class A(b)		3,944		203,668
MetroPCS Communications, Inc.(b)		16,198		204,581
Sprint Nextel Corp.(b)		47,037		198,966
				607,215
Total Common Stocks & Other Equity Interests (Cost $51,398,648)				98,818,964
Money Market Funds–0.68%
Liquid Assets Portfolio–Institutional Class(d)		338,979		338,979
Premier Portfolio–Institutional Class(d)		338,979		338,979
Total Money Market Funds (Cost $677,958)				677,958
TOTAL INVESTMENTS–100.18% (Cost $52,076,606)				99,496,922
OTHER ASSETS LESS LIABILITIES–(0.18)%				(181,337	)
NET ASSETS–100.00%			$	99,315,585

Investment Abbreviations:

REIT – Real Estate Investment Trust

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	The Fund’s Adviser is a subsidiary of Invesco Ltd. and therefore, Invesco Ltd. is considered to be affiliated with the Fund. See Note 5.
(d)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Statement of Assets and Liabilities

December 31, 2010

				Invesco V.I.			Invesco V.I.
	Invesco V.I.			Select Dimensions			Select Dimensions
	Select Dimensions			Dividend			Equally-Weighted
	Balanced Fund			Growth Fund			S&P 500 Fund
Assets:
Investments, at value	$	37,451,902		$	85,508,392		$	98,612,313
Investments in affiliates		740,004			4,668,190			884,609
Total investments		38,191,906			90,176,582			99,496,922
Receivables for:
Investments sold		—			88,764			—
Variation margin		1,016			—			—
Dividends and Interest		129,305			148,870			106,441
Other assets		772			1,218			—
Total assets		38,322,999			90,415,434			99,603,363
Liabilities:
Payable for:
Investments purchased		—			154,945			—
Fund shares reacquired		2,058			23,012			63,693
Variation margin		—			—			940
Accrued fees to affiliates		93,667			144,396			171,657
Accrued operating expenses		40,438			31,269			51,056
Trustee deferred compensation and retirement plans		—			405			432
Total liabilities		136,163			354,027			287,778
Net assets applicable to shares outstanding	$	38,186,836		$	90,061,407		$	99,315,585
Net assets consist of:
Shares of beneficial interest	$	36,444,308		$	126,227,516		$	53,383,959
Undistributed net investment income		576,340			1,354,272			1,403,702
Undistributed net realized gain (loss)		(950,341	)		(47,050,765	)		(2,907,642	)
Unrealized appreciation		2,116,529			9,530,384			47,435,566
	$	38,186,836		$	90,061,407		$	99,315,585
Net Assets:
Series I	$	23,699,254		$	69,355,252		$	43,669,269
Series II	$	14,487,582		$	20,706,155		$	55,646,316
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		1,714,710			4,448,003			2,325,292
Series II		1,053,495			1,331,765			3,003,064
Series I:
Net asset value per share	$	13.82		$	15.59		$	18.78
Series II:
Net asset value per share	$	13.75		$	15.55		$	18.53
Cost of Investments	$	35,337,861		$	75,977,061		$	51,211,852
Cost of Investments in affiliates	$	740,004		$	4,668,190		$	864,754
Total Investments, at cost	$	36,077,865		$	80,645,251		$	52,076,606

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Statement of Operations

For the year ended December 31, 2010

				Invesco V.I.			Invesco V.I.
	Invesco V.I.			Select Dimensions			Select Dimensions
	Select Dimensions			Dividend			Equally-Weighted
	Balanced Fund			Growth Fund			S&P 500 Fund
Investment income:
Dividends†	$	545,895		$	2,073,926		$	1,875,072
Dividends from affiliates		684			4,650			4,798
Interest		395,506			—			—
Total investment income		942,085			2,078,576			1,879,870
† Net of foreign withholding taxes		13,985			7,926			156
Expenses:
Advisory fees		206,627			500,961			116,921
Administrative services fees		99,143			190,550			201,733
Custodian fees		9,885			5,557			11,275
Distribution fees — Series II		38,311			53,857			137,699
Transfer agent fees		1,315			1,357			1,347
Trustees’ and officers’ fees and benefits		10,307			14,105			9,436
Professional services fees		48,615			36,959			32,041
Other		24,449			9,149			13,250
Total expenses		438,652			812,495			523,702
Less: Fees waived		(71,481	)		(97,025	)		(52,573	)
Net expenses		367,171			715,470			471,129
Net investment income		574,914			1,363,106			1,408,741
Realized and unrealized gain (loss) from:
Net realized gain (losses) from:
Investment securities (includes net gains (losses) from securities sold to affiliates of $438, $(2,924,687) and $0, respectively)		2,231,441			1,750,137			8,669,505
Foreign currencies		—			(8,357	)		—
Futures contracts		(18,430	)		—			76,343
Option contracts written		—			18,761			—
		2,213,011			1,760,541			8,745,848
Change in net unrealized appreciation (depreciation) of:
Investment securities		1,037,730			5,912,303			8,587,621
Foreign currencies		—			(947	)		—
Futures contracts		(19,310	)		—			25,614
Option contracts written		—			(3,124	)		—
Swap agreements		(38	)		—			—
		1,018,382			5,908,232			8,613,235
Net realized and unrealized gain		3,231,393			7,668,773			17,359,083
Net increase in net assets resulting from operations	$	3,806,307		$	9,031,879		$	18,767,824

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco V.I. Select Dimensions Funds

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

							Invesco V.I.						Invesco V.I.
	Invesco V.I.						Select Dimensions						Select Dimensions
	Select Dimensions						Dividend						Equally-Weighted
	Balanced Fund						Growth Fund						S&P 500 Fund
	2010			2009			2010			2009			2010			2009
Operations:
Net investment income	$	574,914		$	730,484		$	1,363,106		$	1,545,831		$	1,408,741		$	1,385,144
Net realized gain (loss)		2,213,011			(194,630	)		1,760,541			(8,551,653	)		8,745,848			(7,590,340	)
Change in net unrealized appreciation		1,018,382			6,485,933			5,908,232			26,820,219			8,613,235			39,237,550
Net increase in net assets resulting from operations		3,806,307			7,021,787			9,031,879			19,814,397			18,767,824			33,032,354
Distributions to shareholders from net investment income:
Series I		(509,670	)		(750,282	)		(1,223,469	)		(1,414,595	)		(629,718	)		(960,460	)
Series II		(286,007	)		(437,618	)		(321,048	)		(386,002	)		(710,006	)		(1,118,274	)
Total distributions from net investment income		(795,677	)		(1,187,900	)		(1,544,517	)		(1,800,597	)		(1,339,724	)		(2,078,734	)
Distributions to shareholders from net realized gains:
Series I		—			—			—			—			—			(1,537,281	)
Series II		—			—			—			—			—			(2,093,569	)
Total distributions from net realized gains		—			—			—			—			—			(3,630,850	)
Share transactions–net:
Series I		(4,132,965	)		(2,832,832	)		(12,366,018	)		(15,204,477	)		(7,540,299	)		(5,014,093	)
Series II		(2,861,029	)		(3,103,936	)		(4,382,589	)		(5,269,866	)		(11,702,914	)		(4,439,590	)
Net increase (decrease) in net assets resulting from share transactions		(6,993,994	)		(5,936,768	)		(16,748,607	)		(20,474,343	)		(19,243,213	)		(9,453,683	)
Net increase (decrease) in net assets		(3,983,364	)		(102,881	)		(9,261,245	)		(2,460,543	)		(1,815,113	)		17,869,087
Net assets:
Beginning of year		42,170,200			42,273,081			99,322,652			101,783,195			101,130,698			83,261,611
End of year*	$	38,186,836		$	42,170,200		$	90,061,407		$	99,322,652		$	99,315,585		$	101,130,698
* Includes accumulated undistributed net investment income	$	576,340		$	783,495		$	1,354,272		$	1,544,040		$	1,403,702		$	1,361,039

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”) is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of forty-one separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The Funds covered in this report are Invesco V.I. Select Dimensions Balanced Fund, Invesco V.I. Select Dimensions Dividend Growth Fund and Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund (each “Fund” or collectively, the “Funds”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Funds. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, V.I. Select Dimensions Balanced Fund, V.I. Select Dimensions Dividend Growth Fund and V.I. Select Dimensions Equally Weighted S&P 500 Fund operated as Morgan Stanley Select Dimensions Balanced Fund, Morgan Stanley Select Dimensions Dividend Growth Fund and Morgan Stanley Select Dimensions Equally-Weighted S&P 500 Fund, respectively (each “Acquired Fund”) as a separate portfolio of Morgan Stanley Select Dimensions Investment Series. Each Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to V.I. Select Dimensions Balanced Fund, V.I. Select Dimensions Dividend Growth Fund, and V.I. Select Dimensions Equally Weighted S&P 500 Fund, respectively (the “Reorganization”).

Invesco V.I. Select Dimensions Funds

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class X and Y shares received Series I and II shares, respectively, of each corresponding Fund. Information for the Acquired Fund’s — Class X and Y shares prior to the Reorganization is included with Series I and II shares, respectively of each Fund throughout this report.

  The investment objective’s: to provide capital growth with reasonable current income for Invesco V.I. Select Dimensions Balanced Fund; to provide reasonable current income and long-term growth of income and capital for Invesco V.I. Select Dimensions Dividend Growth Fund; and to achieve a high level of total return on its assets through a combination of capital appreciation and current income for Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund.

  Each Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Funds in the preparation of their financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Funds may periodically participate in litigation related to Fund investments. As such, each 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.

Invesco V.I. Select Dimensions Funds

	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	Each Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Funds intend to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Funds 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 Funds file tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Funds are 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 Funds and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, each Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Funds enter into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. Each Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Funds may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
J.	Foreign Currency Contracts — The Funds may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Funds may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
K.	Futures Contracts — The Funds may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or

Invesco V.I. Select Dimensions Funds

	delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Funds currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities.
L.	Call Options Written — The Funds may write call options, including options on futures. A call option gives the purchaser of such option the right to buy, and the writer (the Fund) the obligation to sell, the underlying security at the stated exercise price during the option period. Written call options are recorded as a liability in the Statement of Assets and Liabilities. The amount of the liability is subsequently “marked-to-market” to reflect the current market value of the option written. If a written call option expires on the stipulated expiration date, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or a loss if the closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written option is exercised, the Fund realizes a gain or a loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received. Realized gains and losses on these contracts are included in the Statement of Operations. A risk in writing a 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.
	An option on a futures contract gives the holder the right to receive a cash “exercise settlement amount” equal to the difference between the exercise price of the option and the value of the underlying futures contract on the exercise date. The value of a futures contract fluctuates with changes in the market values of the securities underlying the futures contract. In writing covered futures contract options, the principal risk is that the Fund could bear a loss on the options that would be only partially offset (or not offset at all) by the increased value or reduced cost of underlying portfolio securities. Risks may exceed amounts recognized in the Statement of Assets and Liabilities.
M.	Collateral — To the extent each Fund has pledged or segregated a security as collateral and that security is subsequently sold, it is such Fund’s practice to replace such collateral no later than the next business day.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, each Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Invesco V.I. Select Dimensions Balanced Fund

Average Net Assets	Rate
First $500 million		0	.52%
Over $500 million		0	.495%

Invesco V.I. Select Dimensions Dividend Growth Fund

Average Net Assets	Rate
First $250 million		0	.545%
Next $750 million		0	.42%
Next $1 billion		0	.395%
Over $2 billion		0	.37%

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

Average Net Assets	Rate
First $2 billion		0	.12%
Over $2 billion		0	.10%

Invesco V.I. Select Dimensions Funds

  Prior to the Reorganization, the Acquired Fund paid an advisory fee to Morgan Stanley Investment Advisors Inc. (“MSIA”) based on the annual rates above of the Acquired Fund’s average daily net assets as shown in the table below:

Invesco V.I. Select Dimensions Balanced Fund	$	90,265
Invesco V.I. Select Dimensions Dividend Growth Fund		219,791
Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund		50,210

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed, through at least June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Series I and Series II shares of each Fund as shown in the following table:

	Series I			Series II
Invesco V.I. Select Dimensions Balanced Fund		0.82	%		1.07	%
Invesco V.I. Select Dimensions Dividend Growth Fund		0.72	%		0.97	%
Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund		0.37	%		0.62	%

  In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by each Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by such Fund of uninvested cash in such affiliated money market funds. Prior to the Reorganization, investment advisory fees paid by each Acquired Fund were reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class shares.

  For the year ended December 31, 2010, the Adviser waived advisory fees and /or reimbursed Fund expenses in the following amounts:

	Paid to Adviser		Paid to MSIA
Invesco V.I. Select Dimensions Balanced Fund	$	70,756	$	725
Invesco V.I. Select Dimensions Dividend Growth Fund		96,622		403
Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund		52,293		280

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which each Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to such Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, each Fund for the year ended December 31, 2010, paid Invesco for accounting and fund administrative services and reimbursed for services provided by insurance companies as shown in the following table:

					Paid to insurance
	Paid to Invesco		MSSCI		companies
Invesco V.I. Select Dimensions Balanced Fund	$	29,315	$	13,887	$	55,941
Invesco V.I. Select Dimensions Dividend Growth Fund		29,315		32,266		128,969
Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund		29,315		33,473		138,945

  Prior to the reorganization, each Acquired Fund paid an administration fee to the Morgan Stanley Services Company, Inc. (“MSSCI”).

  Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian, fund accountant and provides certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which each Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to such Fund and reimburse IIS for certain expenses incurred by IIS in the course of

Invesco V.I. Select Dimensions Funds

providing such services. Prior to the Reorganization, each Acquired Fund paid Morgan Stanley Trust, which served as each Acquired Fund’s transfer agent as shown in the following table:

Invesco V.I. Select Dimensions Balanced Fund	$	—
Invesco V.I. Select Dimensions Dividend Growth Fund		501
Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund		212

  For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to such Fund’s Series II shares (the “Plan”). Each Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of such Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of such Fund. Prior to the Reorganization, each Acquired Fund paid Morgan Stanley Distributors Inc. based on the annual rate of 0.25% of such Acquired Fund’s average daily net assets of Class Y shares as shown in the following table:

Invesco V.I. Select Dimensions Balanced Fund	$	16,714
Invesco V.I. Select Dimensions Dividend Growth Fund		23,339
Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund		71,465

  For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

Invesco V.I. Select Dimensions Balanced Fund

	Level 1		Level 2		Level 3		Total
Equity Securities	$	25,419,864	$	245,604	$	—	$	25,665,468
U.S. Treasury Securities		—		6,704,311		—		6,704,311
Corporate Debt Securities		—		5,013,794		—		5,013,794
U.S. Government Sponsored Securities		—		615,089		—		615,089
Foreign Government Debt Securities		—		158,621		—		158,621
Municipal Obligations		—		34,623		—		34,623
	$	25,419,864	$	12,772,042	$	—	$	38,191,906
Futures*		2,488		—		—		2,488
Total Investments	$	25,422,352	$	12,772,042	$	—	$	38,194,394

*  Unrealized appreciation.

Invesco V.I. Select Dimensions Funds

Invesco V.I. Select Dimensions Dividend Growth Fund

	Level 1		Level 2		Level 3		Total
Equity Securities	$	87,821,105	$	2,355,477	$	—	$	90,176,582

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

	Level 1		Level 2		Level 3		Total
Equity Securities	$	99,496,922	$	—	$	—	$	99,496,922
Futures*		15,251		—		—		15,251
Total Investments	$	99,512,173	$	—	$	—	$	99,512,173

*  Unrealized appreciation.

NOTE 4—Derivative Investments

The Funds have implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Value of Derivative Instruments at Period-End

The tables below summarize the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2010:

Invesco V.I. Select Dimensions Balanced Fund

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Interest rate risk
Futures contracts(a)	$	17,630	$	(15,142	)

^(a) Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets & Liabilities.

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Interest rate risk
Futures contracts(a)	$	16,714	$	(1,463	)

^(a) Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets & Liabilities.

Effect of Derivative Instruments for the year ended December 31, 2010

The tables below summarize the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

Invesco V.I. Select Dimensions Balanced Fund

	Location of Gain (Loss) on
	Statement of Operations
	Futures*			Swap Agreements*
Realized Gain (Loss)
Interest rate risk	$	(18,430	)	$	—
Change in Unrealized Appreciation (Depreciation)
Credit risk	$	—		$	(38	)
Interest rate risk		(19,310	)		—
Total	$	(37,740	)	$	(38	)

*  The average value of futures and swap agreements outstanding during the period was $2,331,571 and $6,667, respectively.

Invesco V.I. Select Dimensions Funds

Invesco V.I. Select Dimensions Dividend Growth Fund

	Location of Gain (Loss) on
	Statement of Operations
	Options*
Realized Gain
Equity risk	$	18,761
Change in Unrealized Appreciation (Depreciation)
Equity risk	$	(3,124	)
Total	$	15,637

*  The average value of options outstanding during the period was $1,092.

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

	Location of Gain (Loss) on
	Statement of Operations
	Futures*
Realized Gain
Interest rate risk	$	76,343
Change in Unrealized Appreciation
Interest rate risk	$	25,614
Total	$	101,957

*  The average value of futures outstanding during the period was $928,109.

Invesco V.I. Select Dimensions Balanced Fund

Open Futures Contracts
								Unrealized
	Number of		Month/					Appreciation
Contract	Contracts		Commitment		Value			(Depreciation)
U.S. Treasury 30 Year Bonds		3		March-2011/Long	$	366,375		$	(10,834	)
U.S. Treasury 10 Year Notes		1		March-2011/Long		120,438			(4,307	)
Subtotal					$	486,813		$	(15,141	)
U.S. Treasury 5 Year Notes		9		March-2011/Short		(1,059,469	)		17,629
Total					$	(572,656	)	$	2,488

Invesco V.I. Select Dimensions Funds

Invesco V.I. Select Dimensions Dividend Growth Fund

Option Contracts Written Transactions During the Period
	Number of
	Contracts			Premium
Options written, outstanding at beginning of period		22		$	4,422
Options written		192			41,002
Options expired		(122	)		(28,098	)
Options closed		(92	)		(17,326	)
Options written, outstanding at end of period		—		$	—

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

Open Futures Contracts
	Number of		Month/				Unrealized
Contract	Contracts		Commitment		Value		Appreciation
E-Mini S&P 500 Index		13		March-2011/Long	$	814,450	$	15,251

NOTE 5—Investments in Other Affiliates

The Investment Company Act of 1940 defines affiliates as those issuances in which a fund holds 5% or more of the outstanding voting securities. V.I. Select Dimensions Equally-Weighted S&P 500 Fund has not owned enough of the outstanding voting securities of the issuer to have control (as defined in the Investment Company Act of 1940) of that issuer. The following is a summary of the investments in affiliates for the year ended December 31, 2010.

								Change in
	Value		Purchases		Proceeds			Unrealized		Realized			Value		Dividend
	12/31/09		at Cost		from Sales			Appreciation		Gain (Loss)			12/31/10		Income
Invesco Ltd.	$	210,705	$	28,651	$	(37,001	)	$	12,036	$	(7,740	)	$	206,651	$	4,027

NOTE 6—Security Transactions with Affiliated Funds

Each Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by each Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. For the year ended December 31, 2010, each Fund engaged in transactions with affiliates as listed below:

	Securities				Net Realized
	Purchases		Securities Sales		Gains/(Losses)
Invesco V.I. Select Dimensions Balanced Fund	$	20,385	$	2,265	$	438
Invesco V.I. Select Dimensions Dividend Growth Fund		993,302		5,341,838		(2,924,687	)
Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund		—		—		—

NOTE 7—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Funds in aggregate paid legal fees of $1,892 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees as shown below. A member of that firm is a Trustee of the Trust.

Invesco V.I. Select Dimensions Funds

NOTE 8—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 9—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010						2009
			Long-term						Long-term
	Ordinary		Capital		Total		Ordinary		Capital		Total
	Income		Gain		Distributions		Income		Gain		Distributions
Invesco V.I. Select Dimensions Balanced Fund	$	795,677	$	—	$	795,677	$	1,187,900	$	—	$	1,187,900
Invesco V.I. Select Dimensions Dividend Growth Fund		1,544,517		—		1,544,517		1,800,597		—		1,800,597
Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund		1,339,724		—		1,339,724		2,078,765		3,630,819		5,709,584

Tax Components of Net Assets at Period-End:

					Net Unrealized
	Undistributed		Net Unrealized		Appreciation			Temporary									Shares of		Total
	Ordinary		Appreciation		(Depreciation) -			Book/Tax			Capital Loss			Post-October			Beneficial		Net
	Income		Investments		Other Investments			Differences			Carryforward			Deferrals			Interest		Assets
Invesco V.I. Select Dimensions Balanced Fund	$	608,480	$	1,979,109	$	—		$	(993	)	$	(844,068	)	$	—		$	36,444,308	$	38,186,836
Invesco V.I. Select Dimensions Dividend Growth Fund		1,356,152		9,531,331		(947	)		(405	)		(47,050,765	)		(1,475	)		126,227,516		90,061,407
Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund		1,371,321		45,230,994		—			(432	)		(670,257	)		—			53,383,959		99,315,585

  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 Funds net unrealized appreciation differences are attributable primarily to wash sales, bond premiums and straddles.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Funds 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 Funds 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 Funds utilized capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes as follows:

	Capital Loss
	Carryforward
	Utilized
Invesco V.I. Select Dimensions Balanced Fund	$	2,218,719
Invesco V.I. Select Dimensions Dividend Growth Fund		627,940
Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund		8,518,615

  The Funds have a capital loss carryforward as of December 31, 2010 which expires as follows:

	2011*		2016*		2017*		Total
Invesco V.I. Select Dimensions Balanced Fund	$	—	$	—	$	844,068	$	844,068
Invesco V.I. Select Dimensions Dividend Growth Fund		21,221,549		7,857,133		17,972,083		47,050,765
Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund		—		—		670,257		670,257

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

Invesco V.I. Select Dimensions Funds

NOTE 10—Investment Securities

	For the year ended December 31,				At December 31, 2010
	2010*				Federal Tax			Unrealized		Unrealized			Net Unrealized
	Purchases		Sales		Cost**			Appreciation		(Depreciation)			Appreciation
Invesco V.I. Select Dimensions Balanced Fund	$	13,882,694	$	19,992,883	$	36,212,797		$	3,126,609	$	(1,147,500	)	$	1,979,109
Invesco V.I. Select Dimensions Dividend Growth Fund		68,896,534		89,418,960		80,645,251	***		10,658,355		(1,127,024	)		9,531,331
Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund		20,525,040		39,295,261		54,265,928			45,782,294		(551,300	)		45,230,994

*	Excludes U.S. Treasury obligations and money market funds, if any.
**	Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period end.
***	Cost of investments is the same for tax and financial statement purposes.

NOTE 11—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of bond premium amortization, foreign currencies and expired capital loss carryforward, on December 31, 2010, the following reclassifications were made to each Fund. These reclassifications had no effect on the net assets of each Fund.

				Undistributed Net
	Undistributed Net			Realized			Shares of
	Investment Income			Gain (Loss)			Beneficial Interest
Invesco V.I. Select Dimensions Balanced Fund	$	13,608		$	(10,876	)	$	(2,732	)
Invesco V.I. Select Dimensions Dividend Growth Fund		(8,357	)		37,037,327			(37,028,970	)
Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund		(26,354	)		26,354			—

NOTE 12—Share Information

Invesco V.I. Select Dimensions Balanced Fund

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		7,971		$	103,298			205,613		$	2,288,162
Series II		27,367			360,964			32,359			351,813
Issued as reinvestment of dividends:
Series I		40,482			509,670			69,989			750,282
Series II		22,807			286,007			40,975			437,618
Reacquired:
Series I		(363,972	)		(4,745,933	)		(527,590	)		(5,871,276	)
Series II		(270,698	)		(3,508,000	)		(349,414	)		(3,893,367	)
Net increase (decrease) in share activity		(536,043	)	$	(6,993,994	)		(528,068	)	$	(5,936,768	)

Invesco V.I. Select Dimensions Funds

NOTE 12—Share Information—(continued)

Invesco V.I. Select Dimensions Dividend Growth Fund

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		40,486		$	595,439			65,164		$	821,495
Series II		19,130			272,480			57,615			653,317
Issued as reinvestment of dividends:
Series I		87,641			1,223,469			119,678			1,414,595
Series II		23,031			321,048			32,712			386,002
Reacquired:
Series I		(975,783	)		(14,184,926	)		(1,465,877	)		(17,440,567	)
Series II		(343,764	)		(4,976,117	)		(532,525	)		(6,309,185	)
Net increase (decrease) in share activity		(1,149,259	)	$	(16,748,607	)		(1,723,233	)	$	(20,474,343	)

Invesco V.I. Select Dimensions Equally Weighted S&P 500 Fund

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		36,273		$	613,769			85,681		$	1,108,596
Series II		70,709			1,148,335			143,074			1,655,307
Issued as reinvestment of dividends:
Series I		39,137			629,719			205,238			2,497,741
Series II		44,654			710,006			267,208			3,211,843
Reacquired:
Series I		(525,472	)		(8,783,787	)		(687,136	)		(8,620,430	)
Series II		(829,357	)		(13,561,255	)		(749,130	)		(9,306,740	)
Net increase (decrease) in share activity		(1,164,056	)	$	(19,243,213	)		(735,065	)	$	(9,453,683	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of each Fund and in the aggregate own 97%, 99% and 91% of the outstanding shares of Invesco V.I. Select Dimensions Balanced Fund, Invesco V.I. Select Dimensions Dividend Growth Fund and Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund, respectively. The Funds and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Funds. The Funds, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Funds, for providing services to the Funds, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco V.I. Select Dimensions Funds

NOTE 13—Financial Highlights

The following schedule presents financial highlights for a share of each Fund outstanding throughout the periods indicated.

Invesco V.I. Select Dimensions Balanced Fund

																												Ratio of			Ratio of
						Net gains																						expenses			expenses
						(losses)																						to average			to average net						Ratio of net
	Net asset					on securities						Dividends			Distributions													net assets			assets without						investment
	value,		Net			(both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			Rebate			income
	beginning		investment			realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			from			to average			Portfolio
	of period		income(a)			unrealized)			operations			income			gains			Distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			affiliates			net assets			turnover(c)
Series I
Year ended 12/31/10	$	12.79	$	0.20		$	1.10		$	1.30		$	(0.27	)	$	—		$	(0.27	)	$	13.82		10.37	%	$	23,699		0.83	%(d)		1.01	%(d)		—	%		1.54	%(d)		36	%
Year ended 12/31/09		11.05		0.22			1.87			2.09			(0.35	)		—			(0.35	)		12.79		19.48			25,961		0.82	(e)		0.82	(e)		0.01			1.91	(e)		77
Year ended 12/31/08		16.40		0.36			(3.77	)		(3.41	)		(0.11	)		(1.83	)		(1.94	)		11.05		(22.51	)		25,225		0.84	(e)		0.84	(e)		0.01			2.65	(e)		65
Year ended 12/31/07		17.57		0.42			0.28			0.70			(0.45	)		(1.42	)		(1.87	)		16.40		3.86			42,488		0.78			0.78			—			2.44			86
Year ended 12/31/06		16.88		0.41	��		1.60			2.01			(0.44	)		(0.88	)		(1.32	)		17.57		12.67			54,204		0.74			0.74			—			2.42			45
Series II
Year ended 12/31/10		12.72		0.17			1.10			1.27			(0.24	)		—			(0.24	)		13.75		10.15			14,488		1.08	(d)		1.26	(d)		—	%		1.29	(d)		36
Year ended 12/31/09		11.00		0.19			1.85			2.04			(0.32	)		—			(0.32	)		12.72		19.07			16,210		1.07	(e)		1.07	(e)		0.01			1.66	(e)		77
Year ended 12/31/08		16.36		0.33			(3.76	)		(3.43	)		(0.10	)		(1.83	)		(1.93	)		11.00		(22.64	)		17,048		1.09	(e)		1.09	(e)		0.01			2.40	(e)		65
Year ended 12/31/07		17.52		0.38			0.29			0.67			(0.41	)		(1.42	)		(1.83	)		16.36		3.60			27,535		1.03			1.03			—			2.19			86
Year ended 12/31/06		16.84		0.37			1.59			1.96			(0.40	)		(0.88	)		(1.28	)		17.52		12.37			30,562		0.99			0.99			—			2.17			45

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s) of $24,412 and $15,324 for Series I and Series II shares, respectively.
(e)	The ratios reflect the rebate of certain Fund expenses in connection with investments in an affiliated during the period. The effect of the rebate on the ratios is disclosed in the above table as “Rebate from affiliate”.

Invesco V.I. Select Dimensions Dividend Growth Fund

																					Ratio of			Ratio of
					Net gains																expenses			expenses
					(losses)																to average			to average net						Ratio of net
	Net asset				on securities						Dividends										net assets			assets without						investment
	value,		Net		(both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			Rebate			income
	beginning		investment		realized and			investment			investment			value, end		Total			end of period		and/or expenses			and/or expenses			from			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			of period		return(b)			(000s omitted)		absorbed			absorbed			affiliates			net assets			turnover(c)
Series I
Year ended 12/31/10	$	14.34	$	0.22	$	1.28		$	1.50		$	(0.25	)	$	15.59		10.67	%	$	69,355		0.72	%(d)		0.83	%(d)		—	%		1.54	%(d)		78	%
Year ended 12/31/09		11.77		0.21		2.61			2.82			(0.25	)		14.34		24.39			75,962		0.72	(e)		0.72	(e)		0.00	(f)		1.72	(e)		44
Year ended 12/31/08		18.64		0.26		(7.06	)		(6.80	)		(0.07	)		11.77		(36.60	)		77,428		0.71	(e)		0.71	(e)		0.01			1.63	(e)		61
Year ended 12/31/07		18.09		0.22		0.55			0.77			(0.22	)		18.64		4.27			153,676		0.67			0.67			—			1.18			48
Year ended 12/31/06		16.48		0.22		1.62			1.84	��		(0.23	)		18.09		11.25			201,169		0.67			0.67			—			1.31			115
Series II
Year ended 12/31/10		14.30		0.19		1.27			1.46			(0.21	)		15.55		10.41			20,706		0.97	(d)		1.08	(d)		—			1.29	(d)		78
Year ended 12/31/09		11.73		0.18		2.60			2.78			(0.21	)		14.30		24.11			23,361		0.97	(e)		0.97	(e)		0.00	(f)		1.47	(e)		44
Year ended 12/31/08		18.61		0.22		(7.04	)		(6.82	)		(0.06	)		11.73		(36.76	)		24,355		0.96	(e)		0.96	(e)		0.01			1.38	(e)		61
Year ended 12/31/07		18.07		0.17		0.55			0.72			(0.18	)		18.61		3.95			49,021		0.92			0.92			—			0.93			48
Year ended 12/31/06		16.45		0.18		1.62			1.80			(0.18	)		18.07		10.98			54,255		0.92			0.92			—			1.06			115

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s) of $70,377 and $21,543 for Series I and Series II shares, respectively.
(e)	The ratios reflect the rebate of certain Fund expenses in connection with investments in an affiliated during the period. The effect of the rebate on the ratios is disclosed in the above table as “Rebate from affiliate”.
(f)	Amount is less than 0.005%

Invesco V.I. Select Dimensions Funds

NOTE 13—Financial Highlights—(continued)

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

																											Ratio of			Ratio of
					Net gains																						expenses			expenses
					(losses)																						to average			to average net						Ratio of net
	Net asset				on securities						Dividends			Distributions													net assets			assets without						investment
	value,		Net		(both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			Rebate			income
	beginning		investment		realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			from			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			Distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			affiliates			net assets			turnover(c)
Series I
Year ended 12/31/10	$	15.69	$	0.26	$	3.07		$	3.33		$	(0.24	)	$	—		$	(0.24	)	$	18.78		21.51	%	$	43,669		0.35	%(d)		0.40	%(d)		—			1.59	%(d)		21	%
Year ended 12/31/09		11.61		0.22		4.75			4.97			(0.34	)		(0.55	)		(0.89	)		15.69		45.08			43,553		0.37	(e)		0.37	(e)		0.00	(f)		1.72	(e)		13
Year ended 12/31/08		25.37		0.32		(8.73	)		(8.41	)		(0.45	)		(4.90	)		(5.35	)		11.61		(40.02	)		36,814		0.31	(e)		0.31	(e)		0.00	(f)		1.70	(e)		32
Year ended 12/31/07		27.75		0.41		0.20			0.61			(0.42	)		(2.57	)		(2.99	)		25.37		1.47			77,688		0.28			0.28			—			1.48			17
Year ended 12/31/06		25.71		0.37		3.45			3.82			(0.34	)		(1.44	)		(1.78	)		27.75		15.69			103,824		0.27			0.27			—			1.40			17
Series II
Year ended 12/31/10		15.49		0.22		3.03			3.25			(0.21	)		—			(0.21	)		18.53		21.19			55,646		0.60	(d)		0.65	(d)		—			1.34	(d)		21
Year ended 12/31/09		11.45		0.19		4.69			4.88			(0.29	)		(0.55	)		(0.84	)		15.49		44.79			57,578		0.62	(e)		0.62	(e)		0.00	(f)		1.47	(e)		13
Year ended 12/31/08		25.08		0.27		(8.63	)		(8.36	)		(0.37	)		(4.90	)		(5.27	)		11.45		(40.19	)		46,447		0.56	(e)		0.56	(e)		0.00	(f)		1.45	(e)		32
Year ended 12/31/07		27.47		0.34		0.19			0.53			(0.35	)		(2.57	)		(2.92	)		25.08		1.23			99,861		0.53			0.53			—			1.23			17
Year ended 12/31/06		25.48		0.30		3.42			3.72			(0.29	)		(1.44	)		(1.73	)		27.47		15.34			112,897		0.52			0.52			—			1.15			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. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s) of $42,347 and $55,088 for Series I and Series II shares, respectively.
(e)	The ratios reflect the rebate of certain Fund expenses in connection with investments in an affiliated during the period. The effect of the rebate on the ratios is disclosed in the above table as “Rebate from affiliate”.
(f)	Amount is less than 0.005%

NOTE 14—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Invesco V.I. Select Dimensions Balanced Fund and Invesco V.I. Select Dimensions Dividend Growth Fund (the “Target Funds”) would transfer all of their assets and liabilities to the Invesco Van Kampen V.I. Equity and Income Fund and Invesco V.I. Dividend Growth Fund, respectively, (each an “Acquiring Fund”) in exchange for shares of each respective Acquiring Fund. The Agreement requires approval of each of the Target Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

Invesco V.I. Select Dimensions Funds

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund,

Invesco V.I. Select Dimensions Dividend Growth Fund and Invesco V.I. Select Dimensions Balanced Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund, Invesco V.I. Select Dimensions Dividend Growth Fund and Invesco V.I. Select Dimensions Balanced Fund (formerly known as Morgan Stanley V.I. Select Dimensions Equally-Weighted S&P 500 Fund, Morgan Stanley V.I. Select Dimensions Dividend Growth Fund and Morgan Stanley V.I. Select Dimensions Balanced Fund), three of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Funds” at December 31, 2010, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Funds for the year ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 26, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco V.I. Select Dimensions Funds

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

Invesco V.I. Select Dimensions Balanced Fund

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,150.70	$	4.45	$	1,021.07	$	4.18		0.82	%
Series II		1,000.00		1,149.70		5.80		1,019.81		5.45		1.07

Invesco V.I. Select Dimensions Dividend Growth Fund

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	929.90	$	3.46	$	1,021.62	$	3.63		0.71	%
Series II		1,000.00		928.70		4.67		1,020.36		4.90		0.96

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,260.40	$	2.11	$	1,023.34	$	1.89		0.37	%
Series II		1,000.00		1,258.80		3.53		1,022.08		3.16		0.62

1	The actual ending account value is based on the actual total return of the Funds for the period July 1, 2010 through December 31, 2010, after actual expenses and will differ from the hypothetical ending account value which is based on each Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to each 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.

Invesco V.I. Select Dimensions Funds

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 advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Funds designate the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended December 31, 2010:

	Corporate
	Dividends
	Received		U.S. Treasury
Federal and State Income Tax	Deduction*		Obligations*
Invesco V.I. Select Dimensions Balanced Fund		62.65%		13.83%
Invesco V.I. Select Dimensions Dividend Growth Fund		100.00%		0.00%
Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund		100.00%		0.00%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco V.I. Select Dimensions Funds

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco Van Kampen V.I. Capital Growth Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VK-VICGR-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

On June 25, 2010, Erik Voss and Ido Cohen joined the Fund’s management team. A listing of your Fund’s managers appears later in this report.

     For the 12 months ended December 31, 2010, Invesco Van Kampen V.I. Capital Growth Fund, excluding variable product issuer charges, posted positive double-digit returns and outperformed the Fund’s benchmark, the Russell 1000 Growth Index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	19.84	%
Series II Shares	19.56
Russell 1000 Growth Index▼ (Broad Market/Style-Specific Index)	16.71

^▼Lipper Inc.

How we invest

We believe a growth investment strategy is an essential component of a diversified portfolio.

     Our investment process emphasizes rigorous bottom-up analysis of individual companies. We seek to invest in companies with strong or improving fundamentals, attractive valuation relative to growth prospects and earnings expectations that appear fair to conservative.

     To narrow our investment universe, we utilize a holistic approach that emphasizes fundamental research and, to a lesser extent, includes quantitative analysis. At the end of this distillation process, we have a set of stocks to analyze in greater depth.

     Our fundamental analysis focuses on identifying companies with strong drivers of growth. To accomplish this goal, we conduct rigorous bottom-up analysis in order to develop higher conviction in each company’s prospects for growth. Through our analysis, we develop a mosaic of each company through detailed discussions with company management teams, competitors, distributors, suppliers, Wall Street analysts, and customers. We also utilize a variety of valuation techniques based on the company in question, the

industry in which the company operates, the stage of the business cycle, and other factors that best reflect a company’s value.

     Risk management plays an important role in portfolio construction, as our target portfolio attempts to maximize the relationship between risk and return. We seek to accomplish this goal by investing in companies with attractive fundamental prospects for growth, and we divide the portfolio between stable growth stocks and catalyst-driven stocks.

     We consider selling a stock for any of the following reasons:

n	The price target set at purchase has been reached.
n	There is deterioration in fundamentals.
n	The catalysts for growth are no longer present or are reflected in the stock price.
n	There is a more attractive investment opportunity.

Market conditions and your Fund

The U.S. economy showed signs of improvement during the Fund’s fiscal year, potentially indicating that the economy has transitioned from a contraction phase into an expansionary phase. Nevertheless, the pace of

recovery remained modest and the transition from government stimulus-induced growth to private economic recovery was uncertain.

     The U.S. Federal Reserve’s (the Fed) federal funds target rate remained low ranging from zero to 0.25%.¹ Real gross domestic product (GDP) registered positive growth during the reporting period with annualized increases of 3.7%, 1.7% and 2.6% in the first, second and third quarters of 2010, respectively.² Inflation, measured by the seasonally-adjusted Consumer Price Index, remained relatively benign. While labor markets improved as layoffs moderated, new hiring remained quite weak. Unemployment, after climbing steadily throughout 2009, fell slightly during 2010 to a rate of 9.4% nationwide as of December 2010.³

     While stock market volatility increased significantly during the fiscal year, indexes measuring the performance of large-, mid- and small-cap stocks finished the reporting period with positive, double-digit returns.⁴ In terms of investment style, growth stocks outperformed value stocks. Sectors with the highest returns in the Russell 1000 Growth Index included more economically sensitive sectors such as consumer discretionary, industrials, materials and telecommunication services. Conversely, the health care and utilities sectors had the lowest returns but were still in positive territory for the year.

     The Fund had positive returns and outperformed the Russell 1000 Growth Index for the reporting period. Outperformance was driven primarily by stock selection in the information technology (IT) and consumer discretionary sectors. Over the course of the fiscal year, the Fund outperformed by the widest margin in the IT sector, largely due to stock selection. The leading contributor to Fund performance was

Portfolio Composition

By sector

Information Technology	36.6	%
Consumer Discretionary	15.5
Industrials	12.8
Health Care	12.7
Energy	12.0
Materials	12.0
Financials	5.5
Telecommunication Services	2.5
Consumer Staples	1.0
Liabilities in Excess of Other Assets	-10.6

Top 10 Equity Holdings*

1.	Apple, Inc.	8.1	%
2.	Monsanto Co.	4.1
3.	Visa, Inc.	3.4
4.	Potash Corp. of Saskatchewan, Inc.	3.0
5.	Google, Inc.	2.9
6.	Oracle Corp.	2.8
7.	EMC Corp.	2.6
8.	Baidu, Inc.	2.6
9.	Rovi Corp.	2.4
10.	Goodrich Corp.	2.3

Total Net Assets	$184.8 million
Total Number of Holdings*		75

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.

Invesco Van Kampen V.I. Capital Growth Fund

Apple. Apple continued to benefit from strong consumer demand for its innovative technology products, including the iPad tablet computer as well as a new version of the iPhone. Chinese Internet search engine provider Baidu and interactive program guide software developer Rovi also made key contributions to performance in this sector.

     The Fund also outperformed in the consumer discretionary sector due to stock selection. Among the leading contributors to Fund performance from this sector were casino operators Las Vegas Sands and Wynn Resorts, as well as clothing retailer Limited Brands. These companies benefited from improving consumer spending trends. We sold our position in Wynn Resorts before the close of the reporting period.

     Some of this outperformance was offset by underperformance in other sectors, including materials, consumer staples and financials. The Fund underperformed by the widest margin in the materials sector, largely due to stock selection. One of the weakest performing stocks in this sector was Monsanto, a company that produces genetically altered seeds and crop protection products. The Fund also underperformed in the consumer staples sector, primarily due to stock selection. Beverage maker Dr. Pepper/Snapple Group was one of the leading detractors from performance in this sector. We sold our position in Dr. Pepper/Snapple before the close of the reporting period. Underperformance in the financials sector also was driven by stock selection.

     After taking over management responsibilities for the Fund in June, we made several changes to the portfolio. The most significant changes included the sale of some holdings in the consumer discretionary, IT and financials sectors. Proceeds from the sale of these holdings were used to add exposure to other sectors, including energy, industrials and health care. As we’ve discussed, the stock market experienced heavy volatility during the last 12 months. We’d like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult a financial adviser to discuss your individual financial program.

     We thank you for your commitment to Invesco Van Kampen V.I. Capital Growth Fund and for sharing our long-term investment horizon.

1	U.S. Federal Reserve
2	Bureau of Economic Analysis
3	Bureau of Labor Statistics
4	Lipper Inc.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Erik Voss
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco Van Kampen V.I. Capital Growth Fund. He joined Invesco in 2010. Mr. Voss earned a B.S. in mathematics and an M.S. in finance, both from the University of Wisconsin, where he was a member of the Applied Securities Program.

Ido Cohen
Chartered Financial Portfolio manager, is manager of Invesco Van Kampen V.I. Capital Growth Fund. He joined Invesco in 2010. Mr. Cohen is a cum laude graduate of the Wharton School of the University of Pennsylvania where he earned a B.S. in economics.

Invesco Van Kampen V.I. Capital Growth Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 6/30/95, Fund data from 7/3/95

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (7/3/95)			8.33	%
	10	Years	-1.83
	5	Years	4.08
	1	Year	19.84
Series II Shares
Inception (9/18/00)			-4.41	%
	10	Years	-2.08
	5	Years	3.82
	1	Year	19.56

Effective June 1, 2010, Class I and Class II shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Series I and Series II shares, respectively, of Invesco Van Kampen V.I. Capital Growth Fund. Returns shown above for Series I and Series II shares are blended returns of the predecessor fund and Invesco Van Kampen V.I. Capital Growth Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future

results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.84% and 1.09%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.10% and 1.35%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco Van Kampen V.I. Capital Growth Fund, a series portfolio of AIM Variable Insurance Funds (Invesco

Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco Van Kampen V.I. Capital Growth Fund

Invesco Van Kampen V.I. Capital Growth Fund’s investment objective is to seek capital growth.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

Market risk is the possibility that the market values of securities owned by the Fund will decline. Market risk may affect a single issuer, industry, sector of the economy or the market as a whole. Investments in common stocks and other equity securities generally are affected by changes in the stock markets, which fluctuate substantially over time, sometimes suddenly and sharply. The Fund emphasizes a growth style of investing. The market values of growth securities may be more volatile than other types of investments. The returns on growth securities may or may not move in tandem with the returns on other styles of investing or the overall stock markets. Different types of stocks tend to shift in and out of favor depending on market and economic conditions. Thus, the value of the Fund’s investments will vary and at times may be lower or higher than that of other types of investments.

     Investments in growth-oriented equity securities may have above-average volatility of price movement. The returns on growth securities may or may not move in tandem with the returns on other styles of investing or the overall stock markets.

     The risks of investing in securities of foreign issuers can include fluctuations in foreign currencies, foreign currency exchange controls, political and economic instability, differences in financial reporting, differences in securities regulation and trading, and foreign taxation issues.

     Investing in real estate investment trusts (REITs) makes the Fund more susceptible to risks associated with the ownership of real estate and with the real estate industry in general and may involve duplication of management fees and other expenses. REITs may be less diversified than other pools of securities, may have lower trading volumes and may be subject to more abrupt or erratic price movements than the overall securities markets.

     Risks of derivatives include the possible imperfect correlation between the value of the instruments and the underlying assets; risks of default by the other party to the transaction; risks that the transactions may result in losses that partially or completely offset gains in portfolio positions; and risks that the transactions may not be liquid. Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss.

About indexes used in this report

The Russell 1000^® Growth Index is an unmanaged index considered representative of large-cap growth stocks. The Russell 1000 Growth Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco Van Kampen V.I. Capital Growth Fund

Schedule of Investments

December 31, 2010

	Shares		Value
Common Stocks–110.6%
Aerospace & Defense–3.5%
Goodrich Corp.		48,035	$	4,230,442
Honeywell International, Inc.		40,212		2,137,670
				6,368,112
Air Freight & Logistics–1.3%
C.H. Robinson Worldwide, Inc.		30,993		2,485,329
Apparel Retail–2.7%
Limited Brands, Inc.		103,233		3,172,350
Ross Stores, Inc.		27,945		1,767,521
				4,939,871
Application Software–2.4%
Citrix Systems, Inc.(a)		33,966		2,323,614
Salesforce.com, Inc.(a)		15,840		2,090,880
				4,414,494
Asset Management & Custody Banks–3.0%
Ameriprise Financial, Inc.		53,359		3,070,811
Franklin Resources, Inc.		21,967		2,442,950
				5,513,761
Automobile Manufacturers–1.0%
Ford Motor Co.(a)		112,368		1,886,659
Biotechnology–3.8%
Dendreon Corp.(a)		45,971		1,605,307
Gilead Sciences, Inc.(a)		103,728		3,759,103
United Therapeutics Corp.(a)		25,409		1,606,357
				6,970,767
Cable & Satellite–3.2%
Comcast Corp., Class A		178,488		3,921,382
DIRECTV, Class A(a)		51,625		2,061,386
				5,982,768
Casinos & Gaming–1.2%
Las Vegas Sands Corp.(a)		47,746		2,193,929
Coal & Consumable Fuels–2.0%
Peabody Energy Corp.		58,243		3,726,387
Communications Equipment–2.9%
Cisco Systems, Inc.(a)		127,859		2,586,587
QUALCOMM, Inc.		54,516		2,697,997
				5,284,584
Computer Hardware–8.1%
Apple, Inc.(a)		46,555		15,016,781
Computer Storage & Peripherals–4.4%
EMC Corp.(a)		212,142		4,858,052
SanDisk Corp.(a)		32,223		1,606,639
Western Digital Corp.(a)		47,726		1,617,911
				8,082,602
Construction & Engineering–0.2%
Foster Wheeler AG (Switzerland)(a)		11,825		408,199
Construction & Farm Machinery & Heavy Trucks–2.3%
Cummins, Inc.		14,983		1,648,280
Deere & Co.		31,247		2,595,063
				4,243,343
Consumer Finance–0.7%
American Express Co.		29,548		1,268,200
Data Processing & Outsourced Services–3.5%
Visa, Inc., Class A		90,541		6,372,276
Diversified Banks–0.6%
Comerica, Inc.		27,105		1,144,915
Electronic Manufacturing Services–0.3%
Tyco Electronics Ltd. (Switzerland)		16,256		575,462
Fertilizers & Agricultural Chemicals–8.1%
Monsanto Co.		109,314		7,612,627
Mosaic Co.		21,976		1,678,088
Potash Corp. of Saskatchewan, Inc. (Canada)		36,104		5,589,982
				14,880,697
General Merchandise Stores–1.6%
Dollar Tree, Inc.(a)		26,010		1,458,641
Target Corp.		26,123		1,570,776
				3,029,417
Gold–1.9%
Barrick Gold Corp. (Canada)		66,104		3,515,411
Health Care Distributors–0.8%
McKesson Corp.		21,968		1,546,108
Health Care Equipment–2.2%
Baxter International, Inc.		39,403		1,994,580
Covidien PLC (Ireland)		46,471		2,121,866
				4,116,446
Health Care Services–0.6%
Medco Health Solutions, Inc.(a)		16,636		1,019,288

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Capital Growth Fund

	Shares		Value
Hotels, Resorts & Cruise Lines–1.1%
Starwood Hotels & Resorts Worldwide, Inc.		34,279	$	2,083,478
Industrial Machinery–1.8%
Ingersoll-Rand PLC (Ireland)		71,664		3,374,658
Internet Retail–2.3%
Amazon.com, Inc.(a)		14,659		2,638,620
NetFlix, Inc.(a)		8,719		1,531,928
				4,170,548
Internet Software & Services–5.4%
Baidu, Inc.–ADR (Cayman Islands)(a)		48,952		4,725,336
Google, Inc., Class A(a)		8,942		5,311,280
				10,036,616
IT Consulting & Other Services–1.4%
Cognizant Technology Solutions Corp., Class A(a)		35,344		2,590,362
Managed Health Care–0.9%
UnitedHealth Group, Inc.		45,582		1,645,966
Movies & Entertainment–0.9%
Walt Disney Co.		42,458		1,592,600
Oil & Gas Drilling–1.6%
Transocean Ltd. (Switzerland)(a)		43,065		2,993,448
Oil & Gas Equipment & Services–8.8%
Cameron International Corp.(a)		46,341		2,350,879
Halliburton Co.		101,329		4,137,263
National Oilwell Varco, Inc.		35,799		2,407,483
Schlumberger Ltd. (Netherlands Antilles)		50,387		4,207,314
Weatherford International Ltd. (Switzerland)(a)		135,280		3,084,384
				16,187,323
Oil & Gas Exploration & Production–1.7%
EOG Resources, Inc.		33,284		3,042,490
Other Diversified Financial Services–1.2%
JPMorgan Chase & Co.		51,936		2,203,125
Packaged Foods & Meats–2.1%
Mead Johnson Nutrition Co.		62,273		3,876,494
Pharmaceuticals–2.3%
Hospira, Inc.(a)		54,074		3,011,381
Teva Pharmaceutical Industries Ltd.–ADR (Israel)		25,231		1,315,292
				4,326,673
Railroads–1.9%
Union Pacific Corp.		38,787		3,594,003
Restaurants–0.8%
McDonald’s Corp.		19,232		1,476,248
Semiconductors–2.2%
Broadcom Corp., Class A		46,174		2,010,878
Xilinx, Inc.		72,653		2,105,484
				4,116,362
Soft Drinks–1.0%
Hansen Natural Corp.(a)		11,766		615,127
PepsiCo, Inc.		18,897		1,234,541
				1,849,668
Specialty Stores–0.7%
Tiffany & Co.		19,468		1,212,272
Systems Software–6.0%
Oracle Corp.		163,495		5,117,393
Red Hat, Inc.(a)		37,149		1,695,852
Rovi Corp.(a)		70,268		4,357,319
				11,170,564
Trading Companies & Distributors–1.1%
WW Grainger, Inc.		14,936		2,062,811
Trucking–0.6%
J.B. Hunt Transport Services, Inc.		28,898		1,179,327
Wireless Telecommunication Services–2.5%
America Movil SAB de CV, Ser L–ADR (Mexico)		34,602		1,984,079
American Tower Corp., Class A(a)		52,254		2,698,396
				4,682,475
Total Common Stocks				204,453,317
Investment Companies–0.0%
SPDR S&P 500 ETF Trust		79		9,936
TOTAL INVESTMENTS–110.6% (Cost $159,930,645)				204,463,253
LIABILITIES IN EXCESS OF OTHER ASSETS–(10.6%)				(19,673,290	)
NET ASSETS–100.0%			$	184,789,963

Investment Abbreviations:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

Percentages are calculated as a percentage of net assets.

^(a) Non-income producing security.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Capital Growth Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at Value (Cost $159,930,645)	$	204,463,253
Receivables:
Investments sold		928,614
Dividends		118,739
Fund shares sold		30,981
Other		3,148
Total assets		205,544,735
Liabilities:
Payables:
Fund shares repurchased		19,793,432
Custodian bank		474,907
Distributor and affiliates		344,150
Investments purchased		70,119
Trustees’ deferred compensation and retirement plans		1,972
Accrued expenses		70,192
Total liabilities		20,754,772
Net assets	$	184,789,963
Net assets consist of:
Capital (par value of $0.001 per share with an unlimited number of shares authorized)	$	177,091,719
Net unrealized appreciation		44,532,608
Accumulated net investment income (loss)		(3,976	)
Accumulated net realized gain (loss)		(36,830,388	)
Net assets	$	184,789,963
Net assets value, offering price and redemption price per share:
Series I shares (based on net assets of $74,869,582 and 2,202,200 shares of beneficial interest issued and outstanding)	$	34.00
Series II shares (based on net assets of $109,920,381 and 3,282,411 shares of beneficial interest issued and outstanding)	$	33.49

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $7,521)	$	1,617,732
Dividends from affiliated money market funds (includes securities lending income of $262)		9,960
Interest		7,551
Total Income		1,635,243
Expenses:
Investment advisory fee		1,298,114
Administrative services fees		270,967
Distribution fees — Series II		266,074
Professional fees		28,000
Trustees’ and officers’ fees and benefits		21,564
Transfer agent fees		20,165
Custody		19,021
Other		18,844
Total expenses		1,942,749
Expense reduction		212,825
Less credits earned on cash balances		33
Net expenses		1,729,891
Net investment income (loss)		(94,648	)
Realized and unrealized gain (loss):
Realized gain (loss):
Investments		(8,103,258	)
Foreign currency transactions		(33,250	)
Net realized gain (loss)		(8,136,508	)
Unrealized appreciation (depreciation):
Beginning of the period		1,387,413
End of the period		44,532,608
Net unrealized appreciation during the period		43,145,195
Net realized and unrealized gain		35,008,687
Net increase in net assets from operations	$	34,914,039

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Capital Growth Fund

Statements of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
From investment activities:
Operations:
Net investment income (loss)	$	(94,648	)	$	42,137
Net realized gain (loss)		(8,136,508	)		(9,935,026	)
Net unrealized appreciation during the period		43,145,195			86,278,618
Change in net assets from operations		34,914,039			76,385,729
Distributions from net investment income:
Series I Shares		0			(60,146	)
Series II Shares		0			0
		0			(60,146	)
Return of capital distributions:
Series I Shares		0			(11,587	)
Series II Shares		0			0
		0			(11,587	)
Total distributions		0			(71,733	)
Net change in net assets from investment activities		34,914,039			76,313,996
From capital transactions:
Proceeds from shares sold		28,307,106			32,081,935
Net asset value of shares issued through dividend reinvestment		0			71,733
Cost of shares repurchased		(65,178,569	)		(39,516,705	)
Net change in net assets from capital transactions		(36,871,463	)		(7,363,037	)
Total increase (decrease) in net assets		(1,957,424	)		68,950,959
Net assets:
Beginning of the period		186,747,387			117,796,428
End of the period (including accumulated undistributed net investment income (loss) of $(3,976) and $(182,289), respectively)	$	184,789,963		$	186,747,387

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Capital Growth Fund

Financial Highlights

The following schedule presents financial highlights for one share of the Fund outstanding throughout the periods indicated.

	Series I sharesˆ
	Years ended December 31,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	28.37		$	17.10		$	33.68		$	28.81		$	28.01
Net investment income (loss)(a)		0.03			0.04			(0.01	)		0.11			0.04
Net realized and unrealized gain (loss)		5.60			11.26			(16.43	)		4.77			0.76
Total from investment operations		5.63			11.30			(16.44	)		4.88			0.80
Less:
Distributions from net investment income		-0-			0.03			0.14			0.01			-0-
Return of capital distributions		-0-			0.00	(b)		-0-			-0-			-0-
Total distributions		-0-			0.03			0.14			0.01			-0-
Net asset value, end of the period	$	34.00		$	28.37		$	17.10		$	33.68		$	28.81
Total return*		19.84	%(c)		66.07	%		(48.99	)%		16.96	%		2.86	%
Net assets at end of the period (in millions)	$	74.9		$	74.2		$	48.6		$	143.6		$	160.5
Ratio of expenses to average net assets*		0.79	%(d)		0.84	%		0.85	%		0.80	%		0.78	%
Ratio of net Investment Income (loss) to Average Net Assets*		0.12	%(d)		0.17	%		(0.04	)%		0.35	%		0.16	%
Portfolio turnover(e)		158	%		13	%		42	%		177	%		128	%
* If certain expenses had not been assumed by the Adviser, total returns would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		0.90	%(d)		N/A			0.87	%		N/A			N/A
Ratio of net investment income to average net assets		0.24	%(d)		N/A			(0.02	)%		N/A			N/A

(a)	Based on average shares outstanding.
(b)	Amount is less than $0.01 per share.
(c)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(d)	Ratios are annualized and based on average daily net assets (000’s omitted) of $79,179.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
ˆ	On June 1, 2010, the Class I shares of the predecessor fund was reorganized into Series I shares of the Fund.

N/A=Not Applicable

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Capital Growth Fund

Financial Highlights—(continued)

	Series II sharesˆ
	Years ended December 31,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	28.01		$	16.91		$	33.29		$	28.54		$	27.81
Net investment income (loss)(a)		(0.05	)		(0.02	)		(0.08	)		0.03			(0.02	)
Net realized and unrealized gain (loss)		5.53			11.12			(16.25	)		4.72			0.75
Total from investment operations		5.48			11.10			(16.33	)		4.75			0.73
Less:
Distributions from net investment income		-0-			-0-			0.05			-0-			-0-
Net asset value, end of the period	$	33.49		$	28.01		$	16.91		$	33.29		$	28.54
Total return*		19.56	%(b)		65.64	%(c)		(49.11	)%(c)		16.64	%(c)		2.62	%(c)
Net assets at end of the period (in millions)	$	109.9		$	112.5		$	69.2		$	261.2		$	257.4
Ratio of expenses to average net assets*		1.04	%(d)		1.09	%		1.10	%		1.05	%		1.03	%
Ratio of net investment income (loss) to average net assets*		(0.18	)%(d)		(0.07	)%		(0.29	)%		0.11	%		(0.09	)%
Portfolio turnover(e)		158	%		13	%		42	%		177	%		128	%
* If certain expenses had not been assumed by the Adviser, total returns would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		1.15	%(d)		N/A			1.12	%		N/A			N/A
Ratio of net investment income to average net assets		(0.07	)%(d)		N/A			(0.27	)%		N/A			N/A

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	These returns include combined Rule 12b-1 fees and service fees of up to 0.25%.
(d)	Ratios are annualized and based on average daily net assets (000’s omitted) of $106,430.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
ˆ	On June 1, 2010, the Class II shares of the predecessor fund was reorganized into Series II shares of the Fund.

N/A=Not Applicable

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Capital Growth Fund

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen V.I. Capital Growth Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as Van Kampen Life Investment Trust Capital Growth Portfolio (the “Acquired Fund”), an investment portfolio of Van Kampen Life Investment Trust. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class I and Class II shares received Series I and Series II shares, respectively of the Fund. Information for the Acquired Fund’s — Class I and Class II shares prior to the Reorganization are included with Series I and Series II shares, respectively, of the Fund throughout this report.

  The Fund’s investment objective is capital appreciation.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.

Invesco Van Kampen V.I. Capital Growth Fund

	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation.

Invesco Van Kampen V.I. Capital Growth Fund

Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.

    The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $500 million		0	.70%
Next $500 million		0	.65%
Over $1 billion		0	.60%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee of $534,567 to Van Kampen Asset Management (“Van Kampen”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed, through at least June 30, 2012, 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 Series I shares to 0.84% and Series II shares to 1.09% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the net annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the period ended December 31, 2010, the Adviser waived advisory fees of $212,825.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $29,883 for accounting and fund administrative services and reimbursed $273,106 for services provided by insurance companies. Prior to the Reorganization, under separate accounting services and chief compliance officer (“CCO”) employment agreements, Van Kampen Investment Inc., provided accounting services and the CCO provided compliance services to the Acquired Fund. Pursuant to such agreements, the Acquired Fund paid $9,903 to Van Kampen Investments Inc.

  Also, the Trust has entered into service agreements whereby State Street Bank & Trust Company (“SSB”) serves as custodian, fund accountant and provides certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. Prior to the Reorganization, the Acquired Fund paid $8,107 to Van Kampen Investor Services Inc., which served as the Acquired Fund’s transfer agent. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. Prior to the Reorganization, the Acquired Fund had entered into master distribution agreements with Van Kampen Funds Inc.

Invesco Van Kampen V.I. Capital Growth Fund

(“VKFI”) to serve as the distributor for the Class II shares. Pursuant to such agreements, the Acquired Fund paid $114,899 to VKFI. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

  Prior to the Reorganization, the Acquired Fund paid brokerage commissions to Morgan Stanley & Co., Inc., an affiliate of the Acquired Fund, totaling $2,138.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	204,463,253	$	—	$	—	$	204,463,253

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  For the period June 1, 2010 to December 31, 2010, the Fund paid legal fees of $705 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. Prior to the Reorganization, the Acquired Fund recognized expense of $2,038 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom LLP, of which a director of the Acquired Fund was a partner of such firm and he and his law firm provided legal services as legal counsel to the Acquired Fund.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Distributions to Shareholders:

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	0	$	60,146
Return of Capital		0		11,587
Total distributions	$	0	$	71,733

Invesco Van Kampen V.I. Capital Growth Fund

Tax Components of Net Assets at Period-End:

	2010
Net unrealized appreciation — investments	$	41,701,852
Temporary book/tax differences		(3,976	)
Capital loss carryforward		(33,999,632	)
Shares of beneficial interest		177,091,719
Total net assets	$	184,789,963

  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 utilized $0 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2011	$	1,891,381
December 31, 2016		12,927,582
December 31, 2017		5,236,281
December 31, 2018		13,944,388
Total capital loss carryforward	$	33,999,632

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $274,360,088 and $277,149,499, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	42,554,777
Aggregate unrealized (depreciation) of investment securities		(852,925	)
Net unrealized appreciation of investment securities	$	41,701,852
Cost of investments for tax purposes is $162,761,401.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforward, on December 31, 2010, accumulated net investment income (loss) was increased by $272,961, accumulated net realized gain (loss) was increased by $144,975,045 and capital decreased by $145,248,006. This reclassification had no effect on the net assets of the Fund.

Invesco Van Kampen V.I. Capital Growth Fund

NOTE 9—Share Information

	Summary of Share Activity
	Years ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sales:
Series I		727,223		$	20,626,860			707,974		$	14,460,316
Series II		260,787			7,680,246			797,284			17,621,619
Total Sales		988,010			28,307,106			1,505,258			32,081,935
Dividend Reinvestment:
Series I		0			0			2,584			71,733
Series II		0			0			0			0
Total Dividend Reinvestment		0			0			2,584			71,733
Repurchases:
Series I		(1,140,807	)		(36,269,219	)		(937,388	)		(20,613,290	)
Series II		(995,335	)		(28,909,350	)		(873,368	)		(18,903,415	)
Total Repurchases		(2,136,142	)	$	(65,178,569	)		(1,810,756	)	$	(39,516,705	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 67% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 10—Change in Independent Registered Public Accounting Firm (Unaudited)

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

NOTE 11—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would acquire all of the assets and liabilities of Invesco V.I. Large Cap Growth Fund (the “Target Fund”) in exchange for shares of the Fund. The Agreement requires approval of the Target Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

Invesco Van Kampen V.I. Capital Growth Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco Van Kampen V.I. Capital Growth Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen V.I. Capital Growth Fund (formerly known as Van Kampen Life Investment Trust Capital Growth Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 19, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco Van Kampen V.I. Capital Growth Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
			ACTUAL				(5% annual return before expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Series	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period3		Ratio
I	$	1,000.00	$	1,250.00	$	4.48	$	1,021.22	$	4.02		0.79	%
II		1,000.00		1,248.23		5.95		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 July 1, 2010 through December 31, 2010, 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.
3	Hypothetical expenses are equal to the annualized expense ratio indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect a one-half year period.

Invesco Van Kampen V.I. Capital 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Long-Term Capital Gain Dividends	$	0
Corporate Dividends Received Deduction*		0%
U.S. Treasury Obligations*		0%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco Van Kampen V.I. Capital Growth Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

				Number of
				Funds in
				Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)		Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years		Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation		208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie		208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation		208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.		226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)		208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives		208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	��	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.		208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper		208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)		208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.		226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche		208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco Van Kampen V.I. Comstock Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VK-VICOM-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the 12 months ended December 31, 2010, Invesco Van Kampen V.I. Comstock Fund outperformed its style-specific benchmark, the Russell 1000 Value Index. The Fund’s outperformance was largely due to stock selection and an overweight position in the consumer discretionary sector. Alternatively, stock selection in information technology (IT) detracted the most from the Fund’s performance versus the benchmark index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	15.98	%
Series II Shares	15.70
S&P 500 Index▼ (Broad Market Index)	15.08
Russell 1000 Value Index▼ (Style-Specific Index)	15.51

^▼ Lipper Inc.

How we invest

We seek to exploit market inefficiencies by investing in companies that appear undervalued relative to the overall market. Ultimately, we believe that the market will recognize the value in these companies and will sell as these stock prices begin to reflect their intrinsic value. We feel that stock picking, as opposed to making sector bets, provides a more consistent path to success. In addition, we may be able to take advantage of pricing anomalies by purchasing undervalued stocks before a recognizable catalyst arises.

     The Fund’s investable universe includes all large-cap U.S.-denominated equities. To distill these investments, we filter for

Portfolio Composition

By sector

Financials	20.3	%
Consumer Discretionary	17.0
Health Care	11.4
Energy	10.1
Information Technology	10.0
Consumer Staples	9.0
Industrials	6.6
Materials	5.0
Telecommunication Services	3.8
Utilities	1.2
Money Market Funds Plus Other Assets
Less Liabilities	5.6

Top Five Industries

1.	Pharmaceuticals	7.8	%
2.	Cable & Satellite	7.1
3.	Movies & Entertainment	6.2
4.	Integrated Oil & Gas	6.1
5.	Other Diversified Financial Services	6.1

companies with sufficient liquidity. We filter the remaining securities on valuation metrics depending upon the growth or cyclical nature of their business. The result of this filtering process is a pool of highly liquid securities that we believe are statistically inexpensive relative to the broader market. Companies identified in the filtering process are thoroughly analyzed to assess intrinsic value and their ability to achieve fair value.

     We initiate a purchase of a security only if we believe the potential for stock price appreciation outweighs potential downside risk. To be eligible for inclusion in the Fund, a stock must meet the following criteria:

Top 10 Equity Holdings*

1.	Comcast Corp.	5.0	%
2.	Viacom, Inc.	3.5
3.	JPMorgan Chase & Co.	2.9
4.	International Paper Co.	2.8
5.	Pfizer, Inc.	2.4
6.	Halliburton Co.	2.4
7.	Kraft Foods, Inc.	2.2
8.	Chubb Corp.	2.2
9.	Chevron Corp.	2.0
10.	Bank of New York Mellon Corp.	2.0

Total Net Assets	$1.9 billion
Total Number of Holdings*		77

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.

n	If the security is statistically cheap on the basis of its primary valuation criteria, which depends upon the cyclical or growth nature of its business.
n	If rigorous fundamental analysis shows that the company is undervalued and possesses potential financial strength and improved quality of management for future growth.

     We maintain an intense focus on the quality of a company’s accounting and on financial statement analysis. Portfolio construction is bottom up and stock specific, concentrating on individual company fundamental analysis and valuations. Therefore, while we monitor and are aware of our positions relative to the benchmark, it does not play a major role in the construction of the Fund.

     We seek to manage risk through portfolio construction, mainly though diversification across most major sectors, and through the assistance of an independent quantitative risk control group. Risk management is continuous. The Fund is regularly reviewed to ensure it is optimally constructed on a risk/reward basis. We have the final say on the construction of the Fund and a collegial relationship exists between the risk management team and the Fund teams.

     Our sell discipline is just as important as the buy decision and is based on the same principles: relative value and fundamentals. While no sale is automatic, a security is typically sold if it meets one or more of the following criteria:

n	The target price has been realized, and we no longer consider the company undervalued.
n	A better value opportunity can be found elsewhere.
n	A company is experiencing deteriorating fundamentals beyond what we feel to be a tolerable level and the trend is likely to be a long-term issue.

Market conditions and your Fund

Equity markets were choppy during the fiscal year as investors weighed the competing issues of solid corporate profits and soft macroeconomic data. Corporate earnings were largely positive, but often overshadowed by concerns about high unemployment, a lack of consumer spending, soft housing data and the possibility of additional U.S. Federal Reserve accommodation. After rising through April, major equity indexes sold off precipitously in May as the sovereign debt crisis unfolded in the eurozone while U.S. economic indicators remained weak,

Invesco Van Kampen V.I. Comstock Fund

prompting fears of a double-dip recession. Uncertainty created by the debt crisis combined with subdued employment, consumer spending and housing data added to concerns that the recovery was slowing to a subnormal growth rate. Just as abruptly, however, the markets reversed course starting in September and rallied through the end of the year on modestly better economic news. The major equity indexes garnered positive returns for the fiscal year, and all 10 sectors within the S&P 500 Index posted gains. More economically sensitive sectors such as consumer discretionary and industrials had the highest returns, while the less economically sensitive sectors such as health care had some of the lowest returns.

     In this environment, the Fund outperformed its style-specific benchmark, the Russell 1000 Value Index. The Fund’s consumer discretionary exposure acted as the largest contributor to relative and absolute returns. The Fund’s notable overweight combined with strong stock selection aided performance. Specifically, the Fund’s holdings in media companies Comcast and Viacom made significant contributions to results as both stocks posted strong double-digit returns during the fiscal year.

     The financials sector was another primary driver of relative outperformance when measured against the Russell 1000 Value Index. Specifically, the Fund’s material overweight in the property and casualty insurance industry boosted performance. Chubb, a property and casualty insurance company, was one of the largest holdings in the Fund for much of the previous year. The company’s strong performance is reflective of a strong balance sheet and a well-diversified, conservative underwriting platform. Chubb has done an admirable job of returning cash to shareowners through buybacks and dividends, while operating in a difficult pricing environment.

     The information technology (IT) sector was the largest detractor from relative performance. Among IT stocks, the Fund’s overweight exposure combined with unfavorable stock selection among hardware and select internet related companies dampened shareholder returns. More specifically, the unexpected departure of Hewlett Packard’s CEO temporarily weighed heavily on its stock price. Shares of Yahoo, a relatively new addition to the Fund, were weak as investors questioned the rate and sustainability of the recovery in advertising and the economic environment in general.

     Stock selection in the materials sector and a small overweight position in the health care sector also detracted from results relative to the Russell 1000 Value Index.

     Toward the end of the period, we paired down exposure to select insurance and media stocks, using the proceeds to opportunistically increase the Fund’s energy and industrials exposure.

     We believe the market volatility and the market correction that began in the second quarter of 2010 created opportunities to invest in companies with attractive valuations. We stand by our contrarian philosophy and deep value approach of buying extremely undervalued companies, and capitalizing on market volatility and periods of down markets as value is created for new investment opportunities.

     Markets experienced a strong recovery in 2010. We would like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult a financial adviser to discuss your individual financial program. Thank you for your investment in the Invesco Van Kampen V.I. Comstock Fund and for sharing our long-term investment horizon.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Kevin Holt
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco Van Kampen V.I. Comstock Fund. Mr. Holt joined Invesco in 2010. He earned a bachelor’s degree from the University of Iowa and an M.B.A. from the University of Chicago Graduate School of Business.

Devin Armstrong
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Comstock Fund. Mr. Armstrong joined Invesco in 2010. He earned a B.S. in psychology and finance from the University of Illinois and an M.B.A. in finance from Columbia University.

Jason Leder
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Comstock Fund. Mr. Leder joined Invesco in 2010. He earned a bachelor’s degree from The University of Texas and an M.B.A. from Columbia University.

Matthew Seinsheimer
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Comstock Fund. Mr. Seinsheimer joined Invesco in 1998. He earned a B.B.A. from Southern Methodist University and an M.B.A. from The University of Texas at Austin.

James Warwick
Portfolio manager, is manager of Invesco Van Kampen V.I. Comstock Fund. Mr. Warwick joined Invesco in 2010. He earned a B.B.A. from Stephen F. Austin State University and an M.B.A. from the University of Houston.

Invesco Van Kampen V.I. Comstock Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Fund and index data from 4/30/99

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (4/30/99)			4.66	%
	10	Years	3.33
	5	Years	1.82
	1	Year	15.98
Series II Shares
Inception (9/18/00)			4.58	%
	10	Years	3.07
	5	Years	1.57
	1	Year	15.70

     Effective June 1, 2010, Class I and Class II shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Series I and Series II shares, respectively, of Invesco Van Kampen V.I. Comstock Fund. Returns shown above for Series I and Series II shares are blended returns of the predecessor fund and Invesco Van Kampen V.I. Comstock Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results;

current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.62% and 0.87%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.87% and 1.12%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco Van Kampen V.I. Comstock Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable

Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco Van Kampen V.I. Comstock Fund

Invesco Van Kampen V.I. Comstock Fund’s investment objective is to seek capital growth and income through investments in equity securities, including common stocks, preferred stocks and securities convertible into common and preferred stocks.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

During an overall stock market decline, stock prices of small- or medium-sized companies often fluctuate more than stock prices of larger companies or the market averages in general. In addition, such companies typically are subject to a greater degree of change in earnings and business prospects than are larger companies and may be less liquid than larger-sized companies. In addition, small- and medium-sized companies may have more limited markets, financial resources and product lines, and may lack the depth of management of larger companies.

     Value investing is subject to the risk that the valuations never improve or that the returns on value equity securities are less than the returns on other styles of investing or the overall stock markets.

     The risks of investing in securities of foreign issuers, including emerging market issuers, can include fluctuations in foreign currencies, foreign currency exchange controls, political and economic instability, differences in securities regulation and trading, and foreign taxation issues.

     Investing in real estate investment trusts (REITs) makes the Fund more susceptible to risks associated with the ownership of real estate and with the real estate industry in general and may involve duplication of management fees and certain other expenses. In addition, REITs depend upon specialized management skills, may be less diversified, may have lower trading volume, and may be subject to more abrupt or erratic price movements than the overall securities markets.

     Risks of derivatives include the possible imperfect correlation between the value of the instruments and the underlying assets; risks of default by the other party to certain transactions; risks that the transactions may result in losses that partially or completely offset gains in portfolio positions; and risks that the transactions may not be liquid.

     Market risk is the possibility that the market values of securities owned by the Fund will decline. Market risk may affect a single issuer, industry, sector of the economy or the market as a whole. Investments in equity securities generally are affected by changes in the stock markets which fluctuate substantially over time, sometimes suddenly and sharply. The ability of the Fund’s investment holdings to generate income depends on the earnings and the continuing declaration of dividends by the issuers of such securities. The value of a convertible security tends to decline as interest rates rise and, because of the conversion feature, tends to vary with fluctuations in the market value of the underlying equity security.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Russell 1000^® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

     Industry classifications used in this report are generally classified 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.

Invesco Van Kampen V.I. Comstock Fund

Schedule of Investments

December 31, 2010

Description	Shares		Value
Common Stocks–94.4%
Aerospace & Defense–1.2%
Honeywell International, Inc.		442,009	$	23,497,198
Aluminum–1.8%
Alcoa, Inc.		2,171,150		33,413,999
Asset Management & Custody Banks–2.4%
Bank of New York Mellon Corp.		1,266,062		38,235,072
State Street Corp.		150,700		6,983,438
				45,218,510
Automobile Manufacturers–0.7%
General Motors Co.(a)		369,827		13,631,823
Cable & Satellite–7.1%
Comcast Corp., Class A		4,307,264		94,630,590
DIRECTV, Class A(a)		276,044		11,022,437
Time Warner Cable, Inc.		435,982		28,787,891
				134,440,918
Communications Equipment–0.8%
Cisco Systems, Inc.(a)		787,356		15,928,212
Computer Hardware–2.7%
Dell, Inc.(a)		1,391,004		18,848,104
Hewlett-Packard Co.		781,505		32,901,361
				51,749,465
Data Processing & Outsourced Services–0.3%
Western Union Co.		285,542		5,302,515
Department Stores–0.8%
J.C. Penney Co., Inc.		270,766		8,748,449
Macy’s, Inc.		260,165		6,582,175
				15,330,624
Diversified Banks–1.8%
U.S. Bancorp		481,681		12,990,936
Wells Fargo & Co.		683,627		21,185,601
				34,176,537
Diversified Chemicals–0.4%
Du Pont (E.I.) de Nemours & Co.		149,399		7,452,022
Drug Retail–1.5%
CVS Caremark Corp.		821,450		28,561,817
Electric Utilities–1.0%
American Electric Power Co., Inc.		132,400		4,763,752
FirstEnergy Corp.		368,689		13,648,867
				18,412,619
Electrical Components & Equipment–0.8%
Emerson Electric Co.		269,775		15,423,037
General Merchandise Stores–0.4%
Target Corp.		117,878		7,088,004
Health Care Distributors–1.3%
Cardinal Health, Inc.		650,265		24,911,652
Home Improvement Retail–1.7%
Home Depot, Inc.		462,571		16,217,739
Lowe’s Cos., Inc.		668,721		16,771,523
				32,989,262
Household Products–0.3%
Procter & Gamble Co.		83,774		5,389,181
Hypermarkets & Super Centers–1.5%
Wal-Mart Stores, Inc.		529,163		28,537,761
Industrial Conglomerates–3.3%
General Electric Co.		1,350,889		24,707,760
Textron, Inc.		507,726		12,002,642
Tyco International Ltd. (Switzerland)		605,400		25,087,776
				61,798,178
Industrial Machinery–1.3%
Ingersoll-Rand PLC (Ireland)		523,514		24,652,274
Integrated Oil & Gas–6.1%
BP PLC–ADR (United Kingdom)		395,268		17,458,988
Chevron Corp.		422,300		38,534,875
ConocoPhillips		258,823		17,625,846
Royal Dutch Shell PLC–ADR (United Kingdom)		428,734		28,630,857
Total SA–ADR (France)		244,455		13,073,453
				115,324,019
Integrated Telecommunication Services–3.0%
AT&T, Inc.		831,910		24,441,516
Verizon Communications, Inc.		884,022		31,630,307
				56,071,823
Internet Software & Services–3.6%
eBay, Inc.(a)		1,339,119		37,267,682
Yahoo!, Inc.(a)		1,839,885		30,597,287
				67,864,969
Investment Banking & Brokerage–2.2%
Goldman Sachs Group, Inc.		127,679		21,470,500
Morgan Stanley		720,732		19,611,118
				41,081,618

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Comstock Fund

Description	Shares		Value
IT Consulting & Other Services–0.5%
Accenture PLC, Class A (Ireland)		192,000	$	9,310,080
Life & Health Insurance–2.9%
Aflac, Inc.		165,873		9,360,214
MetLife, Inc.		635,000		28,219,400
Torchmark Corp.		288,637		17,243,174
				54,822,788
Managed Health Care–2.3%
UnitedHealth Group, Inc.		858,158		30,988,085
WellPoint, Inc.(a)		203,851		11,590,968
				42,579,053
Movies & Entertainment–6.2%
News Corp., Class B		1,522,447		24,998,580
Time Warner, Inc.		782,715		25,179,942
Viacom, Inc., Class B		1,689,153		66,907,350
				117,085,872
Multi-Utilities–0.3%
Sempra Energy		103,200		5,415,936
Oil & Gas Drilling–0.5%
Noble Corp. (Switzerland)		260,631		9,322,771
Oil & Gas Equipment & Services–3.5%
Halliburton Co.		1,089,468		44,482,978
Weatherford International Ltd. (Switzerland)(a)		939,816		21,427,805
				65,910,783
Other Diversified Financial Services–6.1%
Bank of America Corp.		2,559,420		34,142,663
Citigroup, Inc.(a)		5,655,647		26,751,210
JPMorgan Chase & Co.		1,277,737		54,201,604
				115,095,477
Packaged Foods & Meats–3.9%
Kraft Foods, Inc., Class A		1,345,953		42,410,979
Unilever NV (Netherlands)		1,001,477		31,446,378
				73,857,357
Paper Products–2.8%
International Paper Co.		1,955,567		53,269,645
Personal Products–0.5%
Avon Products, Inc.		302,379		8,787,134
Pharmaceuticals–7.8%
Abbott Laboratories		260,729		12,491,526
Bristol-Myers Squibb Co.		1,381,539		36,583,153
GlaxoSmithKline PLC–ADR (United Kingdom)		256,212		10,048,635
Merck & Co., Inc.		877,566		31,627,479
Pfizer, Inc.		2,627,971		46,015,772
Roche Holdings AG–ADR (Switzerland)		304,098		11,174,081
				147,940,646
Property & Casualty Insurance–3.5%
Chubb Corp.		688,461		41,059,814
Travelers Cos., Inc.		461,393		25,704,204
				66,764,018
Regional Banks–1.4%
PNC Financial Services Group, Inc.		420,718		25,545,997
Semiconductor Equipment–0.5%
KLA-Tencor Corp.		251,619		9,722,558
Semiconductors–0.9%
Intel Corp.		843,581		17,740,508
Soft Drinks–1.3%
Coca-Cola Co.		294,419		19,363,938
PepsiCo, Inc.		81,100		5,298,263
				24,662,201
Systems Software–0.6%
Microsoft Corp.		392,938		10,970,829
Wireless Telecommunication Services–0.9%
Vodafone Group PLC–ADR (United Kingdom)		624,100		16,494,963
Total Long-Term Investments–94.4% (Cost $1,831,078,923)				1,783,546,653
Money Market Funds–2.7%
Liquid Assets Portfolio–Institutional Class(b)		25,138,477		25,138,477
Premier Portfolio–Institutional Class(b)		25,138,477		25,138,477
Total Money Market Funds–2.7% (Cost $50,276,954)				50,276,954
TOTAL INVESTMENTS–97.1% (Cost $1,881,355,877)				1,833,823,607
OTHER ASSETS IN EXCESS OF LIABILITIES–2.9%				54,282,193
NET ASSETS–100.0%			$	1,888,105,800

Investment Abbreviations:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

Percentages are calculated as a percentage of net assets.

(a)	Non-income producing security.
(b)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Comstock Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $1,831,078,923)	$	1,783,546,653
Investments in affiliated money market funds, at value and cost		50,276,954
Receivables:
Fund shares sold		66,850,173
Dividends		2,072,213
Investments sold		1,635,639
Expense reimbursement from adviser		23,436
Other		3,533
Total assets		1,904,408,601
Liabilities:
Payables:
Fund shares repurchased		9,106,182
Distributor and affiliates		3,578,675
Investments purchased		2,996,424
Accrued expenses		610,324
Trustees’ deferred compensation and retirement plans		11,196
Total liabilities		16,302,801
Net assets	$	1,888,105,800
Net assets consist of:
Capital (par value of $0.001 per share with an unlimited number of shares authorized)	$	2,469,055,472
Accumulated undistributed net investment income		25,786,214
Net unrealized appreciation (depreciation)		(47,532,270	)
Accumulated net realized gain (loss)		(559,203,616	)
Net assets	$	1,888,105,800
Net assets value, offering price and redemption price per share:
Series I shares (based on net assets of $223,354,399 and 19,074,216 shares of beneficial interest issued and outstanding)	$	11.71
Series II shares (based on net assets of $1,664,751,401 and 142,696,911 shares of beneficial interest issued and outstanding)	$	11.67

Statement of Operations

For the Year Ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $557,197)	$	42,374,126
Dividends from affiliated money market funds		44,905
Interest		38,074
Total income		42,457,105
Expenses:
Investment advisory fee		10,932,828
Distribution fees		4,502,277
Administrative services fees		2,914,907
Custody		140,727
Trustees’ and officers’ fees and benefits		76,691
Professional fees		74,654
Transfer agent fees		21,781
Other		63,313
Total expenses		18,727,178
Expense reduction		2,400,396
Net expenses		16,326,782
Net investment income		26,130,323
Realized and unrealized gain (loss):
Realized gain (loss):
Investments		65,761,794
Futures contracts		(11,884,840	)
Net realized gain		53,876,954
Unrealized appreciation (depreciation):
Beginning of the period		(217,426,062	)
End of the period		(47,532,270	)
Net unrealized appreciation during the period		169,893,792
Net realized and unrealized gain		223,770,746
Net increase in net assets from operations	$	249,901,069

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Comstock Fund

Statements of Changes in Net Assets

	For the Year Ended			For the Year Ended
	December 31,			December 31,
	2010			2009
From investment activities:
Operations:
Net investment income	$	26,130,323		$	36,407,520
Net realized gain (loss)		53,876,954			(111,063,024	)
Net unrealized appreciation during the period		169,893,792			592,297,754
Change in net assets from operations		249,901,069			517,642,250
Distributions from net investment income:
Series I shares		(193,186	)		(8,041,700	)
Series II shares		(2,889,112	)		(95,569,652	)
Total distributions		(3,082,298	)		(103,611,352	)
Net change in net assets from investment activities		246,818,771			414,030,898
From capital transactions:
Proceeds from shares sold		166,714,822			193,807,400
Net asset value of shares issued through dividend reinvestment		3,082,298			103,611,352
Cost of shares repurchased		(841,889,841	)		(859,429,553	)
Net change in net assets from capital transactions		(672,092,721	)		(562,010,801	)
Total increase (decrease) in net assets		(425,273,950	)		(147,979,903	)
Net Assets:
Beginning of the period		2,313,379,750			2,461,359,653
End of the period (including accumulated undistributed net investment income of $25,786,214 and $2,743,906, respectively)	$	1,888,105,800		$	2,313,379,750

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Comstock Fund

Financial Highlights

The following schedules present financial highlights for one share of the Fund outstanding throughout the periods indicated.

	Series I Sharesˆ
	Year ended December 31,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	10.11		$	8.25		$	13.86		$	14.75		$	13.69
Net investment income(a)		0.17			0.16			0.26			0.30			0.30
Net realized and unrealized gain (loss)		1.44			2.12			(4.93	)		(0.60	)		1.81
Total from investment operations		1.61			2.28			(4.67	)		(0.30	)		2.11
Less:
Distributions from net investment income		0.01			0.42			0.30			0.26			0.21
Distributions from net realized gain		-0-			-0-			0.64			0.33			0.84
Total distributions		0.01			0.42			0.94			0.59			1.05
Net asset value, end of the period	$	11.71		$	10.11		$	8.25		$	13.86		$	14.75
Total return*		15.98	%(b)		28.78	%		(35.67	)%		(2.04	)%		16.28	%
Net assets at end of the period (in millions)	$	223.4		$	148.1		$	192.5		$	309.6		$	400.7
Ratio of expenses to average net assets*		0.61	%(c)		0.62	%		0.60	%		0.59	%		0.59	%
Ratio of net investment income to average net assets*		1.58	%(c)		1.91	%		2.38	%		2.03	%		2.17	%
Portfolio turnover(d)		21	%		27	%		38	%		25	%		27	%
* If certain expenses had not been assumed by the adviser, total returns would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		0.73	%(c)		N/A			N/A			N/A			N/A
Ratio of net investment income to average net assets		1.70	%(c)		N/A			N/A			N/A			N/A

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Ratios are annualized and based on average daily net assets (000’s omitted) of $144,501.
(d)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
ˆ	On June 1, 2010, the Class I shares of the predecessor fund were reorganized into Series I shares of the Fund.

N/A=Not Applicable

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Comstock Fund

Financial Highlights—(continued)

	Series II Sharesˆ
	Year ended December 31,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	10.10		$	8.22		$	13.80		$	14.70		$	13.65
Net investment income(a)		0.14			0.14			0.23			0.26			0.26
Net realized and unrealized gain (loss)		1.44			2.11			(4.91	)		(0.59	)		1.81
Total from investment operations		1.58			2.25			(4.68	)		(0.33	)		2.07
Less:
Distributions from net investment income		0.01			0.37			0.26			0.24			0.18
Distributions from net realized gain		-0-			-0-			0.64			0.33			0.84
Total distributions		0.01			0.37			0.90			0.57			1.02
Net asset value, end of the period	$	11.67		$	10.10		$	8.22		$	13.80		$	14.70
Total return*		15.70	%(b)		28.41	%(c)		(35.80	)%(c)		(2.33	)%(c)		16.04	%(c)
Net assets at end of the period (in millions)	$	1,664.8		$	2,165.3		$	2,268.8		$	3,521.5		$	3,440.8
Ratio of expenses to average net assets*		0.86	%(d)		0.87	%		0.85	%		0.84	%		0.84	%
Ratio of net investment income to average net assets*		1.32	%(d)		1.63	%		2.13	%		1.78	%		1.91	%
Portfolio turnover(e)		21	%		27	%		38	%		25	%		27	%
* If certain expenses had not been assumed by the adviser, total returns would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		0.98	%(d)		N/A			N/A			N/A			N/A
Ratio of net investment income to average net assets		1.44	%(d)		N/A			N/A			N/A			N/A

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	These returns include combined Rule 12b-1 fees and service fees of up to 0.25%.
(d)	Ratios are annualized and based on average daily net assets (000’s omitted) of $1,800,911.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
ˆ	On June 1, 2010, the Class II shares of the predecessor fund were reorganized into Series II shares of the Fund.

N/A=Not Applicable

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen V.I. Comstock Fund (the “Fund”) is a series portfolio of the AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), a Delaware statutory trust, and is registered as a diversified, open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust consists of forty-one separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as Van Kampen Life Investment Trust Comstock Portfolio (the “Acquired Fund”), an investment portfolio of Van Kampen Life Investment Trust. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class I and Class II shares received Series I and Series II shares, respectively, of the Fund. Information for the Acquired Fund’s Class I and Class II shares prior to the Reorganization are included with Series I and Series II shares, respectively, of the Fund throughout this report.

  The Fund’s investment objective is to seek capital growth and income through investments in equity securities, including common stocks, preferred stocks and securities convertible into common and preferred stocks.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  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.

Invesco Van Kampen V.I. Comstock Fund

	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.

Invesco Van Kampen V.I. Comstock Fund

D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $500 million		0	.60%
Over $500 million		0	.55%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee of $5,353,503 to Van Kampen Asset Management (“Van Kampen”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed, through at least June 30, 2012, 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 Series I shares to 0.62% and Series II shares to 0.87% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the net annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

Invesco Van Kampen V.I. Comstock Fund

  Prior to the Reorganization, Van Kampen had voluntarily agreed to waive fees and/or reimburse expenses of Class I and Class II shares. Van Kampen did not waive fees and/or reimburse expenses under this agreement.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the year ended December 31, 2010, the Adviser waived advisory fees of $2,400,396.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $249,476 for accounting and fund administrative services and reimbursed $2,477,130 for services provided by insurance companies. Prior to the Reorganization, under separate accounting services and chief compliance officer (“CCO”) employment agreements, Van Kampen Investments Inc. (“VKII”), provided accounting services and the CCO provided compliance services to the Acquired Fund. Pursuant to such agreements, the Acquired Fund paid $132,079 to VKII.

  Also, the Trust has entered into service agreements whereby State Street Bank & Trust Company (“SSB”) serves as the custodian and fund accountant and provides certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. Prior to the Reorganization, the Acquired Fund paid $6,763 to Van Kampen Investor Services Inc., which served as the Acquired Fund’s transfer agent. For the year ended December 31, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. Prior to the Reorganization, the Acquired Fund had entered into master distribution agreements with Van Kampen Funds Inc. (“VKFI”) to serve as the distributor for the Class II shares. Pursuant to such agreements, the Acquired Fund paid $2,234,083 to VKFI. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	1,822,649,526	$	11,174,081	$	—	$	1,833,823,607

NOTE 4—Derivative Investments

The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Invesco Van Kampen V.I. Comstock Fund

Effect of Derivative Instruments for the year ended December 31, 2010

The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on
	Statement of Operations
	Futures Contracts
Realized Gain (Loss)
Interest rate risk	$	(11,884,840	)

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  For the period June 1, 2010 to December 31, 2010, the Fund paid legal fees of $1,737 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. Prior to the Reorganization, the Acquired Fund recognized expense of $25,856 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom LLP, of which a director of the Acquired Fund was a partner of such firm and he and his law firm provided legal services as legal counsel to the Acquired 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. 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 Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	3,082,298	$	103,611,352

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	25,920,907
Unrealized appreciation (depreciation) — investments		(57,574,491	)
Temporary book/tax differences		(11,197	)
Capital loss carryforward		(549,284,891	)
Shares of beneficial interest		2,469,055,472
Total net assets	$	1,888,105,800

  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.

Invesco Van Kampen V.I. Comstock Fund

  The Fund utilized $49,021,247 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	208,187,062
December 31, 2017		341,097,829
Total capital loss carryforward	$	549,284,891

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $385,998,311 and $1,044,894,421, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	147,522,622
Aggregate unrealized (depreciation) of investment securities		(205,097,113	)
Net unrealized depreciation of investment securities	$	(57,574,491	)
Cost of investments for tax purposes is $1,891,398,098.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of net operating losses, on December 31, 2010, undistributed net investment income was decreased by $5,717, undistributed net realized gain was decreased by $5 and shares of beneficial interest increased by $5,722. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	For the						For the
	Year Ended						Year Ended
	December 30, 2010(a)						December 31, 2009
	Shares			Amount			Shares			Amount
Sales:
Series I		7,436,847		$	85,067,642			2,067,749		$	18,516,951
Series II		7,860,095			81,647,180			22,069,383			175,290,449
Total Sales		15,296,942		$	166,714,822			24,137,132		$	193,807,400
Dividend Reinvestment:
Series I		18,487		$	193,186			714,104		$	8,041,700
Series II		277,000			2,889,112			11,583,228			95,569,652
Total Dividend Reinvestment		295,487		$	3,082,298			12,297,332		$	103,611,352
Repurchases:
Series I		(3,029,626	)	$	(31,801,304	)		(11,459,451	)	$	(93,050,713	)
Series II		(79,919,957	)		(810,088,537	)		(95,145,270	)		(766,378,840	)
Total Repurchases		(82,949,583	)	$	(841,889,841	)		(106,604,721	)	$	(859,429,553	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 77% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 11—Change in Independent Registered Public Accounting Firm (Unaudited)

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Invesco Van Kampen V.I. Comstock Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco Van Kampen V.I. Comstock Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen V.I. Comstock Fund (formerly known as Van Kampen Life Investment Trust Comstock Portfolio; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 19, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco Van Kampen V.I. Comstock Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Series	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
I	$	1,000.00	$	1,230.04	$	3.26	$	1,022.28	$	2.96		0.58	%
II		1,000.00		1,229.72		4.66		1,021.02		4.23		0.83

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco Van Kampen V.I. Comstock 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100.00%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco Van Kampen V.I. Comstock Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco Van Kampen V.I. Equity and Income Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VK-VIEQI-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the 12 months ended December 31, 2010, Invesco Van Kampen V.I. Equity and Income Fund underperformed the Russell 1000 Value Index, but, excluding variable product issuer charges, outperformed the Barclays Capital U.S. Government/Credit Index. Stock selection in various sectors was the primary driver of the Fund’s relative performance, based on our bottom-up stock selection approach.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	12.11	%
Series II Shares	12.03
Russell 1000 Value Index▼	15.51
Barclays Capital U.S. Government/Credit Index▼	6.59

^▼Lipper Inc.

How we invest

We describe our investment philosophy as “value with a catalyst.” We believe that undervalued companies that are experiencing positive changes (i.e., “catalysts”) have the potential to generate long-term stock price growth for shareholders. We generally seek to identify companies that are out of favor with investors, underearning relative to their potential and are attractively valued. For these companies, we attempt to identify catalysts that may improve the financial results and/or correct the undervaluation. Examples of catalysts typically include improving operational efficiency, changing industry dynamics and/or a change in management.

     We initially identify potential investments through a series of quantitative screens including, but not limited to, return on capital and enterprise value to sales metrics. We then conduct fundamental research on the most attractive opportunities. The research process includes a thorough review of a company’s financial statements, an evaluation of its competitive position and stability, and meetings with its executives. During the research process, we

also value the company under various scenarios to determine if the investment is an attractive opportunity relative to its risks. This is also where we typically identify the positive catalyst, a prerequisite for potential investment. Finally, we generally set a price target for a stock based on normalized earnings and historical valuation multiples.

     In short, our objective is to exploit negative sentiment toward a company’s stock by analyzing the company’s operations in the context of a cyclical environment and identifying one or more catalysts that may improve the company’s financial performance. Improved financial performance, in turn, has the potential to drive the company’s stock price higher.

     We typically sell an investment when it reaches our estimate of fair value or when we identify a more attractive investment opportunity.

     The Fund also invests in convertible securities, investment-grade corporate bonds and U.S. government-issued bonds. The fixed-income portion of the portfolio has the potential to reduce volatility compared to an equity-only portfolio and provide some downside protection during periods of stock market volatility.

Market conditions and your Fund

Equity markets were choppy during the fiscal year as investors weighed the competing issues of solid corporate profits and soft macroeconomic data. Corporate earnings were largely positive, but often overshadowed by concerns about high unemployment, a lack of consumer spending, soft housing data and the possibility of additional Federal Reserve accommodation. After rising through April, major equity indexes sold off precipitously in May as the sovereign debt crisis unfolded in the eurozone while U.S. economic indicators remained weak, prompting fears of a double-dip recession. Uncertainty created by the debt crisis combined with subdued employment, consumer spending and housing data added to concerns that the recovery was slowing to a subnormal growth rate. Just as abruptly, however, the markets reversed course starting in September and rallied through the end of the year on modestly better economic news. The major equity indexes produced positive returns for the fiscal year, and all 10 sectors within the S&P 500 Index posted gains. More economically sensitive sectors such as consumer discretionary and industrials had the highest returns, while less economically sensitive sectors such as health care had some of the lowest returns.

     The broad U.S. bond market — as measured by the Barclays Capital U.S. Aggregate Index — generated positive total return for the 12-month period ended December 31, 2010. At the beginning of the period, falling interest rates across maturities combined with tighter credit spreads (the difference between the yields of U.S. Treasuries and other types of fixed-income securities that carry credit risk) caused bond prices to rise. Conversely, a marked rise in rates late in the year negatively affected bond

Portfolio Composition

By security type, based on Net Assets
as of December 31, 2010

Common Stocks & Other
Equity Interests	65.1	%
U.S. Dollar Denominated Bonds
& Notes	20.6
U.S. Treasury Securities	7.1
Preferred Stocks	2.0
U.S. Government Sponsored
Agency Securities	0.8
Money Market Funds
Plus Other Assets Less Liabilities	4.4

Top 10 Equity Holdings*

1.	JPMorgan Chase & Co.	3.1	%
2.	General Electric Co.	2.6
3.	Marsh & McLennan Cos., Inc.	2.1
4.	Viacom Inc.	1.9
5.	Occidental Petroleum Corp.	1.7
6.	Anadarko Petroleum Corp.	1.5
7.	eBay, Inc.	1.5
8.	Tyco International Ltd.	1.3
9.	American Electric Power Co., Inc.	1.3
10.	Royal Dutch Shell PLC	1.3

Top Five Industries

1.	Other Diversified Financial Services	6.4	%
2.	Integrated Oil & Gas	5.4
3.	Pharmaceuticals	4.7
4.	Industrial Conglomerates	4.6
5.	U.S. Treasury Notes	3.9

Total Net Assets	$800.5 million
Total Number of Holdings*		324

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.

Invesco Van Kampen V.I. Equity and Income Fund

prices, particularly in U.S. Treasuries.

     The Fund benefitted from an overweight position and stock selection in the consumer discretionary sector. The Fund’s overweight position in the sector was an emphasis mainly within media stocks, which benefited from an increase in advertising revenue during the period. Viacom, a top holding, performed well throughout the period. The company reduced costs, was disciplined with its capital and grew advertising revenue.

     Stock selection within the health care sector also contributed to relative performance. Genzyme, a biotechnology company, received a takeover offer from Sanofi-aventis (not a Fund holding). The stock rose significantly on the news and we eliminated the position.

     The information technology and financial sectors detracted from Fund performance. Within technology, an overweight position coupled with large exposure to hardware/equipment stocks and software services dampened returns. Stock selection in hardware and equipment detracted the most from relative performance. Additionally, the unexpected departure of Hewlett Packard’s CEO weighed heavily on the shares. The Fund continued to own the stock as of the end of the reporting period.

     The Fund maintained a relative underweight to the financials sector, although we cautiously increased exposure to some banks and capital markets companies that we believe had improved their balance sheets and are now better capitalized.

     Real estate was a strong performing asset class during the fiscal year, but the Fund had no exposure and did not participate in the upside within the industry.

     The Fund’s fixed-income holdings also produced positive returns for the full period despite a marked rise in rates late in the year that negatively affected bond prices. Outperformance was mainly due to a sustained overweight position in investment-grade corporate bonds. A consistent underweight position in U.S. government securities also aided both absolute and relative performance as investor preference for credit risk and rising interest rates late in the year dampened returns for U.S. government bonds. The Fund also used active duration and yield curve positioning within the fixed income allocation for risk management and generating outperformance versus its benchmark. U.S. Treasury futures were the main tool used in managing portfolio level duration. The contribution to relative performance from both duration and yield curve positioning

was mixed over the Fund’s fiscal year, but overall had a negligible effect.

     Equity markets experienced a strong recovery during the period covered by this report. We believe the market volatility that occurred during 2010 will continue to create opportunities to invest in companies with attractive valuations and strong fundamentals. We believe that ultimately those valuations and fundamentals will be reflected in those companies’ stock prices.

     As always, we would like to caution investors against making investment decisions based on short-term performance. We recommend that you consult a financial adviser to discuss your individual financial program.

     Thank you for your investment in Invesco Van Kampen V.I. Equity and Income Fund and for sharing our long-term investment horizon.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Thomas Bastian
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco Van Kampen V.I. Equity and Income Fund. Mr. Bastian joined Invesco in 2010.
He earned a B.A. in accounting from St. John’s University and an M.B.A. in finance from the University of Michigan.

Cindy Brien
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Equity and Income Fund. Ms. Brien joined Invesco in 1996. She earned a B.B.A. from The University of Texas at Austin.

Chuck Burge
Portfolio manager, is manager of Invesco Van Kampen V.I. Equity and Income Fund. Mr. Burge joined Invesco in 2002. He earned a B.S. in economics from Texas A&M University and an M.B.A. in finance and accounting from Rice University.

Mark Laskin
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Equity and Income Fund. Mr. Laskin joined Invesco in 2010. He earned a B.A. in history from Swarthmore College and an M.B.A. and M.A. from the Wharton School and Lauder Institute, respectively, of the University of Pennsylvania.

Mary Jayne Maly
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Equity and Income Fund. Ms. Maly joined Invesco in 2010. She earned a B.A. from the University of Pittsburgh and an M.B.A. from the American Graduate School of International Management.

Sergio Marcheli
Portfolio manager, is manager of Invesco Van Kampen V.I. Equity and Income Fund. Mr. Marcheli joined Invesco in 2010. He earned a B.B.A. from the University of Houston and an M.B.A. from the University of St. Thomas.

James Roeder
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Equity and Income Fund. Mr. Roeder joined Invesco in 2010. He earned a B.S. in accounting from Clemson University and an M.B.A. in economics and finance from the University of Chicago Graduate School of Business. Mr. Roeder is a Certified Public Accountant.

Invesco Van Kampen V.I. Equity and Income Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Fund and index data from 4/30/03

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception		7.44	%
	5 Years	4.32
	1 Year	12.11
Series II Shares
Inception (4/30/03)		7.43	%
	5 Years	4.31
	1 Year	12.03

Effective June 1, 2010, Class II shares of the predecessor fund advised by Morgan Stanley Investment Management Inc. were reorganized into Series II shares of Invesco Van Kampen V.I. Equity and Income Fund. Returns shown above for Series II shares are blended returns of the predecessor fund and Invesco Van Kampen V.I. Equity and Income Fund. Share class returns will differ from the predecessor fund because of different expenses.

     Series I shares incepted on June 1, 2010. Series I shares performance shown prior to that date is that of the predecessor fund’s Class II shares and includes the 12b-1 fees applicable to the predecessor fund’s Class II shares. Class II shares performance reflects any applicable fee waivers or expense

reimbursements. The inception date of the predecessor fund’s Class II shares is April 30, 2003.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.71% and 0.76%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.73% and 0.98%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco Van Kampen V.I. Equity and Income Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco Van Kampen V.I. Equity and Income Fund

Invesco Van Kampen V.I. Equity and Income Fund’s investment objectives are both capital appreciation and current income.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

The ability of the Fund’s equity securities to generate income generally depends on the earnings and the continuing declaration of dividends by the issuers of such securities. The interest income on debt securities generally is affected by prevailing interest rates, which can vary widely over the short- and long-term. If dividends are reduced or discontinued or interest rates drop, distributions to shareholders from the Fund may drop as well.

     If interest rates fall, it is possible that issuers of callable securities held by the Fund will call or prepay their securities before their maturity dates. In this event, the proceeds from the called securities would most likely be reinvested by the Fund in securities bearing the new, lower interest rates, resulting in a possible decline in the Funds’ income and distributions to shareholders and termination of any conversion option on convertible securities.

     Credit risk refers to an issuer’s ability to make timely payments of interest and principal. Because the Fund generally invests only in investment grade-quality debt securities, it is subject to a lower level of credit risk than a fund investing in lower-quality securities.

     The risks of investing in securities of foreign issuers can include fluctuations in foreign currencies, foreign currency exchange controls, political and economic instability, differences in financial reporting, differences in securities regulation and trading, and foreign taxation issues. The Fund may also invest in issuers in developing or emerging market countries, which are subject to greater risks than investments in securities of issuers in developed countries.

     Investing in real estate investment trusts (REITs) makes the Fund more susceptible to risks associated with the ownership of real estate and with the real estate industry in general and may involve duplication of management fees and certain other expenses. In addition, REITs depend upon specialized management skills, may be less diversified, may have lower trading volume, and may be subject to more abrupt or erratic price movements than the overall securities markets.

     Risks of derivatives include the possible imperfect correlation between the value of the instruments and the underlying assets; risks of default by the other party to certain transactions; risks that the transactions may result in losses that partially or completely offset gains in portfolio positions; and risks that the transactions may not be liquid.

     Market risk is the possibility that the market values of securities owned by the Fund will decline. Market risk may affect a single issuer, industry, sector of the economy or the market as a whole. The securities of small- and medium-sized companies are subject to more abrupt or erratic market movements and may have lower trading volumes or more erratic trading than securities of larger companies or the market averages in general. Investments in debt securities generally are affected by changes in interest rates and the creditworthiness of the issuer. The prices of such securities tend to fall as interest rates rise, and such declines tend to be greater among securities with longer maturities. The value of a convertible security tends to decline as interest rates rise and, because of the conversion feature, tends to vary with fluctuations in the market value of the underlying equity security.

About indexes used in this report

The Russell 1000^® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Barclays Capital U.S. Government/Credit Index includes treasuries and agencies that represent the government portion of the index, and includes publicly issued U.S. corporate and foreign debentures and secured notes that meet specified maturity, liquidity, and quality requirements to represent the credit interests.

     The Barclays Capital U.S. Aggregate Index is an unmanaged index considered representative of the U.S. investment-grade, fixed-rate bond market.

     The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     CPA^® and Certified Public Accountant^® are trademarks owned by the American Institute of Certified Public Accountants.

     Industry classifications used in this report are generally classified 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco Van Kampen V.I. Equity and Income Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–65.17%
Air Freight & Logistics–0.35%
FedEx Corp.		30,096	$	2,799,229
Asset Management & Custody Banks–0.74%
State Street Corp.		127,886		5,926,237
Automobile Manufacturers–1.10%
Ford Motor Co.(b)		287,686		4,830,248
General Motors Co.(b)		107,542		3,963,998
				8,794,246
Cable & Satellite–2.04%
Comcast Corp.–Class A		427,769		9,398,085
Time Warner Cable, Inc.		104,659		6,910,634
				16,308,719
Communications Equipment–0.69%
Cisco Systems, Inc.(b)		273,702		5,536,991
Computer Hardware–1.77%
Dell, Inc.(b)		473,547		6,416,562
Hewlett-Packard Co.		184,172		7,753,641
				14,170,203
Consumer Electronics–0.76%
Sony Corp.–ADR (Japan)		171,048		6,108,124
Data Processing & Outsourced Services–0.72%
Western Union Co.		309,354		5,744,704
Diversified Banks–1.08%
U.S. Bancorp.		129,594		3,495,150
Wells Fargo & Co.		166,671		5,165,134
				8,660,284
Diversified Chemicals–1.25%
Dow Chemical Co. (The)		147,424		5,033,055
PPG Industries, Inc.		59,592		5,009,900
				10,042,955
Diversified Support Services–0.36%
Cintas Corp.		102,009		2,852,172
Drug Retail–1.01%
Walgreen Co.		208,384		8,118,641
Electric Utilities–2.57%
American Electric Power Co., Inc.		287,312		10,337,486
Edison International		85,117		3,285,516
Entergy Corp.		45,564		3,227,298
FirstEnergy Corp.		100,283		3,712,477
				20,562,777
Food Distributors–0.61%
Sysco Corp.		166,561		4,896,893
Health Care Distributors–0.43%
Cardinal Health, Inc.		90,020		3,448,666
Health Care Equipment–0.80%
Covidien PLC (Ireland)		139,464		6,367,926
Home Improvement Retail–0.94%
Home Depot, Inc. (The)		213,684		7,491,761
Household Products–1.24%
Procter & Gamble Co. (The)		154,941		9,967,355
Human Resource & Employment Services–0.76%
Manpower Inc.		55,568		3,487,448
Robert Half International, Inc.		86,130		2,635,578
				6,123,026
Hypermarkets & Super Centers–0.65%
Wal-Mart Stores, Inc.		97,144		5,238,976
Industrial Conglomerates–3.94%
General Electric Co.		1,140,960		20,868,158
Tyco International Ltd.		257,963		10,689,987
				31,558,145
Industrial Machinery–1.13%
Dover Corp.		47,458		2,773,920
Ingersoll-Rand PLC (Ireland)		132,521		6,240,414
				9,014,334
Insurance Brokers–2.12%
Marsh & McLennan Cos., Inc.		619,675		16,941,914
Integrated Oil & Gas–5.32%
ConocoPhillips		61,568		4,192,781
Exxon Mobil Corp.		77,043		5,633,384
Hess Corp.		121,382		9,290,578
Occidental Petroleum Corp.		134,788		13,222,703
Royal Dutch Shell PLC–ADR (United Kingdom)		153,571		10,255,471
				42,594,917
Integrated Telecommunication Services–0.75%
Verizon Communications, Inc.		167,452		5,991,433

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Equity and Income Fund

	Shares		Value
Internet Software & Services–2.26%
eBay, Inc.(b)		432,556	$	12,038,034
Yahoo! Inc.(b)		363,456		6,044,273
				18,082,307
Investment Banking & Brokerage–1.94%
Charles Schwab Corp. (The)		459,040		7,854,174
LPL Investment Holdings, Inc.(b)		16,091		585,230
Morgan Stanley		259,344		7,056,750
				15,496,154
IT Consulting & Other Services–0.59%
Amdocs Ltd.(b)		171,323		4,706,243
Life & Health Insurance–0.56%
Principal Financial Group, Inc.		138,906		4,522,779
Managed Health Care–1.21%
UnitedHealth Group, Inc.		268,818		9,707,018
Movies & Entertainment–3.13%
Time Warner, Inc.		306,888		9,872,587
Viacom Inc.–Class B		382,810		15,163,104
				25,035,691
Office Services & Supplies–0.71%
Avery Dennison Corp.		134,047		5,675,550
Oil & Gas Equipment & Services–1.39%
Cameron International Corp.(b)		40,676		2,063,493
Schlumberger Ltd.		108,149		9,030,442
				11,093,935
Oil & Gas Exploration & Production–2.57%
Anadarko Petroleum Corp.		160,875		12,252,240
Devon Energy Corp.		69,619		5,465,788
Noble Energy, Inc.		33,476		2,881,614
				20,599,642
Oil & Gas Storage & Transportation–0.20%
Williams Cos., Inc. (The)		66,195		1,636,340
Other Diversified Financial Services–5.29%
Bank of America Corp.		765,196		10,207,715
Citigroup, Inc.(b)		1,495,192		7,072,258
JPMorgan Chase & Co.		590,955		25,068,311
				42,348,284
Packaged Foods & Meats–1.81%
Kraft Foods, Inc.–Class A		241,926		7,623,088
Unilever N.V. New York Shares (Netherlands)		218,596		6,863,915
				14,487,003
Personal Products–1.02%
Avon Products, Inc.		279,992		8,136,568
Pharmaceuticals–3.89%
Abbott Laboratories		70,828		3,393,369
Bristol-Myers Squibb Co.		320,113		8,476,592
Merck & Co., Inc.		134,540		4,848,822
Pfizer, Inc.		548,892		9,611,099
Roche Holdings AG–ADR (Switzerland)		131,158		4,819,401
				31,149,283
Property & Casualty Insurance–0.50%
Chubb Corp. (The)		66,744		3,980,612
Regional Banks–1.99%
BB&T Corp.		114,090		2,999,426
Fifth Third Bancorp		209,637		3,077,471
PNC Financial Services Group, Inc.		161,889		9,829,900
				15,906,797
Semiconductors–0.59%
Intel Corp.		225,857		4,749,773
Soft Drinks–0.83%
Coca-Cola Co. (The)		61,481		4,043,605
Coca-Cola Enterprises, Inc.		103,815		2,598,490
				6,642,095
Specialty Chemicals–0.27%
LyondellBasell Industries N.V.–Class A (Netherlands)(b)		62,098		2,136,171
Systems Software–0.17%
Microsoft Corp.		47,781		1,334,046
Wireless Telecommunication Services–1.12%
Vodafone Group PLC–ADR (United Kingdom)		338,575		8,948,537
Total Common Stocks & Other Equity Interests (Cost $453,199,748)				521,635,456
	Principal
	Amount
Bonds & Notes–20.56%
Advertising–0.51%
Interpublic Group of Cos., Inc. (The), Sr. Unsec. Conv. Global Putable Notes,
4.25%, 03/15/23	$	1,805,000		2,019,344
4.75%, 03/15/23		1,638,000		1,922,602
WPP Finance (United Kingdom), Sr. Unsec. Gtd. Global Notes, 8.00%, 09/15/14		100,000		115,313
				4,057,259

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Equity and Income Fund

	Principal
	Amount		Value
Aerospace & Defense–0.02%
Raytheon Co., Sr. Unsec. Notes, 1.63%, 10/15/15	$	160,000	$	153,754
Systems 2001 Asset Trust LLC (United Kingdom)–Series 2001, Class  G, Jr. Sec. Gtd. Notes, (INS–MBIA Insurance Corp.) 6.66%, 09/15/13(c)		—		—
				153,754
Agricultural Products–0.03%
Corn Products International, Inc., Sr. Unsec. Notes, 6.63%, 04/15/37		215,000		224,873
Air Freight & Logistics–0.00%
FedEx Corp., Sr. Unsec. Gtd. Global Notes, 7.25%, 02/15/11		10,000		10,078
Airlines–0.06%
Continental Airlines, Inc.–Series 2010-1, Class A, Sec. Pass Through Ctfs., 4.75%, 01/12/21		270,000		270,506
Delta Air Lines, Inc.–Series 2010-1, Class A, Sec. Pass Through Ctfs., 6.20%, 07/02/18		230,000		246,963
				517,469
Application Software–0.12%
Adobe Systems, Inc., Sr. Unsec. Global Notes, 4.75%, 02/01/20		185,000		189,974
Cadence Design Systems, Inc.–Series B, Sr. Unsec. Conv. Global Notes, 1.50%, 12/15/13		860,000		812,700
				1,002,674
Asset Management & Custody Banks–0.53%
Affiliated Managers Group, Inc., Sr. Unsec. Conv. Putable Notes, 3.95%, 08/15/38		2,511,000		2,793,487
Janus Capital Group, Inc., Sr. Unsec. Conv. Notes, 3.25%, 07/15/14		1,225,000		1,457,750
				4,251,237
Auto Parts & Equipment–0.50%
Borg Warner Automotive, Inc., Sr. Unsec. Conv. Notes, 3.50%, 04/15/12		1,772,000		3,971,495
Automobile Manufacturers–0.97%
Daimler Finance North America LLC, Unsec. Gtd. Unsub. Global Notes, 7.30%, 01/15/12		170,000		181,119
Ford Motor Co., Sr. Unsec. Conv. Notes, 4.25%, 11/15/16		3,775,000		7,564,156
				7,745,275
Automotive Retail–0.12%
Advance Auto Parts, Inc., Sr. Unsec. Gtd. Notes, 5.75%, 05/01/20		525,000		545,344
AutoZone, Inc., Sr. Unsec. Global Notes, 6.50%, 01/15/14		360,000		399,682
				945,026
Biotechnology–0.99%
Cephalon, Inc., Sr. Unsec. Sub. Conv. Notes, 2.50%, 05/01/14		2,659,000		3,027,936
Gilead Sciences, Inc., Sr. Conv. Notes, 1.63%, 05/01/16(c)		4,665,000		4,874,925
				7,902,861
Brewers–0.14%
Anheuser-Busch InBev Worldwide Inc., Sr. Unsec. Gtd. Global Notes,
2.50%, 03/26/13		180,000		183,935
3.63%, 04/15/15		340,000		352,008
Sr. Unsec. Gtd. Notes, 7.20%, 01/15/14(c)		215,000		246,279
FBG Financial Ltd. (Australia), Sr. Unsec. Gtd. Notes, 5.13%, 06/15/15(c)		295,000		318,273
				1,100,495
Broadcasting–0.01%
COX Communications Inc., Sr. Unsec. Bonds, 8.38%, 03/01/39(c)		50,000		64,613
Cable & Satellite–0.23%
Comcast Corp., Sr. Unsec. Gtd. Notes, 5.15%, 03/01/20		160,000		168,483
Sr. Unsec. Gtd. Global Notes, 5.70%, 05/15/18		400,000		438,975
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 05/15/16		410,000		456,125
Time Warner Cable Inc., Sr. Unsec. Gtd. Global Notes, 8.75%, 02/14/19		200,000		255,367
Sr. Unsec. Gtd. Notes,
6.75%, 06/15/39		130,000		143,808
5.88%, 11/15/40		405,000		402,588
				1,865,346
Casinos & Gaming–0.81%
International Game Technology, Sr. Unsec. Conv. Notes, 3.25%, 05/01/14		3,013,000		3,491,314
MGM Resorts International, Sr. Unsec. Gtd. Conv. Notes, 4.25%, 04/15/15(c)		2,731,000		3,004,100
				6,495,414
Coal & Consumable Fuels–0.40%
Massey Energy Co., Sr. Unsec. Gtd. Conv. Notes, 3.25%, 08/01/15		3,271,000		3,209,669
Communications Equipment–0.89%
Alcatel-Lucent USA, Inc.–Series B, Sr. Unsec. Gtd. Conv. Putable Notes, 2.88%, 06/15/25		4,401,000		4,175,449
Ciena Corp., Sr. Unsec. Conv. Notes, 0.25%, 05/01/13		1,336,000		1,229,120
Corning, Inc., Sr. Unsec. Notes, 6.63%, 05/15/19		35,000		40,355

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Equity and Income Fund

	Principal
	Amount		Value
Communications Equipment–(continued)
JDS Uniphase Corp., Sr. Unsec. Conv. Putable Notes, 1.00%, 05/15/26	$	662,000	$	630,555
1.00%, 05/15/26(c)		1,100,000		1,047,750
				7,123,229
Computer Storage & Peripherals–0.73%
SanDisk Corp., Sr. Unsec. Conv. Notes, 1.00%, 05/15/13		6,064,000		5,866,920
Construction Materials–0.55%
Cemex S.A.B. de C.V., (Mexico), Unsec. Sub. Conv. Notes, 4.88%, 03/15/15(c)		3,900,000		4,280,250
Holcim U.S. Finance Sarl & Cie SCS (Switzerland), Sr. Unsec. Gtd. Notes, 6.00%, 12/30/19(c)		85,000		88,692
				4,368,942
Construction, Farm Machinery & Heavy Trucks–0.12%
Navistar International Corp., Sr. Unsec. Sub. Conv. Notes, 3.00%, 10/15/14		722,000		967,480
Consumer Finance–0.15%
American Express Co., Sr. Unsec. Notes, 8.13%, 05/20/19		555,000		686,738
Capital One Bank USA NA, Sub. Notes, 8.80%, 07/15/19		400,000		494,531
				1,181,269
Department Stores–0.03%
Macy’s Retail Holdings, Inc., Sr. Unsec. Gtd. Notes, 5.35%, 03/15/12		235,000		243,813
Diversified Banks–1.24%
Abbey National Treasury Services PLC, Sr. Unsec. Gtd. Notes, 3.88%, 11/10/14(c)		210,000		207,615
Ally Financial, Inc., Gtd. Notes, 2.20%, 12/19/12		500,000		514,155
Bank of Nova Scotia (Canada), Sr. Unsec. Global Notes, 2.38%, 12/17/13		360,000		370,077
Barclays Bank PLC (United Kingdom), Sr. Unsec. Global Notes, 6.75%, 05/22/19		485,000		549,430
Unsec. Sub. Global Notes, 5.14%, 10/14/20		275,000		249,125
Commonwealth Bank of Australia (Australia), Sr. Unsec. Notes, 5.00%, 10/15/19(c)		285,000		296,592
Credit Suisse AG (Switzerland), Sub. Global Notes, 5.40%, 01/14/20		550,000		562,793
Unsec. Sub. Global Notes, 6.00%, 02/15/18		70,000		75,412
Groupe BPCE S.A. (France), Sr. Unsec. Notes, 2.38%, 10/04/13(c)		390,000		389,034
HBOS PLC (United Kingdom)–Series G, Unsec. Sub. Medium-Term Notes, 6.75%, 05/21/18(c)		325,000		304,196
HSBC Bank PLC (United Kingdom), Notes, 4.13%, 08/12/20(c)		565,000		553,434
HSBC Finance Corp., Sr. Unsec. Global Notes, 6.38%, 10/15/11		445,000		464,859
6.75%, 05/15/11		120,000		122,624
Korea Development Bank (South Korea), Sr. Unsec. Global Notes, 4.38%, 08/10/15		200,000		205,446
Lloyds TSB Bank PLC (United Kingdom), Sr. Unsec. Gtd. Medium-Term Notes, 5.80%, 01/13/20(c)		185,000		182,422
National Australia Bank Ltd. (Australia), Sr. Unsec. Bonds, 3.75%, 03/02/15(c)		190,000		196,567
Nordea Bank AB (Sweden), Sr. Notes, 4.88%, 01/27/20(c)		245,000		251,825
Rabobank Nederland N.V. (Netherlands), Sr. Unsec. Notes, 4.75%, 01/15/20(c)		490,000		501,310
Royal Bank of Scotland PLC (The) (United Kingdom), Sr. Unsec. Gtd. Global Notes, 4.88%, 03/16/15		420,000		427,857
Santander US Debt SA Unipersonal (Spain), Sr. Unsec. Gtd. Notes, 3.72%, 01/20/15(c)		200,000		197,821
Societe Generale (France), Sr. Unsec. Notes, 2.50%, 01/15/14(c)		705,000		705,110
Standard Chartered Bank (United Kingdom), Unsec. Sub. Notes, 6.40%, 09/26/17(c)		100,000		106,888
Standard Chartered PLC (United Kingdom), Sr. Unsec. Notes, 3.85%, 04/27/15(c)		255,000		260,656
US Bancorp, Sr. Unsec. Notes, 2.00%, 06/14/13		480,000		487,363
US Bank N.A., Sub. Variable Rate Notes, 3.78%, 04/29/20(d)		450,000		458,637
Wells Fargo & Co., Sr. Unsec. Notes, 5.63%, 12/11/17		795,000		885,598
Westpac Banking Corp. (Australia), Sr. Unsec. Global Notes, 2.10%, 08/02/13		400,000		403,750
				9,930,596
Diversified Capital Markets–0.10%
Credit Suisse New York (Switzerland), Sr. Unsec. Global Notes, 5.30%, 08/13/19		170,000		179,803
Sr. Unsec. Medium-Term Notes, 4.38%, 08/05/20		395,000		387,337
UBS AG (Switzerland), Sr. Unsec. Medium-Term Notes, 5.88%, 12/20/17		225,000		247,924
				815,064
Diversified Metals & Mining–0.12%
Anglo American Capital PLC (United Kingdom), Sr. Unsec. Gtd. Notes, 9.38%, 04/08/19(c)		200,000		265,488
Freeport-McMoRan Copper & Gold Inc., Sr. Unsec. Notes, 8.38%, 04/01/17		305,000		336,930
Rio Tinto Finance USA Ltd. (Australia), Sr. Unsec. Gtd. Global Notes, 9.00%, 05/01/19		265,000		356,423
				958,841

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Equity and Income Fund

	Principal
	Amount		Value
Drug Retail–0.05%
CVS Caremark Corp., Sec. Global Pass Through Ctfs., 6.04%, 12/10/28	$	351,331	$	355,416
Sec. Pass Through Ctfs., 8.35%, 07/10/31(c)		34,156		40,810
				396,226
Electric Utilities–0.17%
Electricite de France S.A. (France), Sr. Unsec. Notes, 4.60%, 01/27/20(c)		125,000		130,089
Enel Finance International S.A. (Luxembourg)-Sr. Unsec. Gtd. Notes, 5.13%, 10/07/19(c)		325,000		322,012
Iberdola Finance Ireland Ltd. (Ireland), Unsec. Unsub. Gtd. Notes, 3.80%, 09/11/14(c)		125,000		124,802
Ohio Power Co.–Series M, Sr. Unsec. Gtd. Notes, 5.38%, 10/01/21		100,000		106,728
Progress Energy Inc., Sr. Unsec. Bonds, 7.05%, 03/15/19		270,000		321,912
Sr. Unsec. Notes, 6.85%, 04/15/12		300,000		322,045
				1,327,588
Electronic Components–0.01%
Corning, Inc., Sr. Unsec. Notes, 7.25%, 08/15/36		55,000		62,456
Environmental & Facilities Services–0.05%
Waste Management, Inc., Sr. Unsec. Gtd. Notes, 5.00%, 03/15/14		340,000		367,706
Food Retail–0.17%
Delhaize Group S.A. (Belgium), Sr. Unsec. Gtd. Bonds, 5.88%, 02/01/14		165,000		181,719
Safeway, Inc., Sr. Unsec. Global Notes, 3.95%, 08/15/20		595,000		564,906
WM Wrigley Jr. Co., Sr. Sec. Gtd. Floating Rate Notes, 1.68%, 06/28/11(c)		650,000		651,010
				1,397,635
Gold–0.08%
Gold Fields Orogen Holding BVI Ltd. (Mali), Sr. Unsec. Notes, 4.88%, 10/07/20(c)		665,000		634,220
Health Care Equipment–0.42%
Boston Scientific Corp., Sr. Unsec. Notes, 5.45%, 06/15/14		410,000		435,115
CareFusion Corp., Sr. Unsec. Global Notes, 4.13%, 08/01/12		300,000		312,420
Teleflex Inc., Sr. Unsec. Sub. Conv. Notes, 3.88%, 08/01/17		1,005,000		1,060,275
Wright Medical Group, Inc., Sr. Unsec. Conv. Notes, 2.63%, 12/01/14		1,640,000		1,551,850
				3,359,660
Health Care Facilities–0.35%
Lifepoint Hospitals Inc., Sr. Unsec. Sub. Conv. Notes, 3.50%, 05/15/14		2,770,000		2,808,087
Health Care Services–0.37%
Express Scripts Inc., Sr. Unsec. Gtd. Global Notes, 5.25%, 06/15/12		840,000		888,334
Medco Health Solutions Inc., Sr. Unsec. Notes, 2.75%, 09/15/15		190,000		188,948
Omnicare Inc., Sr. Conv. Sub. Notes, 3.75%, 12/15/25		971,000		1,087,520
Series OCR, Sr. Unsec. Gtd. Conv. Putable Deb., 3.25%, 12/15/35		863,000		796,118
				2,960,920
Home Improvement Retail–0.03%
Home Depot, Inc., Sr. Unsec. Global Notes, 5.88%, 12/16/36		210,000		219,385
Hotels, Resorts & Cruise Lines–0.32%
Gaylord Entertainment Co., Sr. Gtd. Conv. Notes, 3.75%, 10/01/14(c)		1,728,000		2,527,200
Hypermarkets & Super Centers–0.02%
Wal-Mart Stores, Inc., Sr. Unsec. Global Notes, 5.25%, 09/01/35		120,000		121,365
6.50%, 08/15/37		45,000		53,214
				174,579
Industrial Conglomerates–0.69%
General Electric Capital Corp., Sr. Unsec. Medium-Term Global Notes,
5.63%, 05/01/18		295,000		321,457
5.88%, 01/14/38		120,000		125,110
Series G, Sr. Gtd. Medium-Term Global Notes, 2.63%, 12/28/12		3,150,000		3,266,550
Sr. Unsec. Medium-Term Notes, 6.00%, 08/07/19		65,000		72,784
General Electric Co., Sr. Unsec. Global Notes, 5.25%, 12/06/17		440,000		473,713
NBC Universal, Inc., Sr. Unsec. Notes 2.10%, 04/01/14(c)		200,000		199,965
5.95%, 04/01/41(c)		190,000		190,843
Textron Inc., Sr. Unsec. Conv. Notes, 4.50%, 05/01/13		474,000		902,970
				5,553,392
Integrated Oil & Gas–0.04%
Hess Corp., Sr. Unsec. Global Notes, 5.60%, 02/15/41		170,000		169,534
Shell International Finance B.V. (Finland), Sr. Unsec. Gtd. Global Notes, 3.10%, 06/28/15		110,000		113,037
				282,571

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Equity and Income Fund

	Principal
	Amount		Value
Integrated Telecommunication Services–0.28%
AT&T Corp., Sr. Unsec. Gtd. Global Notes, 8.00%, 11/15/31	$	3,000	$	3,789
AT&T, Inc., Sr. Unsec. Global Notes,
6.15%, 09/15/34		125,000		130,497
6.30%, 01/15/38		610,000		647,228
Sr. Unsec. Notes, 5.35%, 09/01/40(c)		97,000		91,160
Deutsche Telekom International Finance B.V. (Netherlands), Sr. Unsec. Gtd. Global Bonds, 8.75%, 06/15/30		140,000		188,207
Telecom Italia Capital S.A. (Luxembourg), Sr. Unsec. Gtd. Global Notes,
7.00%, 06/04/18		325,000		343,858
7.18%, 06/18/19		140,000		149,714
Verizon Communications, Inc., Sr. Unsec. Global Notes,
6.35%, 04/01/19		235,000		272,066
8.95%, 03/01/39		280,000		401,326
				2,227,845
Internet Retail–0.05%
Expedia Inc., Sr. Unsec. Gtd. Global Notes, 5.95%, 08/15/20		430,000		432,916
Investment Banking & Brokerage–1.09%
Bear Stearns Cos. LLC (The), Sr. Unsec. Global Notes, 7.25%, 02/01/18		285,000		338,277
Charles Schwab Corp. (The), Sr. Unsec. Notes, 4.45%, 07/22/20		465,000		468,998
Goldman Sachs Group Inc. (The), Sr. Unsec. Conv. Medium-Term Notes, 1.00%, 03/15/17(c)		3,328,000		3,303,905
Unsec. Sub. Global Notes, 6.75%, 10/01/37		365,000		376,713
Sr. Unsec. Global Notes, 6.15%, 04/01/18		805,000		885,262
Jefferies Group Inc., Sr. Unsec. Conv. Putable Notes, 3.88%, 11/01/29		1,414,200		1,490,213
Sr. Unsec. Notes, 6.88%, 04/15/21		535,000		563,379
Morgan Stanley, Sr. Unsec. Global Notes, 4.00%, 07/24/15		610,000		617,986
Sr. Unsec. Notes, 3.45%, 11/02/15		715,000		701,995
				8,746,728
Life & Health Insurance–0.23%
Aegon N.V. (Netherlands), Sr. Unsec. Global Bonds, 4.63%, 12/01/15		250,000		258,601
Aflac Inc., Sr. Unsec. Notes, 6.45%, 08/15/40		295,000		306,258
MetLife, Inc, Sr. Unsec. Global Notes,
2.38%, 02/06/14		135,000		135,840
4.75%, 02/08/21		410,000		419,527
5.88%, 02/06/41		135,000		141,983
Pacific LifeCorp., Sr. Notes, 6.00%, 02/10/20(c)		175,000		184,823
Prudential Financial Inc., Series D, Sr. Unsec. Medium-Term Notes,
4.75%, 09/17/15		230,000		244,939
6.63%, 12/01/37		95,000		104,655
7.38%, 06/15/19		70,000		82,307
				1,878,933
Life Sciences Tools & Services–0.39%
Life Technologies Corp., Sr. Unsec. Conv. Putable Notes, 1.50%, 02/15/24		2,545,000		3,085,812
Managed Health Care–0.11%
Aetna Inc, Sr. Unsec. Notes, 3.95%, 09/01/20		550,000		528,263
WellPoint Inc, Sr. Unsec. Notes, 4.35%, 08/15/20		335,000		332,175
				860,438
Movies & Entertainment–0.68%
Liberty Media LLC, Sr. Unsec. Conv. Putable Notes, 3.13%, 03/30/23		4,735,200		5,333,019
Time Warner Inc., Sr. Unsec. Gtd. Notes, 5.88%, 11/15/16		120,000		135,275
				5,468,294
Multi-Line Insurance–0.09%
AIG SunAmerica Global Financing VI, Sr. Sec. Notes, 6.30%, 05/10/11(c)		405,000		413,708
CNA Financial Corp., Sr. Unsec. Global Bonds, 5.88%, 08/15/20		295,000		294,757
				708,465
Multi-Utilities–0.01%
Nisource Finance Corp., Sr. Unsec. Gtd. Bonds, 6.80%, 01/15/19		105,000		119,128
Office REIT’s–0.04%
Digital Realty Trust L.P., Sr. Unsec. Gtd. Notes, 4.50%, 07/15/15(c)		305,000		308,185
Oil & Gas Equipment & Services–0.15%
Helix Energy Solutions Group, Inc., Sr. Unsec. Conv. Putable Notes, 3.25%, 12/15/25		1,208,000		1,171,760
Oil & Gas Exploration & Production–0.04%
Petroleos Mexicanos (Mexico), Sr. Unsec. Gtd. Global Notes, 5.50%, 01/21/21		335,000		340,465
Oil & Gas Storage & Transportation–0.09%
Enterprise Products Operating LLC, Sr. Unsec. Gtd. Global Notes, 5.25%, 01/31/20		100,000		103,955
Series N, Sr. Unsec. Gtd. Notes, 6.50%, 01/31/19		220,000		250,034

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Equity and Income Fund

	Principal
	Amount		Value
Oil & Gas Storage & Transportation–(continued)
Spectra Energy Capital LLC, Sr. Unsec. Gtd. Notes, 7.50%, 09/15/38	$	120,000	$	140,514
Texas Eastern Transmission LP, Sr. Unsec. Notes, 7.00%, 07/15/32		165,000		193,746
				688,249
Other Diversified Financial Services–1.13%
Bank of America Corp., Sr. Unsec. Global Notes,
5.75%, 12/01/17		865,000		896,836
7.63%, 06/01/19		70,000		80,845
Series L, Sr. Unsec. Medium-Term Global Notes, 5.65%, 05/01/18		280,000		289,523
Citibank NA, Sr. Unsec. Gtd. Notes, 1.75%, 12/28/12		1,500,000		1,530,646
Citigroup Funding Inc., Unsec. Gtd. Unsub. Global Notes, 2.25%, 12/10/12		3,090,000		3,178,143
Citigroup Inc., Sr. Unsec. Global Notes,
6.13%, 11/21/17		460,000		507,430
6.13%, 05/15/18		355,000		389,183
8.50%, 05/22/19		415,000		517,064
ERAC USA Finance LLC, Sr. Unsec. Gtd. Notes, 2.75%, 07/01/13(c)		290,000		295,012
JPMorgan Chase & Co., Sr. Unsec. Global Notes, 4.40%, 07/22/20		360,000		355,637
Sr. Unsec. Notes, 6.00%, 01/15/18		590,000		659,428
Merrill Lynch & Co., Inc., Sr. Unsec. Medium-Term Notes, 6.88%, 04/25/18		285,000		311,734
				9,011,481
Packaged Foods & Meats–0.13%
Grupo Bimbo SAB de CV (Mexico), Sr. Unsec. Gtd. Notes, 4.88%, 06/30/20(c)		270,000		272,538
Kraft Foods Inc., Sr. Unsec. Global Notes,
5.38%, 02/10/20		200,000		215,898
7.00%, 08/11/37		275,000		324,024
Sr. Unsec. Notes, 6.88%, 01/26/39		180,000		210,238
				1,022,698
Pharmaceuticals–0.78%
Endo Pharma Holdings Inc., Sr. Unsec. Sub. Conv. Notes, 1.75%, 04/15/15		1,493,000		1,993,155
GlaxoSmithKline Capital Inc., Sr. Unsec. Gtd. Global Bonds,
5.65%, 05/15/18		75,000		85,688
6.38%, 05/15/38		70,000		82,815
Merck & Co. Inc., Sr. Unsec. Global Notes, 5.00%, 06/30/19		280,000		309,599
Mylan Labs Inc., Sr. Unsec. Gtd. Conv. Notes, 1.25%, 03/15/12		2,850,000		3,031,687
Pfizer Inc., Sr. Unsec. Global Notes, 6.20%, 03/15/19		650,000		765,385
				6,268,329
Property & Casualty Insurance–0.02%
Travelers Cos., Inc. (The), Sr. Unsec. Notes, 5.35%, 11/01/40		180,000		176,865
Railroads–0.06%
CSX Corp., Sr. Unsec. Global Notes, 6.15%, 05/01/37		75,000		79,905
Sr. Unsec. Notes, 5.50%, 04/15/41		325,000		319,416
Union Pacific Corp., Sr. Unsec. Notes, 6.13%, 02/15/20		105,000		120,500
				519,821
Real Estate Management & Development–0.00%
Brookfield Asset Management, Inc. (Canada), Sr. Unsec. Yankee Notes, 7.13%, 06/15/12		10,000		10,547
Regional Banks–0.20%
Key Bank NA, Sr. Unsec. Gtd. Global Notes, 3.20%, 06/15/12		500,000		518,680
Nationwide Building Society (United Kingdom), Sr. Unsec. Notes, 6.25%, 02/25/20(c)		485,000		509,194
PNC Funding Corp., Sr. Unsec. Gtd. Global Notes, 5.13%, 02/08/20		330,000		346,298
Sr. Unsec. Gtd. Notes, 6.70%, 06/10/19		165,000		190,655
				1,564,827
Reinsurance–0.02%
Reinsurance Group of America, Inc., Sr. Unsec. Notes, 6.45%, 11/15/19		150,000		159,191
Restaurants–0.03%
Yum! Brands, Inc., Sr. Unsec. Global Bonds, 6.25%, 03/15/18		100,000		113,475
Sr. Unsec. Notes, 5.30%, 09/15/19		155,000		165,958
				279,433
Retail REIT’s–0.03%
WEA Finance LLC/WT Finance Australia Pty Ltd., Sr. Unsec. Gtd. Notes, 6.75%, 09/02/19(c)		225,000		250,460
Semiconductors–0.94%
Linear Technologies Corp., Sr. Unsec. Conv. Putable Notes, 3.00%, 05/01/27(c)		1,193,000		1,270,545
Linear Technology Corp.–Class A, Sr. Unsec. Conv. Global Putable Notes, 3.00%, 05/01/27		819,000		872,235
Micron Technology, Inc., Sr. Unsec. Conv. Notes, 1.88%, 06/01/14		3,414,000		3,243,300

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Equity and Income Fund

	Principal
	Amount		Value
Semiconductors–(continued)
Xilinx Inc., Jr. Unsec. Conv. Sub. Notes,
3.13%, 03/15/37	$	763,000	$	797,335
3.13%, 03/15/37(c)		1,302,000		1,360,590
				7,544,005
Sovereign Debt–0.04%
Republic of Italy (Italy), Sr. Unsec. Global Notes, 6.88%, 09/27/23		290,000		320,777
Specialized Finance–0.23%
NASDAQ OMX Group Inc. (The), Sr. Unsec. Conv. Notes, 2.50%, 08/15/13		1,601,000		1,592,995
Sr. Unsec. Notes, 5.55%, 01/15/20		240,000		241,452
				1,834,447
Specialized REIT’s–0.05%
Health Care REIT Inc., Sr. Unsec. Notes, 4.95%, 01/15/21		415,000		401,004
Steel–0.56%
Allegheny Technologies Inc., Sr. Unsec. Conv. Notes, 4.25%, 06/01/14		2,058,000		3,115,297
ArcelorMittal (Luxembourg), Sr. Unsec. Global Bonds, 9.85%, 06/01/19		410,000		519,947
Sr. Unsec. Global Notes, 3.75%, 08/05/15		515,000		519,420
Vale Overseas Ltd. (Cayman Islands), Sr. Unsec. Gtd. Global Notes,
5.63%, 09/15/19		160,000		171,222
6.88%, 11/10/39		160,000		174,540
				4,500,426
Systems Software–0.49%
Symantec Corp.–Class B, Sr. Unsec. Conv. Global Notes, 1.00%, 06/15/13		3,445,000		3,931,606
Thrifts & Mortgage Finance–0.08%
MGIC Investment Corp., Sr. Unsec. Conv. Notes, 5.00%, 05/01/17		554,000		639,178
Wireless Telecommunication Services–0.38%
American Tower Corp., Sr. Unsec. Notes, 4.50%, 01/15/18		295,000		292,143
Clearwire Communications LLC/Clearwire Finance Inc., Sr. Unsec. Gtd. Conv. Putable Notes, 8.25%, 12/01/40(c)		700,000		714,000
SBA Communications Corp., Sr. Unsec. Conv. Notes, 1.88%, 05/01/13		1,821,000		2,050,901
				3,057,044
Total Bonds & Notes (Cost $145,894,909)				164,574,674
U.S. Treasury Securities–7.07%
U.S. Treasury Bills–0.04%
0.16%, 04/28/11(d)		320,000		319,875
U.S. Treasury Notes–3.88%
1.50%, 12/31/13		500,000		507,109
1.75%, 03/31/14		2,300,000		2,344,562
2.63%, 07/31/14		1,000,000		1,045,625
2.38%, 10/31/14		14,100,000		14,591,297
2.13%, 11/30/14		4,700,000		4,813,828
2.25%, 01/31/15		6,000,000		6,156,562
3.63%, 08/15/19		1,260,000		1,315,716
3.38%, 11/15/19		300,000		306,188
				31,080,887
U.S. Treasury Bonds–1.59%
5.38%, 02/15/31		8,800,000		10,267,125
4.25%, 05/15/39		250,000		246,172
4.63%, 02/15/40		200,000		209,438
4.25%, 11/15/40		2,000,000		1,967,187
				12,689,922
U.S. Government Securities–1.56%
2.63%, 04/30/16		2,000,000		2,046,875
6.63%, 02/15/27		2,500,000		3,286,328
8.13%, 08/15/21		2,700,000		3,844,547
4.00%, 08/15/18		3,055,000		3,308,947
				12,486,697
Total U.S. Treasury Securities (Cost $55,151,373)				56,577,381
	Shares
Preferred Stocks–1.97%
Agricultural Products–0.17%
Archer-Daniels-Midland Co., 6.25% Pfd.(b)		34,250		1,329,927
Health Care Facilities–0.22%
HealthSouth Corp.–Series A, 6.50% Pfd.		1,785		1,736,359
Health Care Services–0.13%
Omnicare Capital Trust II–Series B, 4.00% Pfd.		26,407		1,021,951
Household Appliances–0.16%
Stanley Black & Decker. 4.75% Pfd.		12,300		1,328,151
Multi-Utilities–0.25%
CenterPoint Energy, Inc., 3.07% Pfd.		62,215		1,977,193
Oil & Gas Storage & Transportation–0.46%
El Paso Energy Capital Trust I, 4.75% Pfd(b)		95,499		3,712,046
Regional Banks–0.40%
KeyCorp.–Series A, 7.75% Pfd.		30,290		3,244,059

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Equity and Income Fund

	Shares		Value
Trucking–0.18%
Swift Mandatory Common Exchange Security Trust, 6.00% Pfd.(b)(c)		114,220	$	1,438,943
Total Preferred Stocks (Cost $13,889,729)				15,788,629
	Principal
	Amount
U.S. Government Sponsored Agency Securities–0.78%
Federal Home Loan Mortgage Corp. (FHLMC)–0.36%
Federal Home Loan Mortgage Corp., Sr. Unsec. Global Bonds, 6.75%, 03/15/31	$	650,000		833,820
Sr. Unsec. Global Notes, 3.00%, 07/28/14		900,000		948,305
Unsec. Global Notes, 4.88%, 06/13/18		1,000,000		1,118,774
				2,900,899
Federal National Mortgage Association (FNMA)–0.21%
Federal National Mortgage Association, Sr. Unsec. Global Notes, 4.38%, 10/15/15		1,520,000		1,671,831
U.S. Agency Securities–0.21%
Federal Home Loan Mortgage Corp., Sr. Unsec. Global Notes, 5.00%, 04/18/17		1,500,000		1,693,037
Total U.S. Government Sponsored Agency Securities (Cost $6,068,216)				6,265,767
Municipal Obligation–0.03%
Texas (State of) Transportation Commission Series 2010B, Taxable First Tier Build America RB, 5.03%, 04/01/26 (Cost $205,000)		205,000		202,790
Asset-Backed Securities–0.00%
Federal Home Loan Mortgage Corp., 6.50%, 02/01/26 (Cost $8,605)		8,141		9,136
U.S. Government Sponsored Mortgage-Backed Securities–0.00%
U.S. Agency Securities–0.00%
9.50%, 04/01/30 (Cost $16,385)		14,490		17,329
	Shares
Money Market Funds–4.25%
Liquid Assets Portfolio–Institutional Class(e)		17,009,779		17,009,779
Premier Portfolio–Institutional Class(e)		17,009,779		17,009,779
Total Money Market Funds (Cost $34,019,558)				34,019,558
TOTAL INVESTMENTS–99.83% (Cost $708,453,523)				799,090,720
OTHER ASSETS LESS LIABILITIES–0.17%				1,368,896
NET ASSETS–100.00%			$	800,459,616

Investment Abbreviations:

ADR	– American Depositary Receipt
Conv.	– Convertible
Ctfs.	– Certificates
Deb.	– Debentures
FHLMC	– Federal Home Loan Mortgage Corp.
FNMA	– Federal National Mortgage Association
Gtd.	– Guaranteed
INS	– Insurer
Jr.	– Junior
Pfd.	– Preferred
RB	– Revenue Bonds
REIT	– Real Estate Investment Trust
Sec.	– Secured
Sr.	– Senior
Sub.	– Subordinated
Unsec.	– Unsecured
Unsub.	– Unsubordinated

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2010 was $33,577,854, which represented 4.19% of the Fund’s Net Assets.
(d)	Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund.
(e)	The money market fund and the Fund are affiliated by having the same investment advisor.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Equity and Income Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $674,433,965)	$	765,071,162
Investments in affiliated money market funds, at value and cost		34,019,558
Total investments, at value (Cost $708,453,523)		799,090,720
Receivables for:
Fund shares sold		563,278
Dividends and interest		2,503,142
Investment for trustee deferred compensation and retirement plans		1,955
Other assets		316
Total assets		802,159,411
Liabilities:
Payable for:
Investments purchased		101,715
Fund shares reacquired		227,352
Variation margin		96,266
Accrued fees to affiliates		1,223,468
Accrued other operating expenses		45,880
Trustee deferred compensation and retirement plans		5,114
Total liabilities		1,699,795
Net assets applicable to shares outstanding	$	800,459,616
Net assets consist of:
Shares of beneficial interest	$	749,744,038
Undistributed net investment income		12,043,490
Undistributed net realized gain (loss)		(52,559,140	)
Unrealized appreciation		91,231,228
	$	800,459,616
Net assets:
Series I	$	45,973
Series II	$	800,413,643
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		3,269
Series II		56,957,343
Series I:
Net asset value per share	$	14.06
Series II:
Net asset value per share	$	14.05

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $84,378)	$	10,499,128
Dividends from affiliated money market funds		29,916
Interest		6,809,391
Total investment income		17,338,435
Expenses:
Advisory fees		2,879,490
Administrative services fees		1,893,075
Custodian fees		37,285
Distribution fees — Series II		2,079,310
Transfer agent fees		13,531
Trustees’ and officers’ fees and benefits		24,886
Other		118,042
Total expenses		7,045,619
Less: Fees waived		(1,757,816	)
Net expenses		5,287,803
Net investment income		12,050,632
Realized and unrealized gain from:
Net realized gain from:
Investment securities		25,074,690
Futures contracts		(1,649,494	)
Swap agreements		5,123
		23,430,319
Change in net unrealized appreciation of:
Investment securities		48,572,792
Futures contracts		135,594
		48,708,386
Net realized and unrealized gain		72,138,705
Net increase in net assets resulting from operations	$	84,189,337

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Equity and Income Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	December 31,			December 31,
	2010			2009
Operations:
Net investment income	$	12,050,632		$	11,732,832
Net realized gain		23,430,319			(27,956,625	)
Change in net unrealized appreciation		48,708,386			134,974,013
Net increase in net assets resulting from operations		84,189,337			118,750,220
Distributions to shareholders from net investment income — Series II		(13,994,794	)		(15,771,072	)
Share transactions–net:
Series I		44,483			—
Series II		57,438,806			52,678,233
Net increase in net assets resulting from share transactions		57,483,289			—
Net increase in net assets		127,677,832			155,657,381
Net assets:
Beginning of year		672,781,784			517,124,403
End of year (includes undistributed net investment income of $12,043,490 and $11,479,842, respectively)	$	800,459,616		$	672,781,784

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen V.I. Equity and Income Fund (the “Fund”), is a series portfolio of Variable Insurance Funds (Invesco Variable Insurance Funds), formerly AIM Variable Insurance 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 consisting of forty-one separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as Universal Institutional Funds Equity and Income Portfolio (“the Acquired Fund”), an investment portfolio of The Universal Institutional Funds, Inc. The Acquired Fund was reorganized on June 1, 2010 (“the Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class II shares received Series II shares of the Fund.

  Information for the Acquired Fund’s — Class II shares prior to the Reorganization is included with Series II shares of the Fund throughout this report.

  The Fund’s investment objectives are both capital appreciation and current income.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean

Invesco Van Kampen V.I. Equity and Income Fund

	between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.

Invesco Van Kampen V.I. Equity and Income Fund

	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $150 million		0	.50%
Next $100 million		0	.45%
Next $100 million		0	.40%
Over $350 million		0	.35%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee to Morgan Stanley Investment Management Inc. (“MS Investment Management”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed 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 Series I shares to 0.70% and Series II shares to 0.75% of average daily net assets, through at least June 30, 2012. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Prior to the Reorganization, MS Investment Management had voluntarily agreed to waive fees and/or reimburse expenses of Class II shares to 1.00% of the Acquired Fund’s average daily net assets.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market

Invesco Van Kampen V.I. Equity and Income Fund

funds. Prior to the Reorganization, investment advisory fees paid by the Acquired Fund were reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class shares.

  For the year ended December 31, 2010, the MS Investment Management and the Advisor waived advisory fees of $10,775 and $25,597, respectively.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $103,659 for accounting and fund administrative services and reimbursed $1,063,122 for services provided by insurance companies. Prior to the Reorganization, the Acquired Fund paid an administration fee of $726,293 to MS Investment Management and JPMorgan Investor Services Co.

  Also, the Trust has entered into service agreements whereby State Street Bank & Trust Company (“SSB”) serves as custodian, fund accountant and provide certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. Prior to the Reorganization, the Acquired Fund paid $2,702 to Morgan Stanley Services Company Inc., which served as the Acquired Fund’s transfer agent. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. IDI has contractually agreed to waive 0.20% of Rule 12b-1 plan fees on Class II shares through at least June 30, 2012.

  Prior to the Reorganization, the Acquired Fund paid distribution fees to Morgan Stanley Distribution Inc. (“MSDI”) based on the annual rate of 0.35% of the Acquired Fund’s average daily net assets of Class II shares. MSDI had voluntarily agreed to waive 0.30% distribution fee that it received from the Acquired Fund. MSDI was paid distribution fees of $145,245, after fee waivers of $870,959.

  12b-1 fees before fee waivers under this agreement are shown as Distribution fees in the Statement of Operations. For the year ended December 31, 2010, fees incurred after fee waivers for Series II shares were $357,866.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. 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.

Invesco Van Kampen V.I. Equity and Income Fund

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	561,471,747	$	9,971,896	$	—	$	571,443,643
U.S. Treasury Securities		—		319,875		—		319,875
U.S. Government Sponsored Securities		—		62,861,379		—		62,861,379
Corporate Debt Securities		—		164,253,897		—		164,253,897
Asset Backed Securities		—		9,136		—		9,136
Municipal Obligations		—		202,790		—		202,790
	$	561,471,747	$	237,618,973	$	—	$	799,090,720
Futures*		594,031		—		—		594,031
Total Investments	$	562,065,778	$	237,618,973	$	—	$	799,684,751

*  Unrealized appreciation.

NOTE 4—Derivative Investments

The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Value of Derivative Instruments at Period-End

The Table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2010:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Futures contracts(a)
Interest rate risk	$	619,558	$	(25,527	)

^(a) Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets & Liabilities.

Effect of Derivative Instruments for the year ended December 31, 2010

The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on
	Statement of Operations
				Swap
	Futures*			Agreements
Realized Gain (Loss)
Credit risk		—		$	5,123
Interest rate risk	$	(1,649,494	)		—
Change in Unrealized Appreciation (Depreciation)
Interest rate risk		135,594			—
Total	$	(1,513,900	)	$	5,123

*  The average value of futures during the period was $38,416,813.

Open Futures Contracts
								Unrealized
	Number of		Month/					Appreciation
Contract	Contracts		Commitment		Value			(Depreciation)
U.S. Treasury 2 Year Notes		65		March-2011/Long	$	14,228,906		$	(25,527	)
Subtotal					$	14,228,906		$	(25,527	)
U.S. Treasury 5 Year Notes		100		March-2011/Short		(11,771,875	)		195,884
U.S. Treasury 10 Year Notes		50		March-2011/Short		(6,021,875	)		160,442
U.S. Long Bonds		53		March-2011/Short		(6,472,625	)		263,232
Subtotal					$	(24,266,375	)	$	619,558
Total					$	(10,037,469	)	$	594,031

Invesco Van Kampen V.I. Equity and Income Fund

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	13,994,794	$	15,771,072

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	12,048,991
Net unrealized appreciation — investments		87,004,975
Temporary book/tax differences		(5,501	)
Capital loss carryforward		(48,332,887	)
Shares of beneficial interest		749,744,038
Total net assets	$	800,459,616

  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 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 utilized $23,205,519 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2017	$	48,332,887

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

Invesco Van Kampen V.I. Equity and Income Fund

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $284,003,091 and $234,896,276, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	94,898,272
Aggregate unrealized (depreciation) of investment securities		(7,893,297	)
Net unrealized appreciation of investment securities	$	87,004,975
Cost of investments for tax purposes is $712,085,745.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions and net operating losses, on December 31, 2010, undistributed net investment income (loss) was increased by $2,507,810, undistributed net realized gain (loss) was decreased by $2,506,812 and shares of beneficial interest decreased by $998. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Years ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I(b)		3,269		$	44,487			—		$	—
Series II		9,140,570			119,604,678			10,389,966			116,829,247
Issued as reinvestment of dividends:
Series II		1,110,698			13,994,794			1,504,873			15,771,072
Reacquired:
Series I		—			(4	)		—			—
Series II		(5,846,609	)		(76,160,666	)		(7,373,030	)		(79,922,086	)
Net increase in share activity		4,407,928		$	57,483,289			4,521,809		$	52,678,233

(a)

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 83% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

(b)

Commencement date of June 1, 2010.

Invesco Van Kampen V.I. Equity and Income Fund

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																											Ratio of			Ratio of
																											expenses			expenses						Ratio of
					Net gains																						to average			to average net			Ratio of net			rebate from
	Net asset		Net		on securities						Dividends			Distributions													net assets			assets without			investment			Morgan Stanley
	value,		investment		(both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income (loss)			Affiliates
	beginning		income		realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			to average			Portfolio
	of period		(loss)(a)		unrealized)			operations			income			gains			Distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			net assets			turnover(c)
Series I
Year ended 12/31/10(d)	$	12.27	$	0.13	$	1.66		$	1.79		$	—		$	—		$	—		$	14.06		14.59	%	$	46		0.69	%(e)		0.70	%(e)		1.73	%(e)		—			34	%
Series II
Year ended 12/31/10		12.80		0.22		1.29			1.51			(0.26	)		—			(0.26	)		14.05		12.03			800,414		0.74	(e)		0.98	(e)		1.68	(e)		—			34
Year ended 12/31/09		10.77		0.24		2.11			2.35			(0.32	)		—			(0.32	)		12.80		22.49			672,782		0.74	(f)		1.04	(f)		2.09	(f)(g)		0.01			81
Year ended 12/31/08		14.74		0.32		(3.56	)		(3.24	)		(0.31	)		(0.42	)		(0.73	)		10.77		(22.68	)(h)		517,124		0.75	(f)		1.05	(f)		2.50	(f)(g)		0.01			95
Year ended 12/31/07		14.89		0.35		0.17			0.52			(0.28	)		(0.39	)		(0.67	)		14.74		3.36			711,897		0.74	(f)		1.04	(f)		2.31	(f)(g)		0.00	(i)		70
Year ended 12/31/06		13.69		0.32		1.35			1.67			(0.16	)		(0.31	)		(0.47	)		14.89		12.58			570,626		0.78			1.08			2.25			—			56

(a)	Calculate using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Commencement date of June 1, 2010.
(e)	Ratios are based on average daily net assets (000’s omitted) of $11 and $715,562 for Series I and Series II shares, respectively.
(f)	The ratios reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate is disclosed in the above table as “Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets”.
(g)	Ratio of net investment income to average net assets without fee waivers and/or expenses absorbed was 1.79%, 2.20%, 2.01%, 1.95% and 1.49% for the years ended December 31, 2009 through December 31, 2005, respectively.
(h)	The Adviser reimbursed the Portfolio for losses incurred on derivative transactions which breached an investment guideline of the Portfolio during the period. The impact of this reimbursement is reflected in the total return shown above. Without this reimbursement, the total return for Series II would have been (22.68)%.
(i)	Amount is less than 0.005%.

NOTE 12—Change in Independent Registered Public Accounting Firm (unaudited)

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Invesco Van Kampen V.I. Equity and Income Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco Van Kampen V.I. Equity and Income Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen V.I. Equity and Income Fund, (formerly known as Universal Institutional Funds Equity and Income Portfolio; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 19, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco Van Kampen V.I. Equity and Income Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,174.60	$	3.79	$	1,021.72	$	3.53		0.69	%
Series II		1,000.00		1,173.80		4.07		1,021.46		3.78		0.74

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco Van Kampen V.I. Equity and Income 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	64.49%
U.S. Treasury Obligations*	10.65%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco Van Kampen V.I. Equity and Income Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VK-VIGTAA-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

As part of Invesco’s June 1, 2010, acquisition of Morgan Stanley’s retail asset management business, Van Kampen Life Investment Trust Global Tactical Asset Allocation Portfolio was reorganized as Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund. Effective June 1, 2010, Mark Ahnrud, Chris Devine, Scott Hixon, Bernhard Langer, Christian Ulrich and Scott Wolle managed the Fund. A detailed listing of your Fund’s managers appears later in this report.

     For the 12 months ended December 31, 2010, Series I shares of Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund returned 9.56% and outperformed the Fund’s custom style-specific benchmark, the VK GTAA Blended Benchmark, which returned 8.32% over the same period. Despite weaknesses in fixed income and equity markets during the first and second quarters, respectively, recoveries in the second half of the reporting period helped drive outperformance.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	9.56	%
Series II Shares	9.32
MSCI World Index▼ (Broad Market Index)	11.76
VK GTAA Blended Benchmark■ (Style-Specific Index)	8.32

^▼Lipper Inc.; ^■Invesco, Bloomberg L.P.

How we invest

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund relies on an actively managed quantitative strategy designed to generate absolute returns from a macroeconomic, multi-asset overlay investment discipline.

The research and investment process is focused on understanding the differentiating factors of each market. Accordingly, each decision is represented by an individual model. These models determine the buy/sell decisions across the asset classes. We believe this strategy has the potential to improve diversification and improve the team’s ability to realize excess returns from each market over a full cycle.

     The Invesco Van Kampen V.I. Global Tactical Asset Allocation overlay strategy is reset on a monthly basis and implemented with derivatives, mainly futures. It is designed to align the portfolio with the prevailing economic environment and to take advantage of relative price trends without disrupting the underlying bottom-up security selection process.

     From an equity standpoint, our philosophy is based on certain assumptions: We believe that markets are inefficient and offer exploitable opportunities. Thus, we strive to achieve outperformance. Risk and return are the focus of our efforts.

     We work on a stock-picking level and calculate an estimated attractiveness for each security in the universe. We purely focus on stock selection and keep country/currency, industry and style exposures very close to the benchmark. When considering risk, we take into account the active risk versus our benchmark, which we manage through the use of an optimizer, as well as limiting active factor exposures.

     Our stock picking is based on fundamental or behavioral finance concepts. We believe we employ a highly efficient and systematic process in an effort to capture the insight contained in these concepts in our portfolios. We endeavor to minimize transaction costs through state of the art trading techniques. Our research effort is directed to continually enhance and update the investment process to stay ahead of the competition.

     The global fixed-income exposure, gained through the use of sovereign debt instruments, is implemented through swaps and exchange-traded funds (ETFs).

Market conditions and your Fund

The first quarter of 2010 was characterized by a healthy recovery in global equities from the 2008-2009 financial crisis. Hopes for a relatively rapid, sustained recovery were fueled by record amounts of monetary and fiscal stimulus and an exceptionally low interest rate policy. Not surprising, cyclical assets, such as equities, enjoyed significant price advances during that period driven by anticipation that improving economic conditions would boost earnings growth.

     The Fund’s exposure to equity, specifically emerging markets, and U.S. high yield fixed-income securities, enhanced performance during this time. Conversely, an underweight position in U.S. equities detracted from returns,

Portfolio Composition

By sector

Financials	19.7	%
Health Care	8.3
Information Technology	8.1
Energy	7.5
Consumer Discretionary	7.4
Materials	5.5
Industrials	3.8
Telecommunication Services	3.3
Consumer Staples	2.7
Utilities	2.1
Money Market Funds Plus
Other Assets in Excess of Liabilities	31.6

Top 10 Equity Holdings*

1.	Chevron Corp.	2.2	%
2.	Canon, Inc.	2.0
3.	Exxon Mobil Corp.	1.7
4.	Microsoft Corp.	1.6
5.	BCE, Inc.	1.6
6.	International Business Machines Corp.	1.6
7.	Novo Nordisk A/S	1.5
8.	BHP Billiton PLC	1.5
9.	BHP Billiton Ltd.	1.3
10.	ConocoPhillips	1.3

Top Five Countries*

1.	United States	34.8	%
2.	Japan	7.4
3.	United Kingdom	5.8
4.	Canada	3.5
5.	Sweden	2.0

Total Net Assets	$74.7 million
Total Number of Holdings*		120

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.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

as the U.S. equity market advanced on better-than-expected economic data and resilient corporate profits.

     Active currency decisions, implemented through forward contracts, also hampered results. Losses from underweight positions in the Japanese yen, U.S. dollar and Australian dollar, and overweight positions in the Canadian dollar and the Brazilian real, overwhelmed gains from an overweight position in the Korean won and the underweight position in the euro.

     At the onset of the second quarter of 2010, Chinese officials began to tighten monetary policy in response to fears about inflation, creating concerns about the pace of growth for the Chinese economy and its impact on demand for commodities. Furthermore, concerns about a double-dip recession in the U.S. and fiscal concerns in the peripheral European economies, such as Greece, Ireland, Portugal and Spain, ignited fears of a renewed global economic slowdown. These developments led to a flight to safety approach among global investors driving government bond yields of the world’s largest industrial countries to multidecade lows.

     In the final months of the reporting period, equities began to rebound helped by two rather unusual events. In the case of Europe, the creation of a facility to support weaker economies removed the worst of the uncertainty. Domestically, the U.S. Federal Reserve (the Fed) unveiled a second round of quantitative easing (QE2). Government bonds benefited from both the economic events and the U.S. policy response, resulting in yields across the yield curve dropping at or near multidecade lows. By year’s end, however, bond yields began to rise. Riskier assets, such as equities, rebounded substantially, posting significant gains in the fourth quarter. Commodities had a very eventful quarter as well with all the major segments rising.

     Within the Fund, emerging markets equity exposure continued to contribute positively to performance. With the exception of Australia, where yields declined only modestly, all government fixed income markets benefited from substantial price advances during the period. As a result, the developed market fixed-income strategy had a positive effect on the Fund’s results. Strong performance from both the equity and fixed-income components of the Fund in the fourth quarter contributed to the outperformance for the reporting period.

     We thank you for your continued commitment to Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Mark Ahnrud

Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund. Mr. Ahnrud joined Invesco in 2000. He began his investment career in 1985. Mr. Ahnrud earned a B.S. in finance and investments from Babson College and an M.B.A. from the Fuqua School of Business at Duke University.

Chris Devine

Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund. Mr. Devine joined Invesco in 2003. He began his investment career in 1996. Mr. Devine earned a B.A. in economics from Wake Forest University and an M.B.A. from the University of Georgia.

Scott Hixon

Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund. Mr. Hixon joined Invesco in 1997. He began his investment career in 1992. Mr. Hixon earned a B.B.A. in finance from Georgia Southern University and an M.B.A. in finance from Georgia State University.

Bernhard Langer

Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund. Mr. Langer joined Invesco in 1994. He began his investment career in 1989. Mr. Langer earned an M.B.A. with a focus in economics and banking from the University of Munich.

Christian Ulrich

Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund. Mr. Ulrich joined Invesco in 2000. He began his investment career in 1987. Mr. Ulrich graduated from the KV Zurich Business School in Zurich, Switzerland.

Scott Wolle

Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund. Mr. Wolle joined Invesco in 1999. He began his investment career in 1991. Mr. Wolle earned a B.S. in finance from Virginia Polytechnic Institute and State University and an M.B.A. from the Fuqua School of Business at Duke University.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Classes since Inception

Fund data from 1/23/09, index data from 1/31/09

Past performance cannot guarantee comparable future results.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (1/23/09)			19.18	%
	1	Year	9.56
Series II Shares
Inception (1/23/09)			18.87	%
	1	Year	9.32

Effective June 1, 2010, Class I and Class II shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Series I and Series II shares, respectively, of Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund. Returns shown above for Series I and Series II shares are blended returns of the predecessor fund and Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial

adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.98% and 1.23%, respectively.^1,2 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.58% and 1.83%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing

variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower.

1	Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.
2	The expense ratio includes estimated acquired fund fees and expenses of the underlying funds in which the Fund invests of 0.08% for Invesco Van Kampen V.I. Global Asset Allocation Fund.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund’s investment objective is to seek capital appreciation over time.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

Market risk is the possibility that the market values of securities owned by the Fund will decline. Foreign markets may, but often do not, move in tandem with U.S. markets, and foreign markets, especially developing or emerging market countries, may be more volatile than U.S. markets. Investments in common stocks and other equity securities generally are affected by changes in the stock markets which fluctuate substantially over time, sometimes suddenly and sharply. The prices of fixed income securities tend to fall as interest rates rise, and such declines tend to be greater among fixed income securities with longer maturities. The yields and market prices of U.S. government securities may move differently and adversely compared to the yields and market prices of the overall securities market, and while backed by the U.S. government, are not guaranteed against declines in their market prices. As interest rates change, zero coupon bonds often fluctuate more in price than securities that make regular interest payments and therefore subject the Fund to greater market risk than a fund that does not own these types of securities. When-issued and delayed delivery transactions are subject to changes in market conditions from the time of the commitment until settlement.

     Credit risk refers to an issuer’s ability to make timely payments of interest and principal. The credit quality of noninvestment grade securities is considered speculative by recognized rating agencies with respect to the issuer’s continuing ability to pay interest and principal. Lower-grade securities (also sometimes known as junk bonds) may have less liquidity and a higher incidence of default than higher-grade securities. The Fund may incur higher expenses to protect the Fund’s interest in such securities. The credit risks and market prices of lower-grade securities generally are more sensitive to negative issuer developments or adverse economic conditions than are higher-grade securities.

     The income you receive from the Fund is based primarily on interest rates, which can very widely over the short- and

long-term. If interest rates drop, your income from the Fund may drop as well. The more the Fund invests in adjustable, variable or floating rate securities or in securities susceptible to prepayment risk, the greater the Fund’s income risk.

     If interest rates fall, it is possible that issuers of fixed income securities with high interest rates will prepay or call their securities before their maturity dates. In this event, the proceeds from the prepaid or called securities would likely be reinvested by the Fund in securities bearing the new, lower interest rates, resulting in a possible decline in the Fund’s income and distributions to shareholders. Mortgage-related securities are especially sensitive to prepayment risk because borrowers often refinance their mortgages when interest rates drop.

     The prices of fixed income securities tend to fall as interest rates rise. For mortgage-related securities, if interest rates rise, borrowers may prepay mortgages more slowly than originally expected. This may further reduce the market value of the securities and lengthen their durations.

     Unlike a conventional bond, whose issuer makes regular fixed interest payments and repays the face value of the bond at maturity, an inflation-indexed security provides principal payments and interest payments, both of which are adjusted over time to reflect a direct correlation to either a rise (inflation) or a drop (deflation) in the general price level. There is generally some lag between the time that inflation occurs in the economy and when it is factored into inflation-indexed security valuations. In addition, the inflation index generally used is the non-seasonally adjusted index, which is not statistically smoothed to overcome highs and lows observed at different points each year. The use of the non-seasonally adjusted index can cause the Portfolio’s income level to fluctuate.

     Risks of investing in securities of foreign issuers, including emerging market issuers, can include fluctuations in foreign currencies, foreign currency exchange controls, political and economic instability, differences in financial reporting, differences in securities regulation and trading, and foreign taxation issues. To the extent the Fund

focuses its assets in a single country or region, its portfolio would be more susceptible to factors adversely affecting issuers in that country or region.

     Investing in REITs and foreign real estate companies makes the Fund susceptible to the risks associated with the ownership of real estate and with the real estate industry in general, and may involve duplication of management fees and certain other expenses. In addition, REITs and foreign real estate companies may be less diversified than other pools of securities, may have lower trading volume, and may be subject to more abrupt or erratic price movements than the overall securities markets.

     Risks of derivatives include possible imperfect correlation between the value of the instruments and the underlying assets; risks of default by the other party to certain transactions; risks that the transactions may result in losses that partially or completely offset gains in portfolio positions; and risks that the transactions may not be liquid. The Fund’s investments in commodity linked derivatives to gain exposure to investment returns of assets that trade in the commodity market may subject the Fund to greater volatility than investment in traditional securities. The value of commodity linked derivative investments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or sectors affecting a particular industry or commodity, such as drought, floods, weather, embargoes, tariffs and international economic, political and regulatory developments. The prices of precious metals and precious metal related securities have historically been very volatile.

About indexes used in this report

The MSCI World Index^SM is an unmanaged index considered representative of stocks of developed countries.

     The VK GTAA Blended Benchmark, created by Invesco to serve as a benchmark for Invesco Van Kampen Global Tactical Asset Allocation Fund, is composed of the following indexes: (65%) MSCI World Index, (30%) J.P. Morgan Government Bond Index-Global Unhedged USD, and (5%) Citigroup 3-Month Treasury Bill Index.

continued on following page

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

     The J.P. Morgan Government Bond Index- Global Unhedged USD is an unmanaged index widely used for measuring performance and quantifying risk across international fixed-income bond markets.

     The Citigroup 3-Month Treasury Bill Index is an unmanaged index representing monthly return equivalents of yield averages of the last three month Treasury bill issues.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated,

index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry classifications used in this report are generally classified 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

Schedule of Investments

December 31, 2010

	Shares		Value
Common Stocks–60.4%
Australia–2.0%
Australia and New Zealand Banking Group Ltd.		8,867	$	211,765
BHP Billiton Ltd.		21,709		1,009,141
Rio Tinto Ltd.		2,622		229,212
				1,450,118
Bermuda–0.6%
Arch Capital Group Ltd.(a)		4,600		405,030
Canada–3.5%
Atco, Ltd., Class 1		3,200		190,365
BCE, Inc.		33,800		1,201,340
Canadian Imperial Bank of Commerce		1,900		149,680
George Weston Ltd.		5,300		448,818
Penn West Energy Trust		3,600		86,316
Rogers Communication, Inc., Class B		14,300		497,617
				2,574,136
Denmark–1.8%
Carlsberg A/S		656		65,682
Coloplast A/S, Class B		1,184		160,893
Novo Nordisk A/S, Class B		10,190		1,146,935
				1,373,510
Finland–1.2%
Fortum Oyj		15,538		471,387
Stora Enso Oyj, Class R		37,551		385,629
UPM-Kymmene Oyj		2,383		42,098
				899,114
France–1.0%
Sanofi-Aventis SA		9,990		641,501
Total SA		1,392		73,919
				715,420
Germany–1.2%
Deutsche Lufthansa AG(a)		22,903		500,549
Hannover Rueckversicherung AG		6,708		359,766
				860,315
Hong Kong–1.6%
Cheung Kong Holdings Ltd.		26,000		400,179
CLP Holdings Ltd.		37,500		304,427
SJM Holdings, Ltd.		64,000		101,606
Swire Pacific Ltd., Class A		25,500		418,492
				1,224,704
Italy–1.2%
Enel SpA		10,330		51,627
ENI SpA		6,225		135,924
Mediaset SpA		25,457		154,017
Mediobanca SpA (warrants, expiring 03/18/11)(a)		429		3
Terna Rete Elettrica Nationale SpA		137,534		580,766
				922,337
Japan–7.4%
Brother Industries Ltd.		22,300		330,696
Canon, Inc.		28,700		1,471,296
DAITO Trust Construction Co., Ltd.		5,200		356,103
Honda Motor Co., Ltd.		10,300		407,093
Hoya Corp.		5,600		136,017
Mitsubishi UFJ Financial Group, Inc.		95,900		518,538
Mizuho Financial Group, Inc.		231,200		435,689
Resona Holdings, Inc.		6,500		38,989
Sekisui Chemical Co., Ltd.		19,000		136,433
Seven & I Holdings Co., Ltd.		3,000		80,182
Sumitomo Mitsui Financial Group, Inc.		7,900		281,399
Takeda Pharmaceutical Co., Ltd.		9,400		462,532
Tokio Marine Holdings, Inc.		22,400		669,600
Yamada Denki Co., Ltd.		2,680		182,870
				5,507,437
Jersey Channel Islands–1.3%
Petrofac Ltd.		38,358		950,305
Netherlands–0.1%
STMicroelectronics NV		9,454		97,989
New Zealand–0.1%
Telecom Corp. of New Zealand Ltd.		52,845		89,354
Norway–0.2%
StatoilHydro ASA		6,233		148,052
Singapore–0.3%
United Overseas Bank Ltd.		16,000		226,906
Spain–1.0%
Banco Bilbao Vizcaya Argentaria SA		29,182		294,809
Banco Santander SA		44,464		472,444
				767,253
Sweden–2.0%
Alfa Laval AB		14,716		310,045
Nordea Bank AB		31,998		348,019
SKF AB, Class B		17,100		492,574
Svenska Handelsbanken AB, Class A		10,803		345,181
				1,495,819

See Accompanying Notes to the Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

	Shares		Value
Switzerland–1.4%
Allied World Assurance Co. Holdings Ltd.		2,000	$	118,880
Banque Cantonale Vaudois		119		62,491
Novartis AG		11,005		647,584
Roche Holding AG		1,690		247,626
				1,076,581
United Kingdom–5.8%
AstraZeneca PLC		14,544		665,734
BHP Billiton PLC		27,555		1,098,580
British American Tobacco PLC		24,493		942,949
BT Group PLC		225,423		636,290
HSBC Holdings PLC		4,067		41,443
Mondi PLC		54,031		433,158
Next PLC		15,670		482,514
				4,300,668
United States–26.8%
American Express Co.		10,700		459,244
Amgen, Inc.(a)		8,600		472,140
Apple, Inc.(a)		500		161,280
Capital One Financial Corp.		9,200		391,552
Cardinal Health, Inc.		10,200		390,762
Chevron Corp.		18,000		1,642,500
Cisco Systems, Inc.(a)		2,700		54,621
Citigroup, Inc.(a)		40,400		191,092
Coca-Cola Enterprises, Inc.		5,200		130,156
ConocoPhillips		14,600		994,260
Domtar Corp.		4,800		364,416
D.R. Horton, Inc.		25,200		300,636
Exxon Mobil Corp.		17,200		1,257,664
Ford Motor Co.(a)		17,200		288,788
Forest Laboratories, Inc.(a)		3,600		115,128
Franklin Resources, Inc.		3,300		366,993
Gannett Co., Inc.		23,200		350,088
Gap, Inc.		22,700		502,578
Goldman Sachs Group, Inc.		2,100		353,136
Humana, Inc.(a)		3,600		197,064
IAC/InteractiveCorp(a)		33,800		970,060
InterDigital, Inc.		3,500		145,740
International Business Machines Corp.		8,000		1,174,080
Johnson & Johnson		7,400		457,690
JPMorgan Chase & Co.		17,300		733,866
KBR, Inc.		5,600		170,632
Lexmark International, Inc., Class A(a)		2,100		73,122
Limited Brands, Inc.		31,900		980,287
M & T Bank Corp.		3,200		278,560
Macy’s, Inc.		4,200		106,260
McDonald’s Corp.		7,100		544,996
Microsoft Corp.		43,800		1,222,896
Northrop Grumman Corp.		6,700		434,026
Oil States International, Inc.(a)		2,400		153,816
Oshkosh Corp.(a)		15,000		528,600
Peabody Energy Corp.		6,500		415,870
PPG Industries, Inc.		1,500		126,105
Procter & Gamble Co.		4,600		295,918
Prudential Financial, Inc.		1,200		70,452
R.R. Donnelley & Sons Co.		17,300		302,231
Sprint Nextel Corp.(a)		14,900		63,027
Sunoco, Inc.		1,100		44,341
Time Warner, Inc.		3,533		113,657
Travelers Cos., Inc.		900		50,139
TRW Automotive Holdings Corp.(a)		9,600		505,920
Tyson Foods, Inc., Class A		3,900		67,158
UnitedHealth Group, Inc.		15,800		570,538
Valero Energy Corp.		2,700		62,424
Vishay Intertechnology, Inc.(a)		14,600		214,328
Walter Energy, Inc.		900		115,056
Wells Fargo & Co.		2,200		68,178
				20,044,071
Total Common Stocks				45,129,119
Investment Companies–8.0%
United States–8.0%
iShares Barclays 3-7 Year Treasury Bond Fund		6,900		791,085
iShares MSCI EAFE Index Fund		28,500		1,659,555
SPDR Barclays Capital International Treasury Bond ETF		30,800		1,800,568
SPDR S&P 500 ETF Trust		13,600		1,710,608
Total Investment Companies				5,961,816
Total Long-Term Investments (Cost $44,252,495)				51,090,935
Money Market Funds–22.2%
Liquid Assets Portfolio–Institutional Class(b)		8,295,741		8,295,741
Premier Portfolio–Institutional Class(b)		8,295,741		8,295,741
Total Money Market Funds (Cost $16,591,482)				16,591,482
United States Government Agency Obligation–8.0%
United States Treasury Bill ($6,000,000 par, yielding 0.226%, 02/24/11 maturity) (Cost $5,998,475)				5,998,475
TOTAL INVESTMENTS–98.6% (Cost $66,842,452)				73,680,892
OTHER ASSETS IN EXCESS OF LIABILITIES–1.4%				1,011,771
NET ASSETS–100.0%			$	74,692,663

See Accompanying Notes to the Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

Notes to Schedule of Investments:

Percentages are calculated as a percentage of net assets.

(a)	Non-income producing security.
(b)	The money market and the Fund are affiliated by having the same investment adviser.

Forward Foreign Currency Contracts Outstanding as of December 31, 2010:
					Unrealized
					Appreciation/
	Counterparty	In Exchange for	Current Value		Depreciation
Long Contracts:
Indian Rupee
29,000,000 expiring 03/09/11	Goldman Sachs	US$	$	640,911	$	2,567
Short Contracts:
Indian Rupee
29,000,000 expiring 03/09/11	Goldman Sachs	US$		640,911		(2,848	)
Taiwan Dollar
16,800,000 expiring 03/09/11	Goldman Sachs	US$		577,091		(17,091	)
14,700,000 expiring 03/09/11	Goldman Sachs	US$		504,955		(14,055	)
					$	(33,994	)
					$	(31,427	)
Futures Contracts Outstanding as of December 31, 2010:
					Unrealized
			Number of		Appreciation/
			Contracts		Depreciation
Long Contracts:
DAX Index Futures, March 2011 (Current Notional Value of $232,323 per contract)				4	$	(15,227	)
FTSE Top 40 Index Futures, March 2011 (Current Notional Value of $43,544 per contract)				23		12,794
Hang Seng Index Futures, January 2011 (Current Notional Value of $148,064 per contract)				7		(1,259	)
MSCI Taiwan Index Futures, January 2011 (Current Notional Value of $31,930 per contract)				38		17,605
OMEX 30 Index Futures, January 2011 (Current Notional Value of $17,210 per contract)				69		2,847
Russell 2000 Mini Index Futures, March 2011 (Current Notional Value of $78,230 per contract)				31		56,600
S&P 60 Index Futures, March 2011 (Current Notional Value of $154,401 per contract)				9		23,264
SGX CNX Nifty Index Futures, January 2011 (Current Notional Value of $59,077 per contract)				22		21,142
Total Long Contracts				203		117,766
Short Contracts:
10 Year U.S. Treasury Note, March 2011 (Current Notional Value of $120,438 per contract)				5		10,173
CAC 40 Index Futures, January 2011 (Current Notional Value of $51,106 per contract)				16		18,782
FTSE MIB Index Futures, March 2011 (Current Notional Value of $135,530 per contract)				5		15,864
German Euro Bond Futures, March 2011 (Current Notional Value of $168,110 per contract)				3		3,099
IBEX 35 Index Futures, January 2011 (Current Notional Value of $131,351 per contract)				5		15,683
Japan Government Bond Futures, March 2011 (Current Notional Value of $1,733,721 per contract)				4		(25,400	)
S&P 500 E-Mini Index Futures, March 2011 (Current Notional Value Of $62,650 per contract)				13		(18,548	)
UK Long Gilt Bond Futures, March 2011 (Current Notional Value of $187,080 per contract)				7		(3,178	)
Total Short Contracts				58		16,475
Total Futures Contracts				261	$	134,241

Swap Agreements Outstanding as of December 31, 2010:
						Notional		Unrealized
		Number of		Month/		Amount		Appreciation
Swap Agreements	Counterparty	Contracts		Comittment		(000)		(Depreciation)
J.P. Morgan Global Government Bond Index	J.P. Morgan Chase Bank		42,046		June 2011/Long	$	20,203	$	146,562

See Accompanying Notes to the Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $50,250,970)	$	57,089,410
Investments in affiliated money market funds, at value and cost		16,591,482
Restricted Cash		1,046,255
Cash		71,066
Receivables:
Variation margin on futures		197,853
Dividends		100,202
Fund shares sold		29,397
Swap agreements		146,562
Forward foreign currency contracts		2,567
Other		533
Total assets		75,275,327
Liabilities:
Foreign currency overdraft (Cost $34,864)		35,956
Payables:
Distributor and affiliates		169,549
Fund shares repurchased		102,816
Offering costs		53,026
Variation margin on futures		63,612
Investment advisory fee		22,902
Forward foreign currency contracts		33,994
Trustees’ deferred compensation and retirement plans		1,328
Accrued expenses		99,481
Total liabilities		582,664
Net assets	$	74,692,663
Net assets consist of:
Capital (par value of $0.001 per share with an unlimited number of shares authorized)	$	62,312,858
Net unrealized appreciation		7,089,182
Accumulated net realized gain		5,357,424
Accumulated undistributed net investment income (loss)		(66,801	)
Net assets	$	74,692,663
Net assets value, offering price and redemption price per share:
Series I shares (based on net assets of $17,348 and 1,325 shares of beneficial interest issued and outstanding)	$	13.09
Series II shares (based on net assets of $74,675,315 and 5,723,742 shares of beneficial interest issued and outstanding)	$	13.05

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $60,956)	$	1,202,667
Dividends from affiliated funds		112,123
Interest		50,319
Total income		1,365,109
Expenses:
Investment advisory fee		590,302
Distribution fees:
Series II		197,168
Administrative services fees		180,318
Custody		141,720
Professional fees		53,960
Transfer agent fees		15,439
Trustees’ and officers’ fees and benefits		15,035
Offering costs		8,560
Other		14,082
Total expenses		1,216,584
Expense reduction		320,053
Net expenses		896,531
Net investment income		468,578
Realized and unrealized gain (loss):
Realized gain (loss):
Realized gain on sale of unaffiliated investments		4,071,729
Realized gain on sales of underlying affiliated funds		819,032
Futures contracts		1,001,446
Swap agreements		1,155,719
Foreign currency transactions		991,426
Forward foreign currency contracts		(2,840,926	)
Net realized gain		5,198,426
Unrealized appreciation (depreciation):
Beginning of the period		6,962,088
End of the period:
Investments		6,838,440
Swap agreements		146,562
Futures contracts		134,241
Foreign currency translation		1,366
Forward foreign currency contracts		(31,427	)
		7,089,182
Net unrealized appreciation during the period		127,094
Net realized and unrealized gain		5,325,520
Net increase in net assets from operations	$	5,794,098

See Accompanying Notes to the Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

Statement of Changes in Net Assets

				For the period
				January 23, 2009
				(Commencement of
	For the year ended			operations) to
	December 31, 2010			December 31, 2009
From investment activities:
Operations:
Net investment income	$	468,578		$	241,262
Net realized gain		5,198,426			6,738,510
Net unrealized appreciation during the period		127,094			6,962,088
Change in net assets from operations		5,794,098			13,941,860
Distributions from net investment income:
Series I shares		(196	)		(2,462	)
Series II shares		(185,515	)		(1,961,058	)
		(185,711	)		(1,963,520	)
Distributions from net realized gain:
Series I shares		(1,436	)		(4,587	)
Series II shares		(1,359,183	)		(3,885,689	)
		(1,360,619	)		(3,890,276	)
Total distributions		(1,546,330	)		(5,853,796	)
Net change in net assets from investment activities		4,247,768			8,088,064
From capital transactions:
Proceeds from shares sold		33,427,508			105,224,572
Net asset value of shares issued through dividend reinvestment		1,546,330			5,853,796
Cost of shares repurchased		(74,223,403	)		(9,471,972	)
Net change in net assets from capital transactions		(39,249,565	)		101,606,396
Total increase (decrease) in net assets		(35,001,797	)		109,694,460
Net assets:
Beginning of the period		109,694,460			-0-
End of the period (including accumulated undistributed net investment income (loss) of $(66,801) and $100,839, respectively)	$	74,692,663		$	109,694,460

See Accompanying Notes to the Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

Financial Highlights

The following schedules present financial highlights for one share of the Fund outstanding throughout the periods indicated.

	Series I sharesˆ
				January 23, 2009
				(Commencement of
	Year ended			operations) to
	December 31, 2010			December 31, 2009
Net asset value, beginning of the period	$	12.00		$	10.00
Net investment income(a)		0.10			0.04
Net realized and unrealized gain		1.15			2.67
Total from investment operations		1.25			2.71
Less:
Distributions from net investment income		0.02			0.25
Distributions from net realized gain		0.14			0.46
Total distributions		0.16			0.71
Net asset value, end of the period	$	13.09		$	12.00
Total return*		10.57	%(b)		28.21	%**
Net assets at end of the period (in thousands)	$	17.3		$	120.0
Ratio of expenses to average net assets*		0.89	%(c)		0.90	%(d)
Ratio of net investment income to average net assets*		0.88	%(c)		0.41	%(d)
Portfolio turnover(e)		444	%		87	%
* If certain expenses had not been assumed by the Adviser, total returns would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		1.29	%(c)		1.46	%(d)
Ratio of net investment income (loss) to average net assets		0.48	%(c)		(0.15	)%(d)

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Ratios are annualized and based on average daily net assets (000’s omitted) of $93.
(d)	Does not include expenses of the Underlying Funds in which the Fund invests. The annualized weighted average ratio of expense to average net assets for the Underlying Funds was 0.08% at December 31, 2009.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
ˆ	On June 1, 2010, the Class I shares of the predecessor fund were reorganized into Series I shares of the Fund.

**   Non-Annualized

See Accompanying Notes to the Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

Financial Highlights—(continued)

	Series II sharesˆ
				January 23, 2009
				(Commencement of
	For year ended,			operations) to
	December 31, 2010			December 31, 2009
Net asset value, beginning of the period	$	12.10		$	10.00
Net investment income(a)		0.07			0.05
Net realized and unrealized gain		1.04			2.74
Total from investment operations		1.11			2.79
Less:
Distributions from net investment income		0.02			0.23
Distributions from net realized gain		0.14			0.46
Total distributions		0.16			0.69
Net asset value, end of the period	$	13.05		$	12.10
Total return*		9.32	%(b)		27.86	%**(d)
Net assets at end of the period (in millions)	$	74.7		$	109.6
Ratio of expenses to average net assets*		1.14	%(c)		1.15	%(e)
Ratio of net investment income to average net assets*		0.59	%(c)		0.44	%(e)
Portfolio turnover(f)		444	%		87	%
* If certain expenses had not been assumed by the Adviser, total returns would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		1.54	%(c)		1.71	%(e)
Ratio of net investment income (loss) to average net assets		0.19	%(c)		(0.12	)%(e)

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Ratios are annualized and based on average daily net assets (000’s omitted) of $78,867.
(d)	These returns include combined Rule 12b-1 fees and service fees of up to 0.25%.
(e)	Does not include expenses of the Underlying Funds in which the Fund invests. The annualized weighted average ratio of expense to average net assets for the Underlying Funds was 0.08% at December 31, 2009.
(f)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
ˆ	On June 1, 2010, the Class II shares of the predecessor fund were reorganized into Series II shares of the Fund.

**   Non-Annualized

See Accompanying Notes to the Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each authorized to issue an unlimted number of shares of benefical interest”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as Van Kampen Life Investment Trust Global Tactical Asset Allocation Portfolio (the “Acquired Fund”), an investment portfolio of Van Kampen Life Investment Trust. The Acquired Fund was reorganized June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class I and Class II shares received Series I and Series II shares, respectively of the Fund.

  Information for the Acquired Fund’s Class I and Class II shares prior to the Reorganization are included with Series I and Series II shares, respectively, of the Fund throughout this report.

  The Fund’s investment objective is to seek capital appreciation over time. The Fund invests primarily in a diversified mix of equity securities and fixed income securities of U.S. and non-U.S. issuers.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies.

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
J.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
K.	Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities.
L.	Swap Agreements — The Fund may enter into various swap transactions, including interest rate, total return, index, currency exchange rate and credit default swap contracts (“CDS”) for investment purposes or to manage interest rate, currency or credit risk.
	Interest rate, total return, index, and currency exchange rate swap agreements are two-party contracts entered into primarily to exchange the returns (or differentials in rates of returns) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or “swapped” between the parties are calculated with respect to a notional amount, i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate or return of an underlying asset, in a particular foreign currency, or in a “basket” of securities representing a particular index.
	A CDS is an agreement between two parties (“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.
	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.
	Changes in the value of swap agreements are recognized as unrealized gains (losses) in the Statement of Operations by “marking to market” on a daily basis to reflect the value of the swap agreement at the end of each trading day. Payments received or paid at the beginning of the agreement are reflected as such on the Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Statement of Operations. The Fund segregates liquid securities having a value at least equal to the amount of the potential obligation of a Fund under any swap transaction. 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 posting of collateral by

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

	the counterparty to cover the Fund’s exposure to the counterparty. 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.
M.	Other Risks — The Fund may invest in affiliated mutual funds advised by Invesco Advisers, Inc. (the “Adviser” or “Invesco”) or unaffiliated exchange-traded funds (“underlying funds”). Each of the underlying funds in which the Fund invests has its own investment risks and those risks can affect the value of the underlying funds’ shares and therefore the value of the Fund’s investments. Each underlying fund’s accounting policies are outlined in the underlying fund’s financial statements and are available upon request.
N.	Offering Costs — Offering costs are amortized, on a straight-line basis, over a twelve month period.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $750 million		0	.75%
Next $750 million		0	.70%
Over $1.5 billion		0	.65%

  Prior to the reorganization, the Acquired Fund paid an advisory fee of $311,560 to Van Kampen Asset Management (“Van Kampen”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Funds, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to each Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization Date, the Adviser has contractually agreed, through at least June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit the Fund’s expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 0.90% and Series II shares to 1.15% of average daily net assets, respectively. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the Fund’s expenses after fee waiver and/or expense reimbursement to exceed the limit reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Prior to the Reorganization, Van Kampen had voluntarily agreed to waive fees and/or reimburse expenses of Class I and Class II shares of $108,733.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the period ended December 31, 2010, the Adviser waived advisory fees of $211,320.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the period ended December 31, 2010, Invesco was paid $7,390 for accounting and fund administrative services and reimbursed $93,546 for services provided by insurance companies. Prior to the Reorganization, under separate accounting services and Chief Compliance Officer (“CCO”) employment agreements, Van Kampen Investments, Inc. (“VKII”) provided accounting services and the CCO provided compliance services to the Acquired Fund. Pursuant to such agreement, the Acquired Fund paid $47,201 to VKII.

  Also, the Trust has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian and fund accountant and provides certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. Prior to the Reorganization, the Acquired Fund paid $6,508 to Van Kampen Investor Services, Inc., which served as the Acquired Fund’s transfer agent. For the year ended December 31, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

  Prior to the Reorganization, the Acquired Fund had entered into master distribution agreements with Van Kampen Funds Inc. (“VKFI”) to serve as the distributor for the Class II shares. Pursuant to such agreements, the Acquired Fund paid $103,730 to VKFI. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1			Level 2			Level 3		Total
Investments in an Asset Position
Common Stocks
Australia	$	—		$	1,450,118		$	—	$	1,450,118
Bermuda		405,030			—			—		405,030
Canada		2,574,136			—			—		2,574,136
Denmark		—			1,373,510			—		1,373,510
Finland		—			899,114			—		899,114
France		—			715,420			—		715,420
Germany		—			860,315			—		860,315
Hong Kong		—			1,224,704			—		1,224,704
Italy		3			922,334			—		922,337
Japan		—			5,507,437			—		5,507,437
Jersey Channel Islands		—			950,305			—		950,305
Netherlands		—			97,989			—		97,989
New Zealand		—			89,354			—		89,354
Norway		—			148,052			—		148,052
Singapore		—			226,906			—		226,906
Spain		—			767,253			—		767,253
Sweden		—			1,495,819			—		1,495,819
Switzerland		118,880			957,701			—		1,076,581
United Kingdom		—			4,300,668			—		4,300,668
United States		42,597,369			—			—		42,597,369
United States Government Agency Obligation		—			5,998,475			—		5,998,475
Forward Foreign Currency Contracts					2,567					2,567
Futures Contracts		197,853			—			—		197,853
Swap Agreements		—			146,562			—		146,562
Total Investments in an Asset Position	$	45,893,271		$	28,134,603		$	—	$	74,027,874
Investments in a Liability Position
Forward Foreign Currency Contracts		—			(33,994	)		—		(33,994	)
Futures Contracts		(63,612	)		—			—		(63,612	)
Total Investments in a Liability Position	$	(63,612	)	$	(33,994	)	$	—	$	(97,606	)

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

NOTE 4—Derivative Investments

Effect of Derivative Instruments for the year ended December 31, 2010

The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on
	Statement of Operations
						Forward
	Futures			Swap		Foreign Currency
	Contracts**			Agreements**		Contracts*
Realized Gain (Loss)
Currency risk	$	-0-		$	-0-	$	(2,840,926	)
Equity risk		256,260			-0-		-0-
Interest rate risk		745,186			1,155,719		-0-
Change in Unrealized Appreciation (Depreciation)
Currency risk	$	-0-		$	-0-	$	334,572
Equity risk		(441,833	)		-0-		-0-
Interest rate risk		148,454			146,562		-0-
Total	$	708,067		$	1,302,281	$	(2,506,354	)

*    The cost of purchases and the proceeds from sales of forward foreign currency contracts were $230,415,071 and $224,189,804, respectively.

**  The average notional value of futures and swap agreements outstanding during the period was $913,445,088 and $9,697,729, respectively.

  The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Value of Derivative Instruments at Period-End

The table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2010:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Currency risk
Forward Foreign Currency Contracts	$	2,567	$	(33,994	)
Equity risk
Futures Contracts		184,581		(35,034	)
Interest rate risk
Futures Contracts		13,272		(28,578	)
Swap Agreements		146,562		-0-

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

NOTE 5—Investments in Other Affiliates

The Fund and the mutual funds below have the same investment adviser and therefore are considered to be affiliated. The following is a summary of the transactions in and earnings from investments in affiliated mutual funds for the year ended December 31, 2010.

							Change in
							Unrealized
	Value		Purchases		Proceeds		Appreciation			Realized		Value		Dividend
	12/31/09		at Cost		from Sales		(Depreciation)			Gain (Loss)		12/31/10		Income
Liquid Asset Portfolio — Institutional Class	$	-0-	$	35,412,140	$	27,116,399	$	-0-		$	-0-	$	8,295,741	$	8,787
Premier Portfolio — Institutional Class		-0-		35,412,140		27,116,399		-0-			-0-		8,295,741		4,879
Morgan Stanley Institutional Fund, Inc. — Capital Growth Portfolio, Class I*		1,162,487		-0-		1,215,032		(300,248	)		352,793		-0-		-0-
Morgan Stanley Institutional Fund, Inc. — Emerging Markets Portfolio, Class I*		1,078,382		-0-		998,519		(101,453	)		21,590		-0-		-0-
Morgan Stanley Institutional Fund, Inc. — International Growth Equity Portfolio, Class I*		923,923		404		922,198		(159,180	)		157,051		-0-		404
Morgan Stanley Institutional Fund Trust — Core Plus Fixed Income Portfolio*		6,254,503		54,910		6,455,450		(5,188	)		151,225		-0-		54,910
Invesco Van Kampen High Yield Fund, Class Y**		1,161,054		57,099		1,202,005		(115,608	)		99,460		-0-		43,143
Invesco Van Kampen International Growth Fund, Class Y**		2,193,156		-0-		1,924,917		(305,152	)		36,913		-0-		-0-
Total	$	12,773,505	$	70,936,693	$	66,950,919	$	(986,829	)	$	819,032	$	16,591,482	$	112,123

*   As of June 1, 2010, this security is no longer affiliated.

**  On June 1, 2010, former Van Kampen funds Class I shares were reorganized into Class Y shares.

NOTE 6—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $623 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. Prior to the Reorganization, the Acquired Fund recognized expense of $1,410 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom LLP, of which a director of the Acquired Fund was a partner of such firm and he and his law firm provided legal services as legal counsel to the Acquired 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. 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

Distributions to Shareholders:

Tax Character of Distributions to Shareholders Paid During the Year Ended December 31, 2010 and Period Ended December 31, 2009:

	2010		2009
Ordinary income	$	1,156,905	$	5,145,625
Long-term capital gain		389,425		708,171
Total distributions	$	1,546,330	$	5,853,796

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	1,916,318
Undistributed long-term gain		4,264,947
Net unrealized appreciation — investments		6,054,381
Net unrealized appreciation — other investments		205,795
Temporary book/tax differences		(1,328	)
Post-October Currency loss deferral		(60,308	)
Shares of beneficial interest		62,312,858
Total net assets	$	74,692,663

  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.

  The Fund does not have a capital loss carryforward at period-end.

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $222,137,886 and $219,527,172, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	6,222,615
Aggregate unrealized (depreciation) of investment securities		(168,234	)
Net unrealized appreciation of investment securities	$	6,054,381
Cost of investments for tax purposes is $67,626,511.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions and net operating losses, on December 31, 2010, accumulated undistributed net investment income (loss) was decreased by $450,507, accumulated net realized gain was increased by $450,109 and capital was increased by $398. This reclassification had no effect on the net assets of the Fund.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

NOTE 11—Share Information

For the year ended December 31, 2010 and period ended December 31, 2009, transactions were as follows:

	Summary of Share Activity
	Year ended						Period ended
	December 31, 2010(a)						December 31, 2009
	Shares			Amount			Shares			Amount
Sales:
Series A		-0-		$	58			10,000		$	100,000
Series B		2,727,339			33,427,450			9,353,445			105,124,572
Total sales		2,727,339			33,427,508			9,363,445			105,224,572
Dividend reinvestment:
Series A		-0-			-0-			-0-			-0-
Series B		101,831			1,546,330			367,564			5,853,796
Total dividend reinvestment		101,831			1,546,330			367,564			5,853,796
Repurchases:
Series A		(8,675	)		(108,000	)		-0-			-0-
Series B		(6,161,080	)		(74,115,403	)		(665,357	)		(9,471,972	)
		(6,169,755	)	$	(74,223,403	)		(665,357	)	$	(9,471,972	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 95% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. In addition, less than 1% of the outstanding shares of the Fund are owned by Invesco or an investment advisor under common control with Invesco.

NOTE 12—Change in Independent Registered Public Accounting Firm (Unaudited)

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund (formerly known as Van Kampen Life Investment Trust Global Tactical Asset Allocation Portfolio; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 19, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
			ACTUAL				(5% annual return before expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,169.64	$	4.70	$	1,020.87	$	4.38		0.86	%
Series II		1,000.00		1,168.31		6.12		1,019.56		5.70		1.12

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco Van Kampen V.I. Global Tactical Asset Allocation 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Long-Term Capital Gain Dividends	$	389,425
Corporate Dividends Received Deduction*		0%
U.S. Treasury Obligations*		0%
Tax-exempt*		0%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco Van Kampen V.I. Global Value Equity Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VK-VIGVE-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2010, Invesco Van Kampen V.I. Global Value Equity Fund underperformed its benchmark, the MSCI World Index.

     Stock selection in the consumer staples and information technology (IT) sectors contributed to performance, while holdings in the financials, utilities and consumer discretionary sectors detracted from results during the reporting period.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	10.95	%
Series II Shares	10.69
MSCI World Index▼ (Broad Market Index)	11.76

^▼Lipper Inc.

How we invest

The Fund invests primarily in stocks of mid- and large-cap global companies with a record of stable earnings and strong balance sheets that are attractively valued relative to the broad market and their peers. We take a bottom-up, research driven approach to investing. We begin with a universe of global equity securities, from both developed and emerging markets, with greater than $1 billion in market capitalization and up to 10 years of financial statement information. We make adjustments to each company’s financial history for inflation rates and select accounting conventions to create a comparable basis for analysis.

     We then rank the universe using a proprietary, three-factor valuation ranking model that combines a company’s implied return, price/book ratio and price/earnings ratio. Attractively ranked companies are then subjected to rigorous fundamental research focused on evaluating the sustainability of company profitability. The most attractive stocks from the valuation screen which have

also successfully passed rigorous fundamental research are candidates for inclusion in the portfolio. At the portfolio level, we seek to achieve appropriate diversification relative to the index and take a long-term investment horizon in evaluating companies, which results in relatively low rates of portfolio turnover.

     We strive to maintain a consistent investment discipline through varying market conditions and an appropriate level of overall portfolio diversification. Individual holdings are selected based on their own merits, however, and not on projections of country or sector performance.

     Our sell discipline is a replication of the security selection process as we look to trim or liquidate positions in the portfolio based on valuation, fundamentals or portfolio design considerations.

Market conditions and your Fund

After rallying for much of 2009 on prospects of improving global economic conditions, global equity markets faced headwinds in 2010. Notably, several

southern European economies, including Greece, Spain, Portugal and Italy, faced solvency concerns amid massive fiscal deficits. Although the U.S. economy continued with a positive growth rate in 2010, investors continued to be concerned about high unemployment and a still-weak housing market. The period ended with a market upswing as a flurry of private sector merger and acquisition activity began – a sign of cash-rich corporations and strong balance sheets.

     In contrast, China enacted credit-tightening measures in early 2010 in an attempt to slow its economy. The combination of robust domestic economic developments and largely upbeat corporate earnings supported Asian equity markets during the period. However, concerns about potential overheating in emerging market economies, coupled with concerns of a potential double-dip recession in developed economies, continued to foster uncertainty about the pace and vigor of a global economic recovery.

     At the beginning of the year, riskier assets, like stocks, were outperforming securities considered safe havens, such as U.S. Treasuries. This trend continued through the middle of April 2010. Renewed credit problems overseas, and the market corrections that occurred in May, June and August, however, created a more uncertain environment, which prompted many investors to favor safety over risk. Although the path to economic recovery remained uncertain, several positive trends fueled a resurgence in global equity markets during the last few months of the reporting period. As bottom-up investors, we have seen the number of potential investment opportunities in attractive companies increase

Portfolio Composition

By country

United States	35.8	%
Japan	13.6
United Kingdom	8.4
Switzerland	5.7
France	4.5
Spain	3.1
Germany	2.7
Hong Kong	2.7
Australia	2.6
Canada	2.3
South Korea	2.2
Norway	2.1
Countries Each Less Than 2.0% of the Portfolio	11.7
Money Market Funds
Plus Other Assets Less Liabilities	2.6

Top 10 Equity Holdings*

1.	Royal Dutch Shell PLC-Class A	2.3	%
2.	ACE Ltd.	2.2
3.	Chevron Corp.	2.2
4.	BHP Billiton PLC	2.0
5.	General Dynamics Corp.	2.0
6.	Archer-Daniels-Midland Co.	1.9
7.	Oracle Corp.	1.9
8.	Coach, Inc.	1.9
9.	Nissan Motor Co.	1.8
10.	ConocoPhillips	1.8

Top Five Industries

1.	Integrated Oil & Gas	10.5	%
2.	Diversified Banks	8.0
3.	Pharmaceuticals	7.2
4.	Integrated Telecommunications Services	4.9
5.	Automobile Manufacturers	3.2

Total Net Assets	$44.7 million
Total Number of Holdings*		112

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.

Invesco Van Kampen V.I. Global Value Equity Fund

materially in recent months. With above-average market volatility possibly persisting for some time, we believe our investment approach is potentially well suited for the current climate.

     The Fund stayed true to its process by maintaining its quality orientation in stock selection. Our stock selection in the consumer staples and IT sectors made the largest contribution to the Fund’s relative results. Within IT, U.S.-based Oracle, an enterprise software company, acquired Sun Microsystems and Silver Creek Systems. Stock selection and our underweight position in the consumer discretionary and financials sectors detracted from relative performance, failing to keep pace with the benchmark’s gains. Within the financials sector, U.K.-based Prudential PLC, is an international financial services company with its principal operations in the U.K., the U.S. and Asia. We liquidated this holding from the Fund.

     The Fund’s performance in the energy sector was hurt by our allocation to energy corporation BP, which faced a difficult environment in the wake of the well disaster in the Gulf of Mexico. We sold BP. On an absolute basis, all sectors in the Fund posted positive returns during the year with the exception of our utilities holdings.

     From a geographical perspective, all global regions represented in the Fund generated positive absolute performance during the year. Japan contributed the most to absolute returns, while Europe contributed the least on a relative basis. The Fund’s exposure to Hong Kong, Greece and Canada detracted from performance during the year. Conversely, our stock selection in Spain, the U.S. and the U.K. helped Fund performance versus the benchmark. The Fund also benefited from favorable Japanese stock selection throughout the period, leading to profit taking in a number of stocks. The allocation to Japan remained neutral to the benchmark during the year. Additionally, exposure to non-benchmark areas such as emerging markets contributed during the period.

     From a positioning perspective, the Fund remained underweight in financials relative to the benchmark. From a geographic perspective, the Fund maintained a healthy weighting in emerging markets and Canada, while being overweight in Japan and underweight in the U.S. relative to the benchmark. Fund holdings are determined based on the merits of individual securities and not on a country or sector basis.

     Market participants are vacillating between inconsistent economic data and strong momentum in earnings from the corporate sector. At the same time, balance sheet repair has been actively pursued on multiple fronts by consumers, financial institutions and select governments. While these ultimately healthy initiatives may temper the pace of economic recovery in the near term, falling government bond yields lowered mortgage rates to even more affordable levels, thus providing some level of support for the housing market. In the face of these conflicting signals, we believe above-average equity market and foreign exchange volatility could persist. We believe our emphasis on profitability and attractive valuations has the potential to serve clients well over the long-term.

     We would like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult your financial adviser to discuss your individual financial program.

     We welcome any new investors who joined the Fund during the year, and to all of our shareholders, we thank you for your continued investment in Invesco Van Kampen V.I. Global Value Equity Fund.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Ingrid Baker
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Global Value Equity Fund. She joined Invesco in 1999. Ms. Baker earned a B.A. in international politics from Oberlin College. She also earned an M.B.A. in finance from the University of Navarra.

W. Lindsay Davidson
Portfolio manager, is manager of Invesco Van Kampen V.I. Global Value Equity Fund. He joined Invesco in 1984. Mr. Davidson earned a degree in economics from Edinburgh University.

E. Sargent McGowan
Chartered Financial Analyst, portfolio manager and Head of Developed Market Equities, is manager of Invesco Van Kampen V.I. Global Value Equity Fund. He joined Invesco in 2002. Mr. McGowan earned a B.S. in commerce from the University of Virginia and an M.B.A. in investment management from the University of North Carolina.

Anuja Singha
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Global Value Equity Fund. She joined Invesco in 1998. Ms. Singha earned a B.A. and a Ph.D. in economics from Emory University.

Stephen Thomas
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Global Value Equity Fund. He joined Invesco in 2000. Mr. Thomas earned a B.B.A. in banking/ finance and an M.B.A. from the University of Mississippi.

Invesco Van Kampen V.I. Global Value Equity Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 12/31/96, Fund data from 1/2/97

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (1/2/97)			4.63	%
	10	Years	1.77
	5	Years	-0.09
	1	Year	10.95
Series II Shares
	10	Years	1.52	%
	5	Years	-0.33
	1	Year	10.69

Effective June 1, 2010, Class I shares of the predecessor fund advised by Morgan Stanley Investment Management Inc. were reorganized into Series I shares of Invesco Van Kampen V.I. Global Value Equity Fund. Returns shown above for Series I shares are blended returns of the predecessor fund and Invesco Van Kampen V.I. Global Value Equity Fund. Share class returns will differ from the predecessor fund because of different expenses.

     Series II shares incepted on June 1, 2010. Series II shares performance shown prior to that date is that of the predecessor fund’s Class I shares restated to reflect the higher 12b-1 fees applicable to Series II shares. Class I shares performance reflects

any applicable fee waivers or expense reimbursements. The inception date of the predecessor fund’s Class I shares is January 2, 1997.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.15% and 1.40%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.31% and 1.56%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses

incurred during the period covered by this report.

     Invesco Van Kampen V.I. Global Value Equity Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco Van Kampen V.I. Global Value Equity Fund

Invesco Van Kampen V.I. Global Value Equity Fund’s investment objective is long-term capital appreciation by investing primarily in equity securities of issuers throughout the world, including U.S. issuers.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

In general, prices of equity securities are more volatile than those of fixed income securities. Prices of equity securities will rise and fall in response to events that affect entire financial markets or industries and to events that affect particular issuers. Investing in convertible securities may subject the portfolio to the risks associated with both fixed income securities and common stocks.

     Value stocks can react differently to issuer, political, market and economic developments than the market as a whole and other types of stocks. Value stocks can continue to be undervalued for long periods of time and may not ever realize their full value.

     Investing in the securities of foreign issuers, particularly those located in emerging market or developing countries entails the risk that news and events unique to a country or region will affect those markets and their issuers. In addition, the Fund’s investments in foreign issuers generally will be denominated in foreign currencies. As a result, changes in the value of a country’s currency compared to the U.S. dollar may affect the value of the Fund’s investments.

     Investing in real estate investment trusts (REITs) makes the Fund more susceptible to risks associated with the ownership of real estate and with the real estate industry in general and may involve duplication of management fees and other expenses. REITs may be less diversified than other pools of securities, may have lower trading volumes and may be subject to more abrupt or erratic price movements than the overall securities markets.

     Risks of derivatives include the possible imperfect correlation between the value of the instruments and the underlying assets; risks of default by the other party to the transaction; risks that the transactions may result in losses that partially or completely offset gains in portfolio positions; and risks that the transactions may not be liquid.

About indexes used in this report

The MSCI World Index^SM is an unmanaged index considered representative of stocks of developed countries.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco Van Kampen V.I. Global Value Equity Fund

Schedule of Investments

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–95.79%
Australia–2.57%
Australia & New Zealand Banking Group Ltd.		17,046	$	407,098
Macquarie Group Ltd.		9,392		355,523
Telstra Corp. Ltd.		136,299		388,944
				1,151,565
Bermuda–0.86%
PartnerRe Ltd.		4,777		383,832
Brazil–1.49%
Banco Santander Brasil S.A.(a)		10,100		137,409
Companhia Energetica de Minas Gerais–ADR		6,999		116,113
PDG Realty S.A. Empreendimentos e Participacoes		23,600		144,443
Petroleo Brasileiro S.A.–ADR		3,573		135,202
Vale S.A.–ADR		3,900		134,823
				667,990
Canada–2.29%
Nexen Inc.		23,858		547,081
Toronto-Dominion Bank (The)		6,370		475,684
				1,022,765
China–0.97%
China Construction Bank Corp.–Class H		80,000		71,622
China Dongxiang Group Co.		153,000		66,138
China Minsheng Banking Corp., Ltd.–Class H		96,000		82,132
CNOOC Ltd.		41,000		97,555
Renhe Commercial Holdings Co., Ltd.		660,000		115,480
				432,927
Finland–0.86%
Nokia Oyj–ADR		37,411		386,082
France–4.50%
BNP Paribas		8,323		531,346
Bouygues S.A.		11,097		479,197
Sanofi-Aventis S.A.		7,344		471,593
Total S.A.		10,000		531,034
				2,013,170
Germany–1.28%
Salzgitter AG		7,397		571,038
Hong Kong–2.75%
Chaoda Modern Agriculture Holdings Ltd.		80,000		60,004
Cheung Kong Holdings Ltd.		29,000		446,354
China Unicom (Hong Kong) Ltd.		66,000		94,122
Esprit Holdings Ltd.		132,400		630,249
				1,230,729
Indonesia–0.17%
PT Telekomunikasi Indonesia Tbk		85,000		75,202
Ireland–0.21%
Dragon Oil PLC(b)		11,101		93,114
Italy–1.01%
Eni S.p.A.		20,698		451,947
Japan–13.60%
Canon Inc.		8,600		440,876
FUJIFILM Holdings Corp.		12,500		452,026
Mitsubishi Corp.		25,000		676,807
Mitsubishi UFJ Financial Group, Inc.		123,300		666,692
Murata Manufacturing Co., Ltd.		6,200		434,512
Nippon Telegraph & Telephone Corp.		14,800		677,104
Nippon Yusen Kabushiki Kaisha		131,000		580,860
Nissan Motor Co., Ltd.		86,000		818,795
Seven & I Holdings Co., Ltd.		14,900		398,239
Sumitomo Chemical Co., Ltd.		110,000		541,938
Takeda Pharmaceutical Co., Ltd.		8,000		393,645
				6,081,494
Mexico–0.48%
America Movil S.A.B. de C.V.–Series L		37,800		108,350
Desarrolladora Homex S.A.B. de C.V.–ADR(b)		3,203		108,293
				216,643
Netherlands–1.73%
TNT N.V.		15,662		414,024
Unilever N.V.		11,514		358,500
				772,524
Norway–2.06%
Statoil A.S.A.		16,553		393,184
Yara International A.S.A.		9,169		530,336
				923,520
Poland–0.31%
KGHM Polska Miedz S.A.		2,381		139,507

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Global Value Equity Fund

	Shares		Value
Russia–0.66%
Gazprom OAO–ADR		4,147	$	104,712
Magnitogorsk Iron & Steel Works–GDR		6,930		100,832
Rosneft Oil Co.–GDR		12,483		89,378
				294,922
South Africa–1.33%
Barloworld Ltd.		13,773		140,082
Sasol Ltd.		2,044		107,445
Standard Bank Group Ltd.		7,266		118,627
Steinhoff International Holdings Ltd.(b)		35,234		131,041
Tiger Brands Ltd.(b)		3,309		97,263
				594,458
South Korea–2.19%
Dongbu Insurance Co., Ltd.		1,870		74,148
Hyundai Mipo Dockyard Co., Ltd.		758		149,610
Hyundai Mobis		747		187,260
LG Electronics Inc.		580		60,911
Lotte Shopping Co., Ltd.		113		47,096
POSCO		298		127,624
Samsung Electronics Co., Ltd.		210		175,601
Shinhan Financial Group Co., Ltd.		2,120		98,818
SK Telecom Co., Ltd.–ADR		3,141		58,516
				979,584
Spain–3.09%
Banco Santander S.A.		44,613		474,030
Iberdrola S.A.		64,093		494,018
Telefonica S.A.		18,286		415,297
				1,383,345
Switzerland–5.68%
ACE Ltd.		16,021		997,306
Holcim Ltd.		6,662		503,391
Swisscom AG		1,266		556,907
Zurich Financial Services AG		1,858		481,292
				2,538,896
Taiwan–0.92%
AU Optronics Corp.–ADR		8,244		85,902
HTC Corp.		5,300		163,600
Powertech Technology Inc.		36,000		119,423
U-Ming Marine Transport Corp.		20,000		43,558
				412,483
Thailand–0.36%
Bangkok Bank PCL–NVDR		19,800		96,553
PTT PCL		6,100		64,754
				161,307
Turkey–0.19%
Asya Katilim Bankasi A.S.		46,902		86,396
United Kingdom–8.45%
Barclays PLC		75,920		312,337
BHP Billiton PLC		22,913		913,504
GlaxoSmithKline PLC		19,712		382,894
Imperial Tobacco Group PLC		24,951		765,569
National Grid PLC		42,774		372,933
Royal Dutch Shell PLC–Class A		30,862		1,030,152
				3,777,389
United States–35.78%
3M Co.		6,248		539,202
Apache Corp.		4,241		505,654
Archer-Daniels-Midland Co.		28,564		859,205
Avon Products, Inc.		12,449		361,768
Bank of America Corp.		42,764		570,472
Bank of New York Mellon Corp. (The)		16,043		484,499
Best Buy Co., Inc.		9,205		315,639
Chevron Corp.		10,772		982,945
Coach, Inc.		15,137		837,227
ConocoPhillips		11,886		809,437
CVS Caremark Corp.		16,178		562,509
Energen Corp.		14,315		690,842
GameStop Corp.–Class A(b)		21,489		491,668
General Dynamics Corp.		12,668		898,921
Gilead Sciences, Inc.(b)		11,117		402,880
Johnson & Johnson		12,788		790,938
Merck & Co., Inc.		22,219		800,773
Microsoft Corp.		16,636		464,477
Morgan Stanley		19,253		523,874
Oracle Corp.		27,273		853,645
Pfizer, Inc.		22,717		397,775
Stryker Corp.		7,779		417,732
Valero Energy Corp.		22,928		530,095
W. R. Berkley Corp.		12,925		353,887
WellPoint Inc.(b)		13,771		783,019
Western Digital Corp.(b)		22,870		775,293
				16,004,376
Total Common Stocks & Other Equity Interests (Cost $37,233,664)				42,847,205
Preferred Stocks–1.60%
Brazil–0.18%
Usinas Siderurgicas de Minas Gerais S.A.–Class A, 2.66%–Pfd.		6,800		78,487

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Global Value Equity Fund

	Shares		Value
Germany–1.42%
Porsche Automobil Holding SE 0.14%-Pfd.		7,945	$	633,409
Total Preferred Stocks (Cost $433,511)				711,896
Money Market Funds–2.73%
Liquid Assets Portfolio–Institutional Class(c)		611,524		611,524
Premier Portfolio–Institutional Class(c)		611,524		611,524
Total Money Market Funds (Cost $1,223,048)				1,223,048
TOTAL INVESTMENTS–100.12% (Cost $38,890,223)				44,782,149
OTHER ASSETS LESS LIABILITIES–(0.12)%				(53,015	)
NET ASSETS–100.00%			$	44,729,134

Investment Abbreviations:

ADR	– American Depositary Receipt
GDR	– Global Depositary Receipt
NVDR	– Non-Voting Depositary Receipt
Pfd.	– Preferred

Notes to Schedule of Investments:

(a)	Each unit represents 55 common shares and 50 preference shares.
(b)	Non-income producing security.
(c)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Global Value Equity Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $37,667,175)	$	43,559,101
Investments in affiliated money market funds, at value and cost		1,223,048
Total investments, at value (Cost $38,890,223)		44,782,149
Foreign currencies, at value (Cost $5,163)		5,472
Receivable for:
Fund shares sold		3,936
Dividends		86,634
Investment for trustee deferred compensation and retirement plans		1,096
Total assets		44,879,287
Liabilities:
Payable for:
Fund shares reacquired		58,993
Accrued fees to affiliates		61,825
Accrued other operating expenses		28,239
Trustee deferred compensation and retirement plans		1,096
Total liabilities		150,153
Net assets applicable to shares outstanding	$	44,729,134
Net assets consist of:
Shares of beneficial interest	$	58,297,889
Undistributed net investment income		1,425,720
Undistributed net realized gain (loss)		(20,889,545	)
Unrealized appreciation		5,895,070
	$	44,729,134
Net assets:
Series I	$	44,717,079
Series II	$	12,055
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		5,678,663
Series II		1,534
Series I:
Net asset value per share	$	7.87
Series II:
Net asset value per share	$	7.86

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $103,054)	$	1,356,614
Dividends from affiliated money market funds (includes securities lending income of $3,503)		3,608
Total investment income		1,360,222
Expenses:
Advisory fees		288,811
Administrative services fees		136,926
Custodian fees		17,580
Distribution fees — Series II		16
Transfer agent fees		5,165
Trustees’ and officers’ fees and benefits		8,064
Professional services fees		28,486
Other		11,516
Total expenses		496,564
Less: Fees waived		(11,828	)
Net expenses		484,736
Net investment income		875,486
Realized and unrealized gain (loss) from:
Net realized gain from:
Investment securities		1,458,389
Foreign currencies		529,784
Foreign currency contracts		186,599
		2,174,772
Change in net unrealized appreciation (depreciation) of:
Investment securities (net of foreign taxes on holdings of $(1,091)		1,507,451
Foreign currencies		3,066
Foreign currency contracts		(213,713	)
		1,296,804
Net realized and unrealized gain		3,471,576
Net increase in net assets resulting from operations	$	4,347,062

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Global Value Equity Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	875,486		$	1,451,529
Net realized gain		2,174,772			858,582
Change in net unrealized appreciation		1,296,804			3,798,012
Net increase in net assets resulting from operations		4,347,062			6,108,123
Distributions to shareholders from net investment income:
Series I		(823,810	)		(3,097,718	)
Share transactions-net:
Series I		(4,776,026	)		(5,647,809	)
Series II		10,000			—
Net increase (decrease) in net assets resulting from share transactions		(4,766,026	)		(5,647,809	)
Net increase (decrease) in net assets		(1,242,774	)		(2,637,404	)
Net assets:
Beginning of year		45,971,908			48,609,312
End of year (includes undistributed net investment income of $1,425,720 and $642,607, respectively)	$	44,729,134		$	45,971,908

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen V.I. Global Value Equity Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as Universal Funds Global Value Equity Portfolio (the “Acquired Fund”), an investment portfolio of The Universal Institutional Funds, Inc. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class I shares received Series I shares of the Fund. Information for the Acquired Fund’s Class I shares prior to the Reorganization is included with Series I shares of the Fund throughout this report.

  The Fund’s investment objective is long-term capital appreciation by investing primarily in equity securities of issuers throughout the world, including U.S. issuers.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).

Invesco Van Kampen V.I. Global Value Equity Fund

	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.

Invesco Van Kampen V.I. Global Value Equity Fund

	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
K.	Foreign Currency Contracts — The Fund may enter into foreign currency contracts to manage or minimize currency or exchange rate risk. The Fund may also enter into foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to “lock in” the U.S. dollar price of that security. A foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.

Invesco Van Kampen V.I. Global Value Equity Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $1 billion		0	.67%
Next $500 million		0	.645%
Next $1 billion		0	.62%
Next $1 billion		0	.595%
Next $1 billion		0	.57%
Over $4.5 billion		0	.545%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee to Morgan Stanley Investment Management Inc. (“MSIM”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of master sub-advisory agreements between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s). Prior to the Reorganization, Morgan Stanley Investment Management Limited served as sub-adviser to the Acquired Fund.

  Effective on the Reorganization date, the Adviser has contractually agreed, through at least June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 1.15% and Series II shares to 1.40% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Prior to the Reorganization, MSIM had voluntarily agreed to waive fees and/or reimburse expenses of Class I shares to 1.15% of the Acquired Fund’s average daily net assets.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds. Prior to the Reorganization, investment advisory fees paid by the Acquired Fund were reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class shares.

  For the year ended December 31, 2010, the Adviser and MSIM waived advisory fees of $11,659 and $169, respectively.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $29,315 for accounting and fund administrative services and reimbursed $61,435 for services provided by insurance companies. Prior to the Reorganization, the Acquired Fund paid an administration fee of $46,176 to MSIM and JPMorgan Investor Services Co.

  Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian, fund accountant and provides certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. Prior to the Reorganization, the Acquired Fund paid $568 to Morgan Stanley Services Company Inc., which served as the Acquired Fund’s transfer agent. For the year ended December 31, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

Invesco Van Kampen V.I. Global Value Equity Fund

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1*		Level 2*		Level 3		Total
Australia		1,151,565		—		—		1,151,565
Bermuda		383,832		—		—		383,832
Brazil		609,069		137,408		—		746,477
Canada		1,022,765		—		—		1,022,765
China		263,750		169,177		—		432,927
Finland		386,082		—		—		386,082
France		—		2,013,170		—		2,013,170
Germany		1,204,447		—		—		1,204,447
Hong Kong		690,253		540,476		—		1,230,729
Indonesia		—		75,202		—		75,202
Ireland		93,114		—		—		93,114
Italy		451,947		—		—		451,947
Japan		4,963,514		1,117,980		—		6,081,494
Mexico		216,643		—		—		216,643
Netherlands		358,500		414,024		—		772,524
Norway		923,520		—		—		923,520
Poland		—		139,507		—		139,507
Russia		294,922		—		—		294,922
South Africa		594,458		—		—		594,458
South Korea		791,049		188,535		—		979,584
Spain		494,018		889,327		—		1,383,345
Switzerland		2,538,896		—		—		2,538,896
Taiwan		293,060		119,423		—		412,483
Thailand		161,307		—		—		161,307
Turkey		—		86,396		—		86,396
United Kingdom		765,569		3,011,820		—		3,777,389
United States		17,227,424		—		—		17,227,424
Total Investments	$	35,879,704	$	8,902,445	$	—	$	44,782,149

*  Transfers occurred between Level 1 and Level 2 due to foreign fair value adjustments.

Invesco Van Kampen V.I. Global Value Equity Fund

NOTE 4—Derivative Investments

The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Effect of Derivative Instruments for the year ended December 31, 2010

The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on
	Statement of Operations
	Foreign Currency Contracts*
Realized Gain
Currency risk	$	186,599
Change in Unrealized Appreciation (Depreciation)
Currency risk		(213,713	)
Total	$	(27,114	)

*  The average value of foreign currency contracts outstanding during the period was $3,397,060.

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the period ended December 31, 2010, the Fund paid legal fees of $609 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	823,870	$	3,097,718

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	1,429,309
Net unrealized appreciation — investments		5,877,017
Net unrealized appreciation — other investments		3,144
Temporary book/tax differences		(997	)
Post-October deferrals		(2,592	)
Capital loss carryforward		(20,874,636	)
Shares of beneficial interest		58,297,889
Total net assets	$	44,729,134

  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 difference is attributable primarily to wash sales.

Invesco Van Kampen V.I. Global Value Equity Fund

  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 utilized $1,219,041 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	2,956,661
December 31, 2017		17,917,975
Total capital loss carryforward	$	20,874,636

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $54,437,384 and $58,853,208, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	6,168,922
Aggregate unrealized (depreciation) of investment securities		(291,905	)
Net unrealized appreciation of investment securities	$	5,877,017
Cost of investments for tax purposes is $38,905,132

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions and net operating losses, on December 31, 2010, undistributed net investment income was increased by $731,437, and undistributed net realized gain (loss) was decreased by $731,437. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		424,256		$	3,147,637			610,980		$	4,100,196
Series II(b)		1,534			10,000			—			—
Issued as reinvestment of dividends:
Series I		123,510			823,810			507,823			3,097,721
Reacquired:
Series I		(1,215,233	)		(8,747,473	)		(1,974,372	)		(12,845,726	)
Net increase (decrease) in share activity		(665,933	)	$	(4,766,026	)		(855,569	)	$	(5,647,809	)

(a)

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 93% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

(b)

Commencement date of June 1, 2010.

Invesco Van Kampen V.I. Global Value Equity Fund

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																											Ratio of			Ratio of
																											expenses			expenses
					Net gains																						to average			to average net			Ratio of net
	Net asset		Net		(losses) on						Dividends			Distributions													net assets			assets without			investment
	value,		investment		securities (both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income		realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)(a)		unrealized)			operations			income			gains			Distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	7.24	$	0.15	$	0.62		$	0.77		$	(0.14	)	$	—		$	(0.14	)	$	7.87		10.95	%	$	44,717		1.12	%(d)		1.15	%(d)		2.04	%(d)		130
Year ended 12/31/09		6.75		0.22		0.77			0.99			(0.50	)		—			(0.50	)		7.24	��	15.99			45,972		1.15	(e)		1.20	(e)		3.33	(e)(f)		79
Year ended 12/31/08		16.46		0.30		(5.71	)		(5.41	)		(0.35	)		(3.95	)		(4.30	)		6.75		(40.15	)		48,610		1.11	(e)		1.11	(e)		2.69	(e)		93
Year ended 12/31/07		16.99		0.25		0.94			1.19			(0.33	)		(1.39	)		(1.72	)		16.46		6.64			107,470		1.00	(e)		1.00	(e)		1.47	(e)		36
Year ended 12/31/06		14.87		0.24		2.78			3.02			(0.26	)		(0.64	)		(0.90	)		16.99		21.21			151,300		1.50			1.50			1.53			29
Series II
Year ended 12/31/10(g)		6.52		0.07		1.27			1.34			—			—			—			7.86		20.55			12		1.40	(d)(h)		1.45	(d)(h)		1.76	(d)(h)		130

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $43,100 and $11 for Series I and Series II, respectively.
(e)	Ratios reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios was less than 0.005% for the years ended December 31, 2009, 2008 and 2007, respectively.
(f)	Ratio of net investment income to average net assets without fee waivers and/or expenses absorbed was 3.28% for the year ended December 31, 2009.
(g)	Commencement date of June 1, 2010.
(h)	Annualized.

NOTE 12—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would acquire all of the assets and liabilities of Invesco V.I. Global Dividend Growth Fund (the “Target Fund”) in exchange for shares of the Fund. The Agreement requires approval of the Target Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

NOTE 13—Change in Independent Registered Public Accounting Firm (Unaudited)

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Invesco Van Kampen V.I. Global Value Equity Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco Van Kampen V.I. Global Value Equity Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen V.I. Global Value Equity Fund, (formerly known as Universal Institutional Global Value Equity Portfolio; one of the funds constituting Invesco Variable Insurance Funds, hereafter referred to as the “Fund”) at December 31, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2010 by correspondence with the custodian, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 19, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco Van Kampen V.I. Global Value Equity Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,224.00	$	6.39	$	1,019.46	$	5.80	$	1.14	%
Series II		1,000.00		1,224.30		7.79		1,018.20		7.07		1.39

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco Van Kampen V.I. Global Value 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	61.62%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco Van Kampen V.I. Global Value Equity Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco Van Kampen V.I. Government Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VK-VIGOV-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

As part of Invesco’s June 1, 2010, acquisition of Morgan Stanley’s retail asset management business, Van Kampen Life Investment Trust Government Portfolio was reorganized as Invesco Van Kampen V.I. Government Fund. Brian Schneider and Clint Dudley have managed the Fund since June 1, 2010. A listing of your Fund’s managers appears later in this report.

     For the year ended December 31, 2010, Invesco Van Kampen V.I. Government Fund underperformed its style-specific index. Duration decisions caused the Fund to slightly underperform its style-specific benchmark.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	5.23	%
Series II Shares	4.88
Barclays Capital U.S. Government/Mortgage Index▼
(Broad Market/Style-Specific Index)	5.41

^▼ Lipper Inc.

How we invest

We invest primarily in debt securities issued, guaranteed or backed by the U.S. government or its agencies and instrumentalities. These securities include: U.S. Treasury notes and bonds, U.S. agency debentures and agency-backed mortgage-backed securities (MBS). The Fund may invest in derivative instruments such as interest rate futures contracts and engage in mortgage dollar roll transactions, a form of repurchase agreement activity in the to-be-announced (TBA) market for agency MBS.

     Our security selection is supported by a team of independent specialists. Team members conduct top-down macroeconomic, as well as bottom-up analysis on individual securities. Recommendations are communicated to portfolio managers through proprietary technology that allows all investment professionals to communicate in a timely manner.

     Portfolio construction begins with a well-defined Fund design that establishes the target investment vehicles for

generating the desired “alpha” (the extra return above a specific benchmark), as well as the risk parameters for the Fund. Investment vehicles are evaluated for liquidity and relative value.

     Sell decisions are based on:

n	A conscious decision to alter the Fund’s macro risk exposure (such as duration, yield curve positioning, sector exposure).
n	The need to limit or reduce exposure to a particular sector or issuer.
n	Degradation of an issuer’s credit quality.
n	Realignment of a valuation target.
n	Presentation of a better relative value opportunity.

Market conditions and your Fund

In the U.S. and much of the developed world, a gradual and somewhat lackluster recovery continued during 2010, with central banks keeping interest rates at low levels and with few of them withdrawing their quantitative easing measures. This helped private sector companies

improve their balance sheets and earnings following the global financial crisis that began to dissipate in early 2009. However, investor skepticism of global governments’ abilities to retire huge amounts of debt without affecting economic growth rates caused sovereign debt distress (especially for eurozone countries) and became a focal point of investor concern.

     In the U.S., economic recovery was present, although the pace remained modest as stubbornly high unemployment and housing sector weakness continued to weigh on the economy. Real gross domestic product (GDP), the broadest measure of overall U.S. economic activity, increased at an annual rate of 3.7%, 1.7% and 2.6% for the first, second and third quarters of 2010, respectively.¹ The U.S. Federal Reserve (the Fed) maintained a very accommodative monetary policy throughout the period, with the federal funds target rate unchanged in its range of zero to 0.25%.² The Fed recently described its view of the U.S. economy by stating: “The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated.”²

     U.S. Treasury yields for securities with maturities of two to 30 years ended the year lower than at the start, indicative of positive 12-month returns across government bond sectors.³ Treasuries performed well for the year despite a significant rise in yields for intermediate and longer maturity securities during the final three months of the year, driven by rising inflation expectations and improving economic data. The broader U.S. investment grade bond market, as measured by the Barclays Capital U.S. Aggregate Index, also generated a

Portfolio Composition

By asset type

Mortgage Backed Securities	46.7	%
Collateralized Mortgage Obligations	30.2
United States Treasury Obligations	14.6
United States Government Agency
Obligations	9.1
Agency Bonds	7.0
Adjustable Rate Mortgage Backed
Securities	1.1
Money Market Funds
Plus Liabilities in Excess of Other Assets	-8.7

Top 10 Fixed Income Issuers*

1.	Fannie Mae	39.4	%
2.	Freddie Mac	24.4
3.	U.S. Treasury Securities	14.6
4.	Government National
	Mortgage Association	12.1
5.	Federal Home Loan Bank	5.7
6.	Citibank	3.1
7.	La Hipotecaria S.A.	2.1
8.	Ally Financial Inc.	1.6
9.	Financing Corp.	1.3
10.	General Electric Capital Corp.	1.0

Total Net Assets	$297.2 million
Total Number of Holdings*		156

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.

Invesco Van Kampen V.I. Government Fund

positive total return for the 12 months ended December 31, 2010. Slow economic growth, the avoidance of a double-dip recession, a recovery in corporate financial health, strong inflows into credit-related asset classes and low overall interest rates supported the performance of bonds, especially in non-government sectors.

     In this market environment, the Fund generated positive returns, but slightly underperformed its style-specific index, the Barclays Capital U.S. Government/ Mortgage Index, for the year. Since taking over management of the Fund in June, sector allocation and security selection decisions that favored the yield advantage and price stability of short average life agency MBS collateralized mortgage obligations (CMOs) and higher coupon agency pass-through MBS benefited total return performance versus the style-specific index, and contributed to a higher-than-index average yield-to-maturity for the period. To accommodate the emphasis on agency CMO and MBS, the Fund maintained an underweight allocation in lower yielding fixed-rate, fixed-maturity U.S. Treasuries. Security selection among Treasuries and agency MBS benefited the Fund. We emphasized higher coupon 30-year MBS during the period when the high coupon portion of the style-specific benchmark outperformed Treasuries by a significant margin.³ The Fund also benefited from incremental income earned by engaging in dollar (mortgage) roll activity, a type of repurchase transaction in the highly liquid TBA market for agency MBS. A dollar roll involves the Fund selling an MBS to a financial institution, with an agreement to repurchase a substantially similar security at an agreed upon price and date. Cash proceeds of the sale may be invested in short-term instruments, and the income from these investments, together with any additional fee income received on the sale, generate income for the Fund.

     The Fund also uses active duration and yield curve positioning for risk management and for generating alpha versus its benchmark. Duration measures a portfolio’s price sensitivity to interest rate changes, with a shorter duration portfolio tending to be less sensitive to these changes. The contribution to performance from duration position versus the style-specific benchmark was mixed over the period, but overall it had a negative effect. A sustained, longer-than-style-specific benchmark duration posture during much of the second half of the

year was beneficial to relative returns during the third quarter as rates continued to decline. However, this strategy was detrimental during the fourth quarter of 2010 as there was a significant rise in interest rates. Yield curve positioning during the third quarter, when the Fund held a greater quantity of longer duration securities than the index, also had a slight negative effect on performance. U.S. Treasury note futures contracts were an important tool used in the management of our targeted portfolio duration.

     We thank you for your investment in Invesco Van Kampen V.I. Government Fund.

1  Bureau of Economic Analysis

2  U.S. Federal Reserve

3  Barclays Capital

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Clint Dudley
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Government Fund. He joined Invesco in 1998. Mr. Dudley earned a B.B.A. and an M.B.A. from Baylor University. He is a member of the CFA Institute.

Brian Schneider
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Government Fund. He joined Invesco in 1987. Mr. Schneider earned a B.A. in economics and an M.B.A., both from Bellarmine College.

Invesco Van Kampen V.I. Government Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 3/31/86, Fund data from 4/7/86

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (4/7/86)	5.84	%
10 Years	4.43
5 Years	3.71
1 Year	5.23
Series II Shares
Inception (12/15/00)	4.19	%
10 Years	4.18
5 Years	3.45
1 Year	4.88

Effective June 1, 2010, Class I and Class II shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Series I and Series II shares, respectively, of Invesco Van Kampen V.I. Government Fund. Returns shown above for Series I and Series II shares are blended returns of the predecessor fund and Invesco Van Kampen V.I. Government Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and

cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.60% and 0.85%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.86% and 1.11%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco Van Kampen V.I. Government Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco Van Kampen V.I. Government Fund

Invesco Van Kampen V.I. Government Fund’s investment objective is to seek to provide investors with high current return consistent with preservation of capital.

n Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.

n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

Risks of derivatives include the possible imperfect correlation between the value of the instruments and the underlying assets; risks of default by the other party to the transaction; risks that the transactions may result in losses that partially or completely offset gains in portfolio positions; and risks that the transactions may not be liquid.

     Credit risk refers to an issuer’s ability to make timely payments of interest and principal. Credit risk should be low for the Fund because it invests substantially all of its assets in U.S. Government securities.

     The income you receive from the Fund is based primarily on interest rates, which can vary widely over the short-and long-term. If interest rates drop, your income from the Fund may drop as well. The more the Fund invests in adjustable, variable or floating rate securities or in securities susceptible to prepayment risk, the greater the Fund’s income risk.

     Market risk is the possibility that the market values of securities owned by the Fund will decline. The prices of debt securities tend to fall as interest rates rise, and such declines tend to be greater among debt securities with longer maturities. The yields and market prices of U.S. government securities may move differently and adversely compared to the yields and market prices of the overall securities markets. U.S. government securities, while backed by the U.S. government, are not guaranteed against declines in their market prices. As interest rates change, zero coupon bonds often fluctuate more in price than securities that make regular interest payments and therefore subject the Fund to greater market risk than a fund that does not own these types of securities.

     If interest rates fall, the principal on debt securities held by the Fund may be paid earlier than expected. If this happens, the proceeds from a prepaid security would likely be reinvested by the Fund in securities bearing the new, lower interest rates, resulting in a possible decline in the Fund’s income and distributions to shareholders. Mortgage-related securities are especially sensitive to prepayment risk because borrowers often refinance their mortgages when interest rates drop.

     Dollar roll transactions involve the risk that the market value and yield of the securities retained by the Fund may decline below the price of the mortgage-related securities sold by the Fund that it is obligated to repurchase. Also, in the event the buyer of mortgage-related files for bankruptcy or becomes insolvent, the Fund’s use of the proceeds from the sale may be restricted pending a decision whether the Fund is obligated to repurchase mortgage-related securities.

     Reverse repurchase agreements involve the risk that the market value of securities to be repurchased may decline below the repurchase price, or that the other party may default on its obligation, resulting in the Fund being delayed or prevented from completing the transaction. In the event the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, the Fund’s use of the proceeds from the sale of the securities may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s repurchase obligation.

     The prices of debt securities tend to fall as interest rates rise. For mortgage-related securities, if interest rates rise, borrowers may prepay mortgages more slowly than originally expected. This may further reduce the market value of the securities and lengthen their durations.

About indexes used in this report

The Barclays Capital U.S. Government/ Mortgage Index is generally representative of U.S. government treasury securities and agency mortgage-backed securities.

     The Barclays Capital U.S. Aggregate Index is an unmanaged index considered representative of the U.S. investment-grade, fixed-rate bond market.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco Van Kampen V.I. Government Fund

Schedule of Investments

December 31, 2010

					Par
				Maturity	Amount
	Coupon			Date	(000)		Value
Mortgage Backed Securities–46.7%
Federal Home Loan Mortgage Corp., January(a)		4.500	%	TBA	$	8,350	$	8,558,750
Federal Home Loan Mortgage Corp., January(a)		6.000	%	TBA		285		308,735
Federal Home Loan Mortgage Corp.		4.500	%	01/01/40		5,123		5,272,436
Federal Home Loan Mortgage Corp.		5.000	%	01/01/37 to 01/01/40		6,131		6,471,272
Federal Home Loan Mortgage Corp.		5.500	%	11/01/39		1,278		1,367,967
Federal Home Loan Mortgage Corp.(a)		5.500	%	05/01/38		164		174,547
Federal Home Loan Mortgage Corp.		6.000	%	06/01/29 to 07/01/38		5,037		5,463,182
Federal Home Loan Mortgage Corp.		6.500	%	06/01/29 to 12/01/35		2,413		2,718,530
Federal Home Loan Mortgage Corp.(a)		6.500	%	12/01/33		6,086		6,844,559
Federal Home Loan Mortgage Corp.		7.500	%	05/01/35		254		290,966
Federal Home Loan Mortgage Corp.		8.000	%	08/01/32		134		157,021
Federal Home Loan Mortgage Corp.		8.500	%	08/01/31		159		189,717
Federal National Mortgage Association, January(a)		3.500	%	TBA		3,800		3,827,314
Federal National Mortgage Association, January(a)		4.000	%	TBA		15,820		15,875,196
Federal National Mortgage Association		4.500	%	11/01/24 to 08/01/39		11,052		11,480,665
Federal National Mortgage Association		5.000	%	06/01/23 to 03/01/40		28,117		29,714,603
Federal National Mortgage Association		5.500	%	04/01/35 to 08/01/38		22,407		24,072,144
Federal National Mortgage Association		6.000	%	01/01/14 to 10/01/38		9,810		10,729,150
Federal National Mortgage Association		6.500	%	04/01/11 to 04/01/38		3,508		3,941,932
Federal National Mortgage Association		7.000	%	06/01/11 to 06/01/32		38		42,843
Federal National Mortgage Association		7.500	%	08/01/37		439		503,812
Federal National Mortgage Association		8.000	%	04/01/33		328		378,730
Federal National Mortgage Association		8.500	%	10/01/32		306		355,521
Government National Mortgage Association		6.500	%	05/15/23 to 03/15/29		39		44,058
Government National Mortgage Association		7.000	%	04/15/23 to 11/15/27		60		68,274
Government National Mortgage Association		8.000	%	05/15/17 to 01/15/23		14		16,845
Total Mortgage Backed Securities								138,868,769
Collateralized Mortgage Obligations–30.2%
FDIC Structured Sale Guaranteed Notes(b)(c)		0.811	%	02/25/48		1,562		1,565,673
Federal Home Loan Mortgage Corp. (REMIC)(b)		0.560	%	03/15/36		3,172		3,179,583
Federal Home Loan Mortgage Corp. (REMIC)(b)		0.660	%	04/15/28 to 06/15/37		5,168		5,190,637
Federal Home Loan Mortgage Corp. (REMIC)		0.850	%	03/15/13		5,269		5,270,622
Federal Home Loan Mortgage Corp. (REMIC)		3.750	%	10/15/18		1,171		1,219,337
Federal Home Loan Mortgage Corp. (REMIC)		3.770	%	09/15/17		1,605		1,654,586
Federal Home Loan Mortgage Corp. (REMIC)		3.835	%	09/15/17		2,153		2,220,895
Federal Home Loan Mortgage Corp. (REMIC)		4.160	%	07/15/17		1,862		1,920,537
Federal Home Loan Mortgage Corp. (REMIC)		4.250	%	01/15/19		1,868		1,956,827
Federal Home Loan Mortgage Corp. (REMIC)		4.380	%	05/15/17		1,616		1,668,070
Federal Home Loan Mortgage Corp. (REMIC)		4.500	%	06/15/19 to 01/15/25		4,127		4,296,285
Federal Home Loan Mortgage Corp. (REMIC)		4.750	%	07/15/14		800		819,595
Federal Home Loan Mortgage Corp. (REMIC)		5.500	%	02/15/33		709		732,943
Federal Home Loan Mortgage Corp. (REMIC)		5.750	%	05/15/36		1,875		2,004,660

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Government Fund

					Par
				Maturity	Amount
	Coupon			Date	(000)		Value
Collateralized Mortgage Obligations–(continued)
Federal National Mortgage Association (REMIC)(b)		0.561	%	05/25/36	$	3,020	$	3,025,879
Federal National Mortgage Association (REMIC)		3.000	%	07/25/22		601		613,682
Federal National Mortgage Association (REMIC)		4.500	%	07/25/19		1,912		2,012,026
Federal National Mortgage Association (REMIC)		5.750	%	10/25/35		1,708		1,896,313
Federal National Mortgage Association (REMIC)		6.500	%	01/25/30 to 03/25/32		4,468		4,976,767
Federal National Mortgage Association (REMIC)		7.000	%	09/18/27		1,205		1,360,016
Government National Mortgage Association		4.000	%	11/16/33 to 02/20/38		2,841		2,987,511
Government National Mortgage Association		4.500	%	01/16/31 to 08/20/35		25,793		27,384,847
Government National Mortgage Association		4.750	%	09/20/32		2,877		3,029,782
Government National Mortgage Association		5.000	%	08/16/35		1,424		1,499,978
Government National Mortgage Association(b)		5.769	%	08/20/34		938		1,027,276
La Hipotecaria SA (Panama)(b)(c)		3.750	%	10/15/28		6,099		6,190,589
Total Collateralized Mortgage Obligations								89,704,916
United States Treasury Obligations–14.6%
United States Treasury Bonds		4.250	%	05/15/39		1,185		1,166,855
United States Treasury Bonds		4.375	%	11/15/39		3,000		3,015,000
United States Treasury Bonds		4.625	%	02/15/40		3,700		3,874,594
United States Treasury Bonds		5.375	%	02/15/31		3,800		4,433,531
United States Treasury Bonds		6.875	%	08/15/25		1,400		1,870,313
United States Treasury Bonds		7.500	%	11/15/24		8,270		11,580,584
United States Treasury Bonds(d)		7.875	%	02/15/21		1,100		1,533,984
United States Treasury Notes		0.500	%	11/15/13		2,000		1,974,063
United States Treasury Notes		2.125	%	11/30/14		150		153,633
United States Treasury Notes		2.250	%	01/31/15		3,500		3,591,328
United States Treasury Notes		2.375	%	10/31/14 to 02/28/2015		1,050		1,083,867
United States Treasury Notes		3.500	%	05/15/20		6,150		6,298,945
United States Treasury Notes		3.625	%	02/15/20		2,729		2,831,764
Total United States Treasury Obligations								43,408,461
United States Government Agency Obligations–9.1%
Federal Agircultural Mortgage Corp.		1.250	%	12/06/13		2,000		1,983,906
Federal Home Loan Banks		1.875	%	06/21/13		12,500		12,800,174
Federal Home Loan Banks		3.625	%	10/18/13		3,900		4,174,447
Federal Home Loan Mortgage Corp.		0.375	%	11/30/12		1,000		994,489
Federal National Mortgage Association		5.375	%	06/12/17		480		552,261
Financing Corp.		9.650	%	11/02/18		1,985		2,847,712
Financing Corp.		9.800	%	04/06/18		700		998,018
Tennessee Valley Authority, Ser D		4.875	%	12/15/16		2,420		2,709,808
Total United States Government Agency Obligations								27,060,815
Agency Bonds–7.0%
Diversified Banks–2.4%
GMAC, Inc.		2.200	%	12/19/12		4,700		4,833,059
US Central Federal Credit Union		1.900	%	10/19/12		2,260		2,307,126
								7,140,185

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Government Fund

					Par
				Maturity	Amount
	Coupon			Date	(000)		Value
Industrial Conglomerates–1.0%
General Electric Capital Corp.		2.625	%	12/28/12	$	2,800	$	2,903,600
Other Diversified Financial Services–3.6%
Citibank NA		1.750	%	12/28/12		9,000		9,183,876
Private Export Funding Corp.		4.300	%	12/15/21		1,540		1,589,552
								10,773,428
Total Agency Bonds								20,817,213
Adjustable Rate Mortgage Backed Securities–1.1%
Federal Home Loan Mortgage Corp.(b)		5.519	%	01/01/38		500		530,381
Federal Home Loan Mortgage Corp.(b)		5.932	%	10/01/36		874		923,649
Federal National Mortgage Association(b)		2.548	%	05/01/35		1,338		1,398,375
Federal National Mortgage Association(b)		5.736	%	03/01/38		307		325,769
Total Adjustable Rate Mortgage Backed Securities								3,178,174
Total Long-Term Investments (Cost $318,316,643)								323,038,348
Money Market Funds–0.9%
Government & Agency Portfolio, Institutional Class (2,552,526 Common Shares)(e) (Cost $2,552,526)								2,552,526
TOTAL INVESTMENTS–109.6% (Cost $320,869,169)								325,590,874
LIABILITIES IN EXCESS OF OTHER ASSETS–(9.6%)								(28,399,263	)
NET ASSETS–100.0%							$	297,191,611

Percentages are calculated as a percentage of net assets.

Investment Abbreviations:

REMICs	– Real Estate Mortgage Investment Conduits
TBA	– To Be Announced

Notes to Schedule of Investments:

(a)	Security purchased on a when-issued, delayed delivery or forward commitment basis.
(b)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2010.
(c)	144A-Private Placement security which is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. This security may only be resold in transactions exempt from registration which are normally those transactions with qualified institutional buyers.
(d)	All or a portion of this security has been physically segregated in connection with open futures contracts.
(e)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Government Fund

Futures Contracts Outstanding as of December 31, 2010:
			Unrealized
	Number of		Appreciation
	Contracts		(Depreciation)
Long Contracts:
U.S. Treasury Bonds Ultra Long Futures, March 2011 (Current Notional Value of $127,094 per contract)		21	$	20,394
U.S. Treasury Notes 5-Year Futures, March 2011 (Current Notional Value of $117,719 per contract)		341		(548,507	)
Total Long Contracts		362		(528,113	)
Short Contracts:
U.S. Treasury Bonds 30-Year Futures, March 2011 (Current Notional Value of $122,125 per contract)		62		202,182
U.S. Treasury Notes 10-Year Futures, March 2011 (Current Notional Value of $120,438 per contract)		22		(4,579	)
U.S. Treasury Notes 2-Year Futures, March 2011 (Current Notional Value of $218,906 per contract)		118		45,847
Total Short Contracts		202		243,450
Total Futures Contracts		564	$	(284,663	)

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Government Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $318,316,643)	$	323,038,348
Investments in affiliated money market funds, at value and cost		2,552,526
Cash		33,922
Receivables:
Investments sold		6,793,575
Interest		1,270,375
Fund shares sold		245,026
Principal paydowns		39,785
Variation margin on futures contracts		32,250
Dividends		194
Other		13,611
Total assets		334,019,612
Liabilities:
Payables:
Investments purchased		35,783,987
Distributor and affiliates		636,571
Fund shares repurchased		321,086
Trustees’ deferred compensation and retirement plans		2,709
Accrued expenses		83,648
Total liabilities		36,828,001
Net assets	$	297,191,611
Net assets consist of:
Capital (par value of $0.001 per share with an unlimited number of shares authorized)	$	297,836,564
Accumulated undistributed net investment income		7,854,707
Net unrealized appreciation		4,437,042
Accumulated net realized gain (loss)		(12,936,702	)
Net assets	$	297,191,611
Net asset value, offering price and redemption price per share:
Series I shares (based on net assets of $31,111,257 and 3,378,647 shares of beneficial interest issued and outstanding)	$	9.21
Series II shares (based on net assets of $266,080,354 and 28,954,280 shares of beneficial interest issued and outstanding)	$	9.19

Statement of Operations

For the year ended December 31, 2010

Investment income:
Interest	$	9,711,549
Dividends from affiliated money market funds		3,423
Total investment income		9,714,972
Expenses:
Investment advisory fee		1,559,968
Distribution fees — Series II		698,822
Administrative services fees		534,183
Custodian fees		36,705
Professional fees		31,751
Trustees’ and officers’ fees and benefits		25,376
Transfer agent fees		18,627
Other		27,120
Total expenses		2,932,552
Expense reduction		364,858
Net expenses		2,567,694
Net investment income		7,147,278
Realized and unrealized gain (loss):
Realized gain (loss):
Investments		5,185,877
Futures contracts		1,690,933
Swap contracts		(4,581,402	)
Net realized gain		2,295,408
Unrealized appreciation (depreciation):
Beginning of the period		(1,193,281	)
End of the period:
Investments		4,721,705
Futures contracts		(284,663	)
		4,437,042
Net unrealized appreciation during the period		5,630,323
Net realized and unrealized gain		7,925,731
Net increase in net assets from operations	$	15,073,009

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Government Fund

Statements of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
From investment activities:
Operations:
Net investment income	$	7,147,278		$	6,415,830
Net realized gain		2,295,408			12,018,216
Net unrealized appreciation (depreciation) during the period		5,630,323			(15,898,968	)
Change in net assets from operations		15,073,009			2,535,078
Distributions from net investment income:
Series I shares		(67,352	)		(2,682,417	)
Series II shares		(590,082	)		(15,211,001	)
Total distributions		(657,434	)		(17,893,418	)
Net change in net assets from investment activities		14,415,575			(15,358,340	)
From capital transactions:
Proceeds from shares sold		46,997,786			122,570,783
Net asset value of shares issued through dividend reinvestment		657,434			17,893,418
Cost of shares repurchased		(75,254,872	)		(93,695,171	)
Net change in net assets from capital transactions		(27,599,652	)		46,769,030
Total increase (decrease) in net assets		(13,184,077	)		31,410,690
Net assets:
Beginning of the period		310,375,688			278,964,998
End of the period (including accumulated undistributed net investment income (loss) of $7,854,707 and $(215,189), respectively)	$	297,191,611		$	310,375,688

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Government Fund

Financial Highlights

The following schedules present financial highlights for one share of the Fund outstanding throughout the periods indicated.

	Series I sharesˆ
	Years Ended December 31,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	8.77		$	9.28		$	9.52		$	9.30		$	9.42
Net investment income(a)		0.23			0.22			0.35			0.45			0.44
Net realized and unrealized gain (loss)		0.23			(0.13	)		(0.18	)		0.21			(0.14	)
Total from investment operations		0.46			0.09			0.17			0.66			0.30
Less distributions from net investment income		0.02			0.60			0.41			0.44			0.42
Net asset value, end of the period	$	9.21		$	8.77		$	9.28		$	9.52		$	9.30
Total return*		5.23	%(b)		0.98	%		1.81	%		7.33	%		3.34	%
Net assets at end of the period (in millions)	$	31.1		$	34.7		$	51.4		$	55.0		$	57.5
Ratio of expenses to average net assets*		0.60	%(c)		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assets*		2.52	%(c)		2.45	%		3.80	%		4.91	%		4.84	%
Portfolio turnover(d)		285	%		407	%		411	%		324	%		242	%
* If certain expenses had not been assumed by the adviser, total returns would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		0.72	%(c)		0.61	%		0.60	%		0.62	%		0.65	%
Ratio of net investment income to average net assets		2.40	%(c)		2.44	%		3.80	%		4.90	%		4.79	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Ratios are annualized and based on average daily net assets (000’s omitted) of $32,475.
(d)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
ˆ	On June 1, 2010, the Class I shares of the predecessor fund were reorganized into Series I shares of the Fund.

	Series II sharesˆ
	Years Ended December 31,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	8.78		$	9.26		$	9.51		$	9.30		$	9.42
Net investment income(a)		0.21			0.20			0.32			0.43			0.42
Net realized and unrealized gain (loss)		0.22			(0.12	)		(0.18	)		0.20			(0.14	)
Total from investment operations		0.43			0.08			0.14			0.63			0.28
Less distributions from net investment income		0.02			0.56			0.39			0.42			0.40
Net asset value, end of the period	$	9.19		$	8.78		$	9.26		$	9.51		$	9.30
Total return*		4.88	%(b)		0.86	%(c)		1.51	%(c)		7.02	%(c)		3.11	%(c)
Net assets at end of the period (in millions)	$	266.1		$	275.7		$	227.6		$	223.4		$	147.2
Ratio of expenses to average net assets*		0.85	%(d)		0.85	%		0.85	%		0.85	%		0.85	%
Ratio of net investment income to average net assets*		2.27	%(d)		2.19	%		3.50	%		4.63	%		4.62	%
Portfolio turnover(e)		285	%		407	%		411	%		324	%		242	%
* If certain expenses had not been assumed by the adviser, total returns would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		0.97	%(d)		0.86	%		0.85	%		0.87	%		0.90	%
Ratio of net investment income to average net assets		2.15	%(d)		2.18	%		3.50	%		4.62	%		4.57	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	These returns include combined Rule 12b-1 fees and service fees of up to 0.25%.
(d)	Ratios are annualized and based on average daily net assets (000’s omitted) of $279,529.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
ˆ	On June 1, 2010, the Class II shares of the predecessor fund were reorganized into Series II shares of the Fund.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Government Fund

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen V.I. Government Fund (the “Fund”) is a series portfolio of the AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), a Delaware statutory trust, and is registered as a diversified, open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust consists of forty-one separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as Van Kampen Life Investment Trust Government Portfolio (the “Acquired Fund”), an investment portfolio of Van Kampen Life Investment Trust. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class I and Class II shares received Series I and Series II shares, respectively, of the Fund.

  Information for the Acquired Fund’s Class I and Class II shares prior to the Reorganization are included with Series I and Series II shares, respectively, of the Fund throughout this report.

  The Fund’s investment objective is to seek to provide investors with high current return consistent with preservation of capital.

  The Fund currently offers two classes of shares, Series I and Series II shares, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.

Invesco Van Kampen V.I. Government Fund

	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Other Risks — The Funds may invest in obligations issued by agencies and instrumentalities of the U.S. Government that may vary in the level of support they receive from the government. The government may choose not to provide financial support to government sponsored agencies or instrumentalities if it is not legally obligated to do so. In this case, if the issuer defaulted, the underlying fund holding securities of such issuer might not be able to recover its investment from the U.S. Government. Many securities purchased by the Fund are not guaranteed by the U.S. Government.
J.	Swap Agreements — The Fund may enter into various swap transactions, including interest rate, total return, index, currency exchange rate and credit default swap contracts (“CDS”) for investment purposes or to manage interest rate, currency or credit risk.
	Interest rate, total return, index, and currency exchange rate swap agreements are two-party contracts entered into primarily to exchange the returns (or differentials in rates of returns) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or “swapped” between the parties are calculated with respect to a notional amount, i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate or return of an underlying asset, in a particular foreign currency, or in a “basket” of securities representing a particular index.

Invesco Van Kampen V.I. Government Fund

	A CDS is an agreement between two parties (“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.
	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.
	Changes in the value of swap agreements are recognized as unrealized gains (losses) in the Statement of Operations by “marking to market” on a daily basis to reflect the value of the swap agreement at the end of each trading day. Payments received or paid at the beginning of the agreement are reflected as such on the Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Statement of Operations. The Fund segregates liquid securities having a value at least equal to the amount of the potential obligation of a Fund under any swap transaction. 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 posting of collateral by the counterparty to cover the Fund’s exposure to the counterparty. 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.
K.	Dollar Roll and Forward Commitment Transactions — The Fund may engage in dollar roll and forward commitment transactions with respect to mortgage-backed securities issued by GNMA, FNMA and FHLMC. These transactions are often conducted on a to be announced (“TBA”) basis. In a TBA mortgage-backed transaction, the seller does not specify the particular securities to be delivered. Rather, a Fund agrees to accept any security that meets specified terms, such as an agreed upon issuer, coupon rate and terms of the underlying mortgages. TBA mortgage-backed transactions generally settle once a month on a specific date.
	In a dollar roll transaction, the Fund sells a mortgage-backed security held in the Fund to a financial institution such as a bank or broker-dealer, and simultaneously agrees to purchase a substantially similar security (same type, coupon and maturity) from the institution at an agreed upon price and future date. The mortgage-backed securities to be purchased will bear the same coupon as those sold, but generally will be collateralized by different pools of mortgages with different prepayment histories. Based on the typical structure of dollar roll transactions by the Fund, the dollar roll transactions are accounted for as financing transactions in which the Fund receives compensation as either a “fee” or a “drop”. “Fee” income which is agreed upon amongst the parties at the commencement of the dollar roll and the “drop” which is the difference between the selling price and the repurchase price of the mortgage-backed securities are amortized to income. During the period between the sale and purchase settlement dates, the Fund will not be entitled to receive interest and principal payments on securities purchased and not yet settled. Proceeds of the sale may be invested in short-term instruments, and the income from these investments, together with any additional fee income received on the sale, could generate income for the Fund exceeding the yield on the security sold. Dollar roll transactions are considered borrowings under the 1940 Act.
	Forward commitment transactions involve commitments by the Fund to acquire or sell TBA mortgage-backed securities from/to a financial institution, such as a bank or broker-dealer at a specified future date and amount. The TBA mortgage-backed security is marked to market until settlement and the unrealized appreciation or depreciation is recorded in the statement of operations.
	At the time the Fund enters into the dollar roll or forward commitment transaction, mortgage-backed securities or other liquid assets held by the Fund having a dollar value equal to the purchase price or in an amount sufficient to honor the forward commitment will be segregated.
	Dollar roll transactions involve the risk that the market value of the securities retained by the Fund may decline below the price of the securities that the Fund has sold but is obligated to purchase under the agreement. In the event that the buyer of securities in a dollar roll transaction files for bankruptcy or becomes insolvent, the Fund’s use of the proceeds from the sale of the securities may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s obligation to purchase the securities. The return earned by the Fund with the proceeds of the dollar roll transaction may not exceed the return on the securities sold.
	Forward commitment transactions involve the risk that a counter-party to the transaction may fail to complete the transaction. If this occurs, the Fund may lose the opportunity to purchase or sell the security at the agreed upon price. Settlement dates of forward commitment transactions may be a month or more after entering into these transactions and as a result the market values of the securities may vary from the purchase or sale prices. Therefore, forward commitment transactions may increase the Fund’s overall interest rate exposure.

Invesco Van Kampen V.I. Government Fund

L.

Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities.

M.

Collateral — To the extent the Fund has pledged or segregated a security as collateral and that security is subsequently sold, it is the Fund’s practice to replace such collateral no later than the next business day.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $500 million		0	.50%
Next $500 million		0	.45%
Over $1 billion		0	.40%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee of $653,673 to Van Kampen Asset Management (“Van Kampen”) based on the annual rate above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”), the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed, through at least June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 0.60% and Series II shares to 0.85%, of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Prior to the Reorganization, Van Kampen had voluntarily agreed to waive fees and/or reimburse expenses of Class I and Class II shares. Van Kampen did not waive fees and/or reimburse expenses under this agreement.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the period ended December 31, 2010, the Adviser waived advisory fees of $364,858 under this limitation.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services to the fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreements, for the period ended December 31, 2010, Invesco was paid $47,816 for accounting and fund administrative services and reimbursed $453,173 for services provided by insurance companies. Prior to the Reorganization, under separate accounting services and chief compliance officer (“CCO”) employment agreements, Van Kampen Investments Inc. (“VKII”) provided accounting services and the CCO provided compliance services to the Acquired Fund. Pursuant to such agreements, the Acquired Fund paid $12,616 to VKII.

  Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian and fund accountant and provides certain administrative services to the Fund.

Invesco Van Kampen V.I. Government Fund

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. Prior to the Reorganization, the Acquired Fund paid $8,024 to Van Kampen Investor Services Inc., which served as the Acquired Fund’s transfer agent. For the year ended December 31, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. Prior to the Reorganization, the Acquired Fund had entered into master distribution agreements with Van Kampen Funds Inc. (“VKFI”) to serve as the distributor for Class II shares. Pursuant to such agreements, the Acquired Fund paid $292,458 to VKFI. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1			Level 2		Level 3		Total
Investments in an Asset Position
Mortgaged Backed Securities	$	—		$	138,868,769	$	—	$	138,868,769
Collateralized Mortgage Obligations		—			89,704,916		—		89,704,916
U.S. Treasury Obligations		—			43,408,461		—		43,408,461
U.S. Government Agency Obligations		—			27,060,815		—		27,060,815
Agency Bonds		—			20,817,213		—		20,817,213
Adjustable Rate Mortgage Backed Securities		—			3,178,174		—		3,178,174
Equity Securities		2,552,526			—		—		2,552,526
Futures Contracts		268,423			—		—		268,423
Total Investments in an Asset Position	$	2,820,949		$	323,038,348	$	—	$	325,859,297
Investments in a Liability Position
Futures Contracts		(553,086	)		—		—		(553,086	)
Total Investment in a Liability Position	$	(553,086	)	$	—	$	—	$	(553,086	)

NOTE 4—Derivative Investments

The Fund has implemented the required disclosures about derivative instruments and hedging activities in accordance with GAAP. This disclosure is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

Invesco Van Kampen V.I. Government Fund

Value of Derivative Instruments at Period-End

The table below summarizes the value of the Fund’s derivative instruments, detailed by primary risk exposure, held as of December 31, 2010:

	Value
Risk Exposure/ Derivative Type	Assets		Liabilities
Interest rate risk/futures contracts(a)	$	268,423	$	(553,086	)

^(a) Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported with in the December 31, 2010 Statement of Assets and Liabilities.

Effect of Derivative Instruments for the year ended December 31, 2010

The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on Statement of Operations
	Futures			Swap
	Contracts*			Agreements*
Realized Gain (Loss)
Interest rate risk	$	1,690,933		$	(4,581,402	)
Change in Unrealized Appreciation (Depreciation) Interest rate risk		(491,489	)		1,777,683
Total	$	1,199,444		$	(2,803,719	)

*  The average notional value of futures and swap agreements outstanding during the period was $106,139,134 and $61,909,478, respectively.

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  For the period June 1, 2010 to December 31, 2010, the Fund paid legal fees of $796 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. Prior to the Reorganization, the Acquired Fund recognized expense of $2,550 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom LLP, of which a director of the Acquired Fund was a partner of such firm and he and his law firm provided legal services as legal counsel to the Acquired 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. 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

Distributions to Shareholders:

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	657,434	$	17,893,418

Invesco Van Kampen V.I. Government Fund

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	8,536,343
Net unrealized appreciation — investments		3,065,735
Temporary book/tax differences		(2,709	)
Post-October deferrals		(991,982	)
Capital loss carryforward		(11,252,340	)
Shares of beneficial interest		297,836,564
Total net assets	$	297,191,611

  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 utilized $0 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	10,072,819
December 31, 2018		1,179,521
Total	$	11,252,340

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $16,859,637 and $61,253,506, respectively. During the same period, purchases and sales of U.S. Treasury obligations were $897,071,514 and $844,340,949. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	4,040,517
Aggregate unrealized (depreciation) of investment securities		(974,782	)
Net unrealized appreciation of investment securities	$	3,065,735
Cost of investments for tax purposes is $322,525,139.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of paydown: gains (losses), on December 31, 2010, undistributed net investment income (loss) was increased by $1,580,052, undistributed net realized gain (loss) was decreased by $1,584,726 and shares of beneficial interest increased by $4,674. This reclassification had no effect on the net assets of the Fund.

Invesco Van Kampen V.I. Government Fund

NOTE 10—Share Information

	Summary of Share Activity
	Years ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sales:
Series I		275,133		$	2,464,768			495,270		$	4,487,721
Series II		4,943,827			44,533,018			13,183,520			118,083,062
Total Sales		5,218,960			46,997,786			13,678,790			122,570,783
Dividend Reinvestment:
Series I		7,593			67,352			301,921			2,682,417
Series II		66,526			590,082			1,712,142			15,211,001
Total Dividend Reinvestment		74,119			657,434			2,014,063			17,893,418
Repurchases:
Series I		(856,483	)		(7,702,407	)		(2,383,350	)		(21,385,604	)
Series II		(7,462,485	)		(67,552,465	)		(8,057,502	)		(72,309,567	)
Total Repurchases		(8,318,968	)	$	(75,254,872	)		(10,440,852	)	$	(93,695,171	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 85% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund,Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

NOTE 11—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco V.I. Government Securities Fund (the “Acquiring Fund”) in exchange for shares of the Acquiring Fund. The Agreement requires approval of the Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

NOTE 12—Change in Independent Registered Public Accounting Firm (unaudited)

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Invesco Van Kampen V.I. Government Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco Van Kampen V.I. Government Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen V.I. Government Fund (formerly known as Van Kampen Life Investment Trust Government Portfolio; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 19, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco Van Kampen V.I. Government Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,004.36	$	3.03	$	1,022.18	$	3.06		0.60	%
Series II		1,000.00		1,002.18		4.29		1,020.92		4.33		0.85

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco Van Kampen V.I. Government 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
U.S. Treasury Obligations*	17%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco Van Kampen V.I. Government Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco Van Kampen V.I. Growth and Income Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VK-VIGRI-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the 12 months ended December 31, 2010, Invesco Van Kampen V.I. Growth and Income Fund underperformed the Russell 1000 Value Index. Because the Fund uses a bottom-up stock selection approach, stock selection in various sectors was the primary driver of the Fund’s relative performance.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	12.51	%
Series II Shares	12.19
Russell 1000 Value Index▼ (Broad Market/Style-Specific Index)	15.51

^▼ Lipper Inc.

How we invest

We call our investment philosophy “value with a catalyst.” We believe that undervalued companies which are experiencing positive changes (i.e., “catalysts”) have the potential to generate long-term stock price growth for shareholders. We generally seek to identify companies that are out of favor with investors, underearning relative to their potential and attractively valued. For these companies, we attempt to identify catalysts that may improve the financial results and/or correct the undervaluation. Examples of catalysts typically include improved operational efficiency, changing industry dynamics and/or a change in management.

     We initially identify potential investments through a series of quantitative screens including, but not limited to, return on capital and enterprise value to sales metrics. We then conduct fundamental research on the most attractive opportunities. The research process includes a thorough review of a company’s financial statements, an evaluation of its competitive position and stability and meetings with its executives. During the research process, we also value the company under various scenarios

to determine if the investment is an attractive opportunity relative to its risks. This also is where we typically identify the positive catalyst, a prerequisite for potential investment. Finally, we generally set a price target for a stock based on normalized earnings and historical valuation multiples.

     In short, our objective is to exploit negative sentiment toward a company’s stock by analyzing the company’s operations in the context of a cyclical environment and identifying one or more catalysts that may improve the company’s financial performance. Improved financial performance, in turn, has the potential to drive the company’s stock price higher.

     We typically sell an investment when it reaches our estimate of fair value or when we identify a more attractive investment opportunity.

Market conditions and your Fund

Equity markets were choppy during the fiscal year as investors weighed the competing issues of solid corporate profits and soft macroeconomic data. Corporate earnings were largely positive but often were overshadowed by concerns

about high unemployment, weak consumer spending, soft housing data and the possibility of additional U.S. Federal Reserve accommodation. After rising through April, major equity indexes sold off precipitously in May as the sovereign debt crisis unfolded in the eurozone while U.S. economic indicators remained weak, prompting fears of a “double-dip” recession. Uncertainty created by the debt crisis – combined with subdued employment, consumer spending and housing data – added to concerns that the recovery was slowing. Just as abruptly, however, the markets reversed course starting in September and rallied through the end of the year on modestly better economic news.

     Major equity indexes produced positive returns for the fiscal year, and all 10 sectors of the S&P 500 Index posted gains. More economically sensitive sectors such as consumer discretionary and industrials had the highest returns, while less economically sensitive sectors such as health care had some of the lowest returns.

     The Fund benefited from an overweight exposure to, and stock selection in, the consumer discretionary sector. The Fund’s overweight position in the sector was concentrated among media stocks, which benefited from an increase in advertising revenue during the reporting period. Viacom, a top Fund holding, performed well throughout the reporting period. The company reduced costs, was disciplined with its capital and grew advertising revenue.

     Stock selection in the telecommunication services sector also aided the Fund’s performance relative to its style-specific index. Vodafone helped performance. The company owns approximately 45% of Verizon Communications. Verizon has been able to grow its subscriber base,

Portfolio Composition

By sector

Financials	21.2	%
Energy	14.3
Consumer Discretionary	11.8
Consumer Staples	10.6
Industrials	10.3
Information Technology	10.1
Health Care	9.5
Utilities	3.9
Telecommunication Services	2.8
Materials	2.2
Money Market Funds
Plus Other Assets Less Liabilities	3.3

Top 10 Equity Holdings*

1.	JPMorgan Chase & Co.	4.6	%
2.	General Electric Co.	3.8
3.	Marsh & McLennan Cos., Inc.	3.3
4.	Viacom, Inc.- Class B	2.9
5.	Occidental Petroleum Corp.	2.5
6.	Anadarko Petroleum Corp.	2.3
7.	eBay, Inc.	2.2
8.	American Electric Power Co., Inc.	2.0
9.	Royal Dutch Shell PLC	2.0
10.	Tyco International Ltd.	2.0

Total Net Assets	$1.9 billion
Total Number of Holdings*		78

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.

Invesco Van Kampen V.I. Growth and Income Fund

and investors are anticipating the introduction of the iPhone onto the network.

     Stock selection in the health care sector contributed to the Fund’s relative performance. The Fund owned Genzyme, a biotechnology company that received a takeover offer from Sanofi-aventis (not a Fund holding). As a result, Genzyme rose significantly on the news, and we sold our position.

     Offsetting these positive results was the negative impact of the information technology and financials sectors.

     The Fund was overweight in technology stocks throughout the reporting period, and most of our exposure was to hardware and equipment and software services stocks. Stock selection in hardware and equipment detracted the most from relative performance. Fund holding Hewlett Packard sold off on the news its chief executive officer was leaving the company due to expense-related improprieties. At the end of the reporting period, the Fund continued to own the stock.

     Although the Fund was underweight in the financials sector relative to its style-specific index during the reporting period, we cautiously increased our exposure to some banks and capital markets companies that we believed had improved their balance sheets and were better capitalized. Also, real estate was a strong performing asset class during the reporting period. The Fund had no exposure to this asset class, however, and therefore did not benefit from real estate’s strong performance.

     Equity markets experienced a strong recovery during the period covered by this report. We believe that the market volatility that occurred during 2010 will continue to create opportunities to invest in companies with attractive valuations and strong fundamentals. We believe that ultimately those valuations and fundamentals may be reflected in those companies’ stock prices.

     As always, we would like to caution investors against making investment decisions based on short-term performance. We recommend that you consult your financial adviser to discuss your individual financial program.

     Thank you for your investment in Invesco Van Kampen V.I. Growth and Income Fund and for sharing our long-term investment horizon.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Thomas Bastian
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco Van Kampen V.I. Growth and Income Fund. He joined Invesco in 2010. Mr. Bastian earned a B.A. in accounting from St. John’s University and an M.B.A. in finance from the University of Michigan.

Mark Laskin
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Growth and Income Fund. He joined Invesco in 2010. Mr. Laskin earned a B.A. in history from Swarthmore College and an M.B.A. and an M.A. from the Wharton School and the Lauder Institute, respectively, of the University of Pennsylvania.

Mary Jayne Maly
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Growth and Income Fund. She joined Invesco in 2010. Ms. Maly earned a B.A. from the University of Pittsburgh and an M.B.A. from the American Graduate School of International Management.

Sergio Marcheli
Portfolio manager, is manager of Invesco Van Kampen V.I. Growth and Income Fund. He joined Invesco in 2010. Mr. Marcheli earned a B.B.A. from the University of Houston and an M.B.A. from the University of St. Thomas.

James Roeder
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Growth and Income Fund. He joined Invesco in 2010. Mr. Roeder earned a B.S. in accounting from Clemson University and an M.B.A. in economics and finance from the University of Chicago Graduate School of Business. He is also a Certified Public Accountant.

Invesco Van Kampen V.I. Growth and Income Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Fund data from 12/23/96, index data from 12/31/96

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (12/23/96)			7.99	%
	10	Years	3.96
	5	Years	2.59
	1	Year	12.51
Series II Shares
Inception (9/18/00)			4.08	%
	10	Years	3.69
	5	Years	2.33
	1	Year	12.19

Effective June 1, 2010, Class I and Class II shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Series I and Series II shares, respectively, of Invesco Van Kampen V.I. Growth and Income Fund. Returns shown above for Series I and Series II shares are blended returns of the predecessor fund and Invesco Van Kampen V.I. Growth and Income Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.62% and 0.87%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.88% and 1.13%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco Van Kampen V.I. Growth and Income Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco Van Kampen V.I. Growth and Income Fund

Invesco Van Kampen V.I. Growth and Income Fund’s investment objective is to seek long-term growth of capital and income.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

Market risk is the possibility that the market values of securities owned by the Fund will decline. Market risk may affect a single issuer, industry, sector of the economy or the market as a whole. Investments in equity securities generally are affected by changes in the stock markets, which fluctuate substantially over time, sometimes suddenly and sharply. The ability of the Fund’s equity securities holdings to generate income is dependent on the earnings and the continuing declaration of dividends by the issuers of such securities. The values of income-producing equity securities may or may not move in tandem with overall changes in the stock market. The Fund’s investments in fixed income or debt securities generally are affected by changes in interest rates and the creditworthiness of the issuer. The market prices of such securities tend to fall as interest rates rise, and such declines may be greater among securities with longer maturities. The values of convertible securities tend to decline as interest rates rise and, because of the conversion feature, tend to vary with fluctuations in the market value of the underlying equity security.

     The risks of investing in securities of foreign issuers can include fluctuations in foreign currencies, foreign currency exchange controls, political and economic instability, differences in financial reporting, differences in securities regulation and trading, and foreign taxation issues.

     Investing in real estate investment trusts (REITs) makes the Fund more susceptible to risks associated with the ownership of real estate and with the real estate industry in general and may involve duplication of management fees and other expenses. REITs may be less diversified than other pools of securities, may have lower trading volumes and may be subject to more abrupt or erratic price movements than the overall securities markets.

     Risks of derivatives include the possible imperfect correlation between the value of the instruments and the underlying assets; risks of default by the other party to the transaction; risks that the transactions may result in losses that partially or completely offset gains in portfolio positions; and risks that the transactions may not be liquid. Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss.

About indexes used in this report

The Russell 1000^® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     CPA^® and Certified Public Accountant^® are trademarks owned by the American Institute of Certified Public Accountants.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco Van Kampen V.I. Growth and Income Fund

Schedule of Investments

December 31, 2010

	Shares		Value
Common Stocks–96.7%
Air Freight & Logistics–0.5%
FedEx Corp.		105,218	$	9,786,326
Asset Management & Custody Banks–1.1%
State Street Corp.		439,202		20,352,621
Automobile Manufacturers–1.6%
Ford Motor Co.(a)		982,479		16,495,823
General Motors Co.(a)		375,163		13,828,508
				30,324,331
Cable & Satellite–3.1%
Comcast Corp., Class A		1,483,651		32,595,812
Time Warner Cable, Inc.		379,192		25,038,048
				57,633,860
Communications Equipment–1.0%
Cisco Systems, Inc.(a)		954,594		19,311,437
Computer Hardware–2.7%
Dell, Inc.(a)		1,636,052		22,168,505
Hewlett-Packard Co.		667,271		28,092,109
				50,260,614
Consumer Electronics–1.1%
Sony Corp.–ADR (Japan)		595,816		21,276,589
Data Processing & Outsourced Services–1.1%
Western Union Co.		1,077,569		20,010,456
Diversified Banks–1.6%
U.S. Bancorp		449,647		12,126,980
Wells Fargo & Co.		580,167		17,979,375
				30,106,355
Diversified Chemicals–1.8%
Dow Chemical Co.		503,470		17,188,466
PPG Industries, Inc.		205,650		17,288,995
				34,477,461
Diversified Support Services–0.5%
Cintas Corp.		357,095		9,984,376
Drug Retail–1.5%
Walgreen Co.		715,888		27,890,997
Electric Utilities–3.9%
American Electric Power Co., Inc.		1,041,011		37,455,576
Edison International		293,741		11,338,403
Entergy Corp.		159,011		11,262,749
FirstEnergy Corp.		349,975		12,956,074
				73,012,802
Food Distributors–0.9%
Sysco Corp.		583,602		17,157,899
Health Care Distributors–0.7%
Cardinal Health, Inc.		326,033		12,490,324
Health Care Equipment–1.2%
Covidien PLC (Ireland)		505,461		23,079,349
Home Improvement Retail–1.4%
Home Depot, Inc.		744,146		26,089,759
Household Products–1.9%
Procter & Gamble Co.		543,193		34,943,606
Human Resource & Employment Services–1.2%
Manpower, Inc.		201,500		12,646,140
Robert Half International, Inc.		311,915		9,544,599
				22,190,739
Hypermarkets & Super Centers–1.0%
Wal-Mart Stores, Inc.		340,805		18,379,614
Industrial Conglomerates–5.8%
General Electric Co.		3,916,686		71,636,187
Tyco International Ltd. (Switzerland)		891,117		36,927,888
				108,564,075
Industrial Machinery–1.7%
Dover Corp.		165,594		9,678,969
Ingersoll-Rand PLC (Ireland)		459,327		21,629,709
				31,308,678
Insurance Brokers–3.3%
Marsh & McLennan Cos., Inc.		2,245,290		61,386,229
Integrated Oil & Gas–8.1%
ConocoPhillips		216,166		14,720,905
Exxon Mobil Corp.		266,042		19,452,991
Hess Corp.		422,700		32,353,458
Occidental Petroleum Corp.		488,265		47,898,796
Royal Dutch Shell PLC–ADR (United Kingdom)		556,244		37,145,974
				151,572,124
Integrated Telecommunication Services–1.1%
Verizon Communications, Inc.		584,327		20,907,220
Internet Software & Services–3.4%
eBay, Inc.(a)		1,503,011		41,828,796
Yahoo!, Inc.(a)		1,274,654		21,197,496
				63,026,292

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Growth and Income Fund

	Shares		Value
Investment Banking & Brokerage–2.9%
Charles Schwab Corp.		1,599,837	$	27,373,211
LPL Investment Holdings, Inc.(a)		55,842		2,030,974
Morgan Stanley		909,097		24,736,529
				54,140,714
IT Consulting & Other Services–0.9%
Amdocs Ltd. (Guernsey)(a)		599,464		16,467,276
Life & Health Insurance–0.8%
Principal Financial Group, Inc.		487,004		15,856,850
Managed Health Care–1.8%
UnitedHealth Group, Inc.		942,718		34,041,547
Movies & Entertainment–4.6%
Time Warner, Inc.		1,021,065		32,847,661
Viacom, Inc., Class B		1,357,626		53,775,566
				86,623,227
Office Services & Supplies–0.6%
Avery Dennison Corp.		286,199		12,117,666
Oil & Gas Equipment & Services–2.0%
Cameron International Corp.(a)		140,587		7,131,979
Schlumberger Ltd. (Netherlands Antilles)		372,777		31,126,879
				38,258,858
Oil & Gas Exploration & Production–3.9%
Anadarko Petroleum Corp.		563,547		42,919,740
Devon Energy Corp.		251,953		19,780,830
Noble Energy, Inc.		117,451		10,110,182
				72,810,752
Oil & Gas Storage & Transportation–0.3%
Williams Cos., Inc.		231,544		5,723,768
Other Diversified Financial Services–7.8%
Bank of America Corp.		2,654,939		35,416,886
Citigroup, Inc.(a)		5,148,209		24,351,029
JPMorgan Chase & Co.		2,050,392		86,977,629
				146,745,544
Packaged Foods & Meats–2.6%
Kraft Foods, Inc., Class A		826,057		26,029,056
Unilever NV (Netherlands)		746,400		23,436,960
				49,466,016
Personal Products–1.5%
Avon Products, Inc.		982,285		28,545,202
Pharmaceuticals–5.8%
Abbott Laboratories		256,441		12,286,088
Bristol-Myers Squibb Co.		1,093,218		28,948,413
Merck & Co., Inc.		467,388		16,844,664
Pfizer, Inc.		1,876,991		32,866,112
Roche Holdings AG–ADR (Switzerland)		475,124		17,458,431
				108,403,708
Property & Casualty Insurance–0.7%
Chubb Corp.		234,964		14,013,253
Regional Banks–2.9%
BB&T Corp.		397,409		10,447,882
Fifth Third Bancorp		731,150		10,733,282
PNC Financial Services Group, Inc.		564,908		34,301,214
				55,482,378
Semiconductors–0.9%
Intel Corp.		817,309		17,188,008
Soft Drinks–1.2%
Coca-Cola Co.		213,375		14,033,674
Coca-Cola Enterprises, Inc.		360,297		9,018,234
				23,051,908
Specialty Chemicals–0.4%
LyondellBasell Industries NV, Class A (Netherlands)(a)		217,336		7,476,358
Systems Software–0.2%
Microsoft Corp.		166,845		4,658,312
Wireless Telecommunication Services–1.7%
Vodafone Group PLC–ADR (United Kingdom)		1,181,459		31,225,961
Total Common Stocks–96.7% (Cost $1,619,089,930)				1,817,821,439
Money Market Funds–4.0%
Liquid Assets Portfolio–Institutional Class(b)		37,360,235		37,360,235
Premier Portfolio–Institutional Class(b)		37,360,235		37,360,235
Total Money Market Funds–4.0% (Cost $74,720,470)				74,720,470
TOTAL INVESTMENTS–100.7% (Cost $1,693,810,400)				1,892,541,909
LIABILITIES IN EXCESS OF OTHER ASSETS–(0.7%)				(12,674,874	)
NET ASSETS–100.0%			$	1,879,867,035

Investment Abbreviation:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

Percentages are calculated as a percentage of net assets.

(a)	Non-income producing security.
(b)	The money market fund and the Fund are affiliated by having the same investment advisor.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Growth and Income Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $1,619,089,930)	$	1,817,821,439
Investment in affiliated money market funds, at value and cost		74,720,470
Receivables:
Dividends		2,476,325
Fund shares sold		565,683
Expense reimbursement from adviser		30,490
Other		3,841
Total assets		1,895,618,248
Liabilities:
Payables:
Fund shares repurchased		12,012,569
Distributor and affiliates		3,542,697
Trustees’ deferred compensation and retirement plans		10,366
Accrued expenses		185,581
Total liabilities		15,751,213
Net assets	$	1,879,867,035
Net assets consist of:
Capital (par value of $0.001 per share with an unlimited number of shares authorized)	$	1,768,047,228
Net unrealized appreciation		198,731,509
Accumulated undistributed net investment income		19,988,664
Accumulated net realized gain (loss)		(106,900,366	)
Net assets	$	1,879,867,035
Net asset value, offering price and redemption price per share:
Series I Shares (based on net assets of $154,488,757 and 8,397,205 shares of beneficial interest issued and outstanding)	$	18.40
Series II Shares (based on net assets of $1,725,378,278 and 93,947,482 shares of beneficial interest issued and outstanding)	$	18.37

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $495,942)	$	34,483,959
Dividends from affiliated money market funds		69,855
Interest		24,741
Total income		34,578,555
Expenses:
Investment advisory fee		9,618,095
Distribution fees — Series II		3,886,924
Administrative services fees		2,852,728
Trustees and officers’ fees and benefits		64,439
Custody		56,824
Professional fees		56,338
Transfer agent fees		27,605
Registration fees		150
Other		38,625
Total expenses		16,601,728
Expense reduction		2,323,699
Net expenses		14,278,029
Net investment income		20,300,526
Realized and unrealized gain (loss):
Net realized gain		91,837,578
Unrealized appreciation (depreciation):
Beginning of the period		102,462,825
End of the period		198,731,509
Net unrealized appreciation during the period		96,268,684
Net realized and unrealized gain		188,106,262
Net increase in net assets from operations	$	208,406,788

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Growth and Income Fund

Statements of Changes in Net Assets

	For the year ended			For the year ended
	December 31,			December 31,
	2010			2009
From investment activities:
Operations:
Net investment income	$	20,300,526		$	21,012,021
Net realized gain (loss)		91,837,578			(61,046,171	)
Net unrealized appreciation during the period		96,268,684			367,300,062
Change in net assets from operations		208,406,788			327,265,912
Distributions from net investment income:
Series I shares		(156,262	)		(5,735,264	)
Series II shares		(1,556,159	)		(46,515,143	)
Total distributions		(1,712,421	)		(52,250,407	)
Net change in net assets from investment activities		206,694,367			275,015,505
From capital transactions:
Proceeds from shares sold		191,122,516			128,402,609
Net assets value of shares issued through dividend reinvestment		1,712,421			52,250,407
Cost of shares repurchased		(188,006,478	)		(169,496,944	)
Net change in net assets from capital transactions		4,828,459			11,156,072
Total increase in net assets		211,522,826			286,171,577
Net assets:
Beginning of the period		1,668,344,209			1,382,172,632
End of the period (including accumulated undistributed net investment income of $19,988,664 and $1,401,168, respectively)	$	1,879,867,035		$	1,668,344,209

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Growth and Income Fund

Financial Highlights

The following schedules present financial highlights for one share of the Fund outstanding throughout the periods indicated.

	Series I Sharesˆ
	Year ended December 31,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	16.37		$	13.74		$	21.36		$	22.00		$	20.49
Net investment income(a)		0.24			0.24			0.36			0.39			0.38
Net realized and unrealized gain (loss)		1.81			2.98			(6.95	)		0.16			2.75
Total from investment operations		2.05			3.22			(6.59	)		0.55			3.13
Less:
Distributions from net investment income		0.02			0.59			0.38			0.36			0.25
Distributions from net realized gains		-0-			-0-			0.65			0.83			1.37
Total distributions		0.02			0.59			1.03			1.19			1.62
Net asset value, end of the period	$	18.40		$	16.37		$	13.74		$	21.36		$	22.00
Total return*		12.51	%(b)		24.37	%		(32.03	)%		2.80	%		16.23	%
Net assets at end of the period (in millions)	$	154.5		$	153.7		$	146.0		$	263.5		$	307.7
Ratio of expenses to average net assets*		0.61	%(d)		0.62	%		0.61	%		0.60	%		0.60	%
Ratio of net investment income to average net assets*		1.42	%(d)		1.72	%		2.06	%		1.80	%		1.85	%
Portfolio turnover(e)		30	%		55	%		50	%		28	%		28	%
* If certain expenses had not been assumed by the adviser, total returns would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		0.74	%(d)		N/A			N/A			N/A			N/A
Ratio of net investment income to average net assets		1.55	%(d)		N/A			N/A			N/A			N/A

	Series II Sharesˆ
	Year ended December 31,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	16.39		$	13.71		$	21.31		$	21.96		$	20.46
Net investment income(a)		0.20			0.20			0.32			0.34			0.32
Net realized and unrealized gain (loss)		1.80			2.99			(6.94	)		0.15			2.76
Total from investment operations		2.00			3.19			(6.62	)		0.49			3.08
Less:
Distributions from net investment income		0.02			0.51			0.33			0.31			0.21
Distributions from net realized gain		-0-			-0-			0.65			0.83			1.37
Total distributions		0.02			0.51			0.98			1.14			1.58
Net asset value, end of the period	$	18.37		$	16.39		$	13.71		$	21.31		$	21.96
Total return		12.19	%(b)		24.11	%(c)		(32.21	)%(c)		2.52	%(c)		15.97	%(c)
Net assets at end of the period (in millions)	$	1,725.4		$	1,514.7		$	1,236.2		$	1,843.7		$	1,661.7
Ratio of expenses to average net assets*		0.86	%(d)		0.87	%		0.86	%		0.85	%		0.85	%
Ratio of net investment income to average net assets*		1.17	%(d)		1.45	%		1.82	%		1.54	%		1.59	%
Portfolio turnover(e)		30	%		55	%		50	%		28	%		28	%
* If certain expenses had not been assumed by the adviser, total returns would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		0.99	%(d)		N/A			N/A			N/A			N/A
Ratio of net investment income to average net assets		1.30	%(d)		N/A			N/A			N/A			N/A

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed with connection with a variable product, which if included would reduce total returns.
(c)	These returns include combined Rule 12b-1 fees and services fees of up to 0.25%.
(d)	Ratios are annualized and based on average daily net assets (000’s omitted) of $149,783 and $1,554,770 for Series I and Series II shares, respectively.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
ˆ	On June 1, 2010, the Class I and Class II shares of the predecessor fund were reorganized into Series I and Series II shares, respectively of the Fund.

N/A=Not Applicable

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Growth and Income Fund

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen V.I. Growth and Income Fund (the “Fund”), is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as Van Kampen Life Investment Trust Growth and Income Portfolio (“the Acquired Fund”), an investment portfolio of Van Kampen Life Investment Trust. The Acquired Fund was reorganized on June 1, 2010 (“the Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class I and Class II shares received Series I and Series II shares, respectively of the Fund.

  Information for the Acquired Fund’s Class I and Class II shares prior to the Reorganization are included with Series I and Series II shares, respectively of the Fund throughout this report.

  The Fund’s investment objectives are both capital appreciation and income.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.

Invesco Van Kampen V.I. Growth and Income Fund

	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.

Invesco Van Kampen V.I. Growth and Income Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $500 million		0	.60%
Over $500 million		0	.55%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee of $4,000,003 to Van Kampen Asset Management (“Van Kampen”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed 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 Series I shares to 0.62% and Series II shares to 0.87% of average daily net assets, through at least June 30, 2012. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Prior to the Reorganization, Van Kampen had voluntarily agreed to waive fees and/or reimburse expenses of Class I and Class II shares. Van Kampen did not waive fees and/or reimburse expenses under this agreement.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.

  For the period ended December 31, 2010, the Adviser waived advisory fees of $2,323,699.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $220,432 for accounting and fund administrative services and reimbursed $2,490,210 for services provided by insurance companies. Prior to the Reorganization, under separate Accounting Services and Chief Compliance Officer (“CCO”) Employment agreements, Van Kampen Investments Inc. (“VKII”) provided accounting services and the CCO provided compliance services to the Acquired Fund. Pursuant to such agreements, the Acquired Fund paid $39,772 to VKII.

  Also, the Trust has entered into service agreements whereby State Street Bank & Trust Company (“SSB”) serves as custodian and fund accountant and provides certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. Prior to the Reorganization, the Acquired Fund paid $9,145 to Van Kampen Investor Services, Inc., which served as the Acquired Fund’s transfer agent. For the year ended December 31, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. Prior to the Reorganization, the Acquired Fund had entered into master distribution agreements with Van Kampen Funds Inc. (“VKFI”) to serve as the distributor for the Class II shares. Pursuant to such agreements, the Acquired Fund paid $1,609,660 to VKFI. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs

Invesco Van Kampen V.I. Growth and Income Fund

(Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	1,875,083,478	$	17,458,431	$	-0-	$	1,892,541,909

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $1,732 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. Prior to the Reorganization, the Acquired Fund recognized expense of $7,320 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom LLP, of which a director of the Acquired Fund was a partner of such firm and he and his law firm provided legal services as legal counsel to the Acquired Fund.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	1,712,421	$	52,250,407

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	20,044,581
Net unrealized appreciation — investments		196,450,212
Temporary book/tax differences		(10,366	)
Capital loss carryforward		(104,664,620	)
Shares of beneficial interest		1,768,047,228
Total net assets	$	1,879,867,035

  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.

Invesco Van Kampen V.I. Growth and Income 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 utilized $91,339,394 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2017	$	104,664,620

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $514,442,686 and $496,474,574, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	228,781,223
Aggregate unrealized (depreciation) of investment securities		(32,331,011	)
Net unrealized appreciation of investment securities	$	196,450,212
Cost of investments for tax purposes is $1,696,091,697.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions and net operating losses, on December 31, 2010, accumulated undistributed net investment income was decreased by $609 and capital increased by $609. This reclassification had no effect on the net assets of the Fund.

NOTE 9—Share Information

For the years ended December 31, 2010 and 2009, transactions were as follows:

	Summary of Share Activity
	For the years ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sales:
Series I		836,015		$	13,995,298			1,149,207		$	15,623,017
Series II		10,759,774			177,127,218			8,282,559			112,779,592
Total sales		11,595,789		$	191,122,516			9,431,776		$	128,402,609
Dividend reinvestment:
Series I		9,138		$	156,262			424,064		$	5,735,264
Series II		91,003			1,556,159			3,426,092			46,515,143
Total dividend reinvestment		100,141		$	1,712,421			3,850,156		$	52,250,407
Repurchases:
Series I		(1,831,877	)	$	(30,656,787	)		(2,812,355	)	$	(38,075,961	)
Series II		(9,338,871	)		(157,349,691	)		(9,409,312	)		(131,420,983	)
Total repurchases		(11,170,748	)	$	(188,006,478	)		(12,221,667	)	$	(169,496,944	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 81% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. In addition, less than 1% of the outstanding shares of the fund are owned by Invesco or an investment advisor under common control.

Invesco Van Kampen V.I. Growth and Income Fund

NOTE 10—Change in Independent Registered Public Accounting Firm (Unaudited)

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Invesco Van Kampen V.I. Growth and Income Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco Van Kampen V.I. Growth and Income Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen V.I. Growth and Income Fund (formerly known as Van Kampen Life Investment Trust Growth and Income Portfolio; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 19, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco Van Kampen V.I. Growth and Income Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,226.67	$	3.26	$	1,022.28	$	2.96		0.58	%
Series II		1,000.00		1,225.48		4.66		1,021.02		4.23		0.83

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco Van Kampen V.I. Growth and Income 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco Van Kampen V.I. Growth and Income Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco Van Kampen V.I. High Yield Fund

Annual Report to Shareholders  § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VK-VIHYI-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

As part of Invesco’s June 1, 2010, acquisition of Morgan Stanley’s retail asset management business, Morgan Stanley Universal Institutional Funds, Inc. V.I. High Yield Portfolio was reorganized into Invesco Van Kampen V.I. High Yield Fund.

     On June 25, 2010, Peter Ehret, head of High Yield and portfolio manager, and his investment team took over management of the Fund. A listing of your Fund’s managers appears later in this report.

     For the year ended December 31, 2010, Series I shares of Invesco Van Kampen V.I. High Yield Fund underperformed the Fund’s broad market index, the Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index, due mainly to the Fund’s conservative posture during the 12-month period.

     The Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	12.11	%
Series II Shares	11.90
Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index▼ (Broad Market Index)	14.94

^▼ Lipper Inc.

How we invest

We invest primarily in debt securities that are determined to be below investment grade quality. These bonds, commonly known as “junk bonds,” are typically corporate bonds of U.S. based companies, many of which are moderately sized firms. We principally invest in junk bonds rated B or above, although we regularly own bonds of lesser quality as well. We may invest in convertible bonds, preferred stock, derivatives and bank loans, but do not expect these instruments to be a substantial part of our portfolio. We may invest up to 30% of total assets in foreign securities.

     The primary driver of our security selection is fundamental bottom-up credit analysis conducted by a team of analysts who specialize by industry. This approach is augmented with an

on-going review of the relative value of securities and a top-down process that includes sector, economic and quantitative analysis. Changes in a security’s risk/return profile or relative value and top-down factors generally determine buy and sell decisions.

     Portfolio construction begins with a well-defined Fund design that emphasizes diversification and establishes the target investment vehicles for generating the desired “alpha” (the return expected from an investment) as well as the risk parameters appropriate for the current positioning in the credit cycle. Investments are evaluated for liquidity and risk versus relative value. Working closely with other investment specialists and traders, we determine the timing and amount of each alpha decision to use in the portfolio at any time, taking into

account security selection skill and market opportunities.

	Sell decisions are based on:
n	Low equity value to debt, high subordination and negative free cash flow coupled with negative news, declining expectations, or an increasing risk profile.
n	Very low yields.
n	Presentation of a better relative value opportunity.

Market conditions and your Fund

In the U.S. and most of the developed world, a gradual and somewhat lackluster recovery continued, with central banks keeping interest rates at low levels and with few of them withdrawing their quantitative easing measures. This helped private sector companies improve their balance sheets and earnings following the global financial crisis that began to dissipate in early 2009. However, investor skepticism of global governments’ abilities to retire huge amounts of debt without affecting economic growth rates caused sovereign debt distress (especially for eurozone countries) and became a focal point of investor concern.

     In the U.S., economic recovery was present, although the pace of recovery remained modest as stubbornly high unemployment and export weakness continued to weigh on the economy. Real gross domestic product (GDP), the broadest measure of overall U.S. economic activity, increased at annual rates of 3.7%, 1.7% and 2.6% for the first, second and third quarters of 2010, respectively.¹ The U.S. Federal Reserve (the Fed) maintained a very accommodative monetary policy throughout the period, with the federal funds target rate

Portfolio Composition†

By credit quality
A	0.7	%
BBB	2.8
BB	36.4
B	44.8
CCC	10.3
Non-Rated	3.5
Cash	1.5

Top 10 Fixed Income Issuers*

1. CIT Group Inc.	1.9	%
2. MGM Resorts International	1.7
3. Vangent Inc.	1.6
4. Intelsat Jackson Holdings S.A.	1.5
5. HCA, Inc.	1.5
6. Nielsen Finance LLC/Co.	1.4
7. International Lease Finance Corp.	1.4
8. Sprint Capital Corp.	1.3
9. Ply Gem Industries Inc.	1.3
10. Ally Finance Inc.	1.2

Top Five Industries

1. Oil & Gas Exploration & Production	7.8	%
2. Casinos & Gaming	6.4
3. Wireless Telecommunications Services	5.7
4. Building Products	4.2
5. Broadcasting	3.6

Total Net Assets	$30.6 million
Total Number of Holdings*	276

†Source: Standard and Poor’s. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations, including specific securities, money market instruments or other debts. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest); ratings are subject to change without notice. “Non-Rated” indicates the debtor was not rated, and should not be interpreted as indicating low quality. For more information on Standard and Poor’s rating methodology, please visit www.standardandpoors.com and select ‘Understanding Ratings’ under Rating Resources on the homepage.

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.

Invesco Van Kampen V.I. High Yield Fund

unchanged in its range of zero to 0.25%.² The Fed recently described its view of the U.S. economy by stating: “The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated.”² Consequently, it was widely expected that the Fed would continue to keep interest rates low for an extended period.

     Defaults in the high yield bond market reached extreme lows in 2010 and were below those recorded during the previous year.

     The broad U.S. high yield bond market, as measured by the Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index, generated strong positive total return for the 12 months ended December 31, 2010. Slow but steady economic growth, the avoidance of a double-dip recession, a recovery in corporate financial health, strong inflows into the high yield asset class, low overall interest rates and a decline in defaults boosted the performance of high yield bonds. In May and November of 2010, debt concerns in Europe caused investors to scale back their risk profile and embrace the safe haven of U.S. government-related securities. Late in the year, U.S. Treasury yields began to rise. Nonetheless, the impact was insufficient to erase gains realized by non-government bonds over the reporting period.

     On an absolute basis, the Fund generated positive returns for the 12-month period. Prior to the current management taking control, the Fund maintained a defensive posture and was underweight in lower quality CCC-rated issues for the first half of the reporting period. This was the main detractor from performance as lower credit quality issues experienced the most significant positive returns in the high yield market. The previous managers de-emphasized highly cyclical (or economically sensitive) industries and focused on more stable industry groups that have performed relatively well throughout an economic cycle. The Fund’s overweight positions in the oil field services and telecommunication wirelines industries detracted from its performance as these asset classes underperformed for the first half of the reporting period. The Fund’s underweight position in the financials sector, particularly in the banking and finance company industries, was a significant detractor as these assets outperformed during the period.

     Since taking over management of the Fund on June 25, 2010, we have worked on aligning the Fund to the Invesco research team’s outlook. We have gradually built up our investment weights in financial companies, particularly in banking and insurance companies; however, we remained cautious about the lower quality bonds. The largest detractors for the second half of the reporting period resulted from security selection in the consumer cyclical services and media non-cable industries, and security selection and an underweight allocation in the information technology sector. The Fund outperformed in the electric, automotive and non-captive diversified industries.

     We remain generally positive in our assessment of high yield securities; however, macroeconomic risks, slow economic growth and the potential for a double-dip recession and current valuations make us cautious about owning riskier assets. We believe the risk of holding those highest risk securities outweighs potential benefits for the Fund at this time.

     Thank you for investing in Invesco Van Kampen V.I. High Yield Fund and for sharing our long-term investment horizon.

1 Bureau of Economic Analysis
2 U.S. Federal Reserve

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Peter Ehret

Chartered Financial Analyst, portfolio manager, is lead manager of Invesco Van Kampen V.I. High Yield Fund. Mr. Ehret joined Invesco in 2001. He graduated cum laude with a B.S. in economics from the University of Minnesota. He also earned an M.S. in real estate appraisal and investment analysis from the University of Wisconsin-Madison.

Darren Hughes

Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. High Yield Fund. He joined Invesco in 1992. Mr. Hughes earned a B.B.A. in finance and economics from Baylor University.

Scott Roberts

Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. High Yield Fund. He joined Invesco in 2000. Mr. Roberts earned a B.B.A. in finance from the University of Houston.

Invesco Van Kampen V.I. High Yield Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 12/31/96, Fund data from 1/2/97

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns
As of 12/31/10

Series I Shares
Inception (1/2/97)	4.88	%
10 Years	5.51
5 Years	6.78
1 Year	12.11
Series II Shares
10 Years	5.26	%
5 Years	6.53
1 Year	11.90

Effective June 1, 2010, Class I shares of the predecessor fund advised by Morgan Stanley Investment Management Inc. were reorganized into Series I shares of Invesco Van Kampen V.I. High Yield Fund. Returns shown above for Series I shares are blended returns of the predecessor fund and Invesco Van Kampen V.I. High Yield Fund. Share class returns will differ from the predecessor fund because of different expenses.

     Series II shares incepted on June 1, 2010. Performance shown prior to that date is that of the predecessor fund’s Class I shares restated to reflect the higher 12b-1 fees applicable to Series II shares. Class I shares performance reflects any applicable fee waivers or

expense reimbursements. The inception date of the predecessor fund’s Class I shares is January 2, 1997.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.81% and 1.06%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.98% and 1.23%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco Van Kampen V.I. High Yield Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco Van Kampen V.I. High Yield Fund

Invesco Van Kampen V.I. High Yield Fund’s investment objective is above-average total return over a market cycle of three to five years by investing primarily in a diversified portfolio of high yield securities.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

Credit risk refers to an issuer’s ability to make timely payments of interest and principal. Because the Fund invests primarily in medium- and lower-grade securities, the Fund is subject to a higher level of credit risk than a fund that invests only in investment grade securities. The credit quality of noninvestment-grade securities is considered speculative by recognized rating agencies with respect to the issuer’s continuing ability to pay interest and principal. Lower-grade securities (also sometimes known as junk bonds) may have less liquidity and a higher incidence of default than higher-grade securities. The Fund may incur higher expenses to protect the Fund’s interests in such securities. The credit risks and market prices of medium- and lower-grade securities, especially those with longer maturities or those that do not make regular interest payments, generally are more sensitive to negative issuer developments or adverse economic conditions and may be more volatile than are higher-grade securities.

     The income you receive from the Fund is based primarily on prevailing interest rates and credit risk, which can vary widely over the short- and long-term. If interest rates drop, your income from the Fund may drop as well.

     If interest rates fall, it is possible that issuers of income securities with high interest rates will prepay or “call” their securities before their maturity dates. In this event, the proceeds from these securities would likely be reinvested in securities bearing the new, lower interest rates, resulting in a possible decline in the Fund’s income and distributions to shareholders.

     The risks of investing in securities of foreign issuers, including emerging market issuers, can include fluctuations in foreign currencies, foreign currency exchange controls, political and economic instability, differences in securities regulation and trading, and foreign taxation issues.

     Risks of derivatives include imperfect correlation between the value of the instruments and the underlying assets; risks of default by the other party to certain transactions; risks that the transactions may result in losses that partially or completely offset gains in portfolio positions; and risks that the transactions may not be liquid.

     Market risk is the possibility that the market values of securities owned by the Fund will decline. Investments in income securities generally are affected by changes in interest rates and the credit-worthiness of the issuer. The prices of such securities tend to fall as interest rates rise, and such declines tend to be greater among income securities with longer maturities. The value of a convertible security tends to decline as interest rates rise and, because of the conversion feature, tends to vary with fluctuations in the market value of the underlying security.

About indexes used in this report

The Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index is an unmanaged index that covers U.S. corporate, fixed-rate, non-investment grade debt with at least one year to maturity and at least $150 million in par outstanding. Index weights for each issuer are capped at 2%.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco Van Kampen V.I. High Yield Fund

Schedule of Investments^(a)

December 31, 2010

	Principal
	Amount		Value
U.S. Dollar Denominated Bonds & Notes–89.52%
Advertising–0.24%
Lamar Media Corp., Sr. Gtd. Sub. Global Notes, 7.88%, 04/15/18	$	70,000	$	74,463
Aerospace & Defense–1.80%
Alliant Techsystems Inc., Sr. Unsec. Gtd. Sub. Notes, 6.88%, 09/15/20		15,000		15,488
BE Aerospace, Inc., Sr. Unsec. Notes, 6.88%, 10/01/20		85,000		87,975
Bombardier Inc. (Canada), Sr. Notes, 7.75%, 03/15/20(b)		110,000		119,900
Hexcel Corp., Sr. Unsec. Sub. Global Notes, 6.75%, 02/01/15		150,000		153,750
Triumph Group, Inc., Sr. Unsec. Gtd. Sub. Global Notes, 8.00%, 11/15/17		165,000		174,487
				551,600
Airlines–2.16%
American Airlines, Series 1991-A2, Sec. Pass Through Ctfs., 10.18%, 01/02/13		31,935		32,374
Continental Airlines Inc., Series 2007-1, Class C, Sec. Sub. Global Pass Through Ctfs., 7.34%, 04/19/14		242,972		245,402
Series 2009-2, Class B, Sec. Global Pass Through Ctfs., 9.25%, 05/10/17		33,245		36,071
Delta Air Lines, Inc., Sr. Sec. Notes, 9.50%, 09/15/14(b)		184,000		201,020
UAL Corp., Series 2007-1A, Sec. Gtd. Global Pass Through Ctfs., 6.64%, 07/02/22		43,442		44,284
Series 2009-2B, Sec. Gtd. Pass Through Ctfs., 12.00%, 01/15/16(b)		92,107		103,620
				662,771
Aluminum–0.28%
Century Aluminum Co., Sr. Sec. Notes, 8.00%, 05/15/14		80,000		84,650
Apparel, Accessories & Luxury Goods–2.30%
Hanesbrands Inc., Sr. Unsec. Gtd. Notes, 6.38%, 12/15/20(b)		80,000		77,200
Levi Strauss & Co., Sr. Unsec. Global Notes, 7.63%, 05/15/20		160,000		166,000
Oxford Industries Inc., Sr. Sec. Gtd. Global Notes, 11.38%, 07/15/15		175,000		197,312
Phillips-Van Heusen Corp., Sr. Unsec. Notes, 7.38%, 05/15/20		50,000		53,125
Quiksilver Inc., Sr. Unsec. Gtd. Global Notes, 6.88%, 04/15/15		200,000		196,500
Visant Corp., Sr. Notes, 10.00%, 10/01/17(b)		15,000		15,975
				706,112
Asset Management & Custody Banks–0.05%
Accellent Inc., Sr. Sub. Gtd. Notes, 10.00%, 11/01/17(b)		15,000		14,175
Auto Parts & Equipment–0.21%
Tenneco Inc., Sr. Gtd. Notes, 6.88%, 12/15/20(b)		20,000		20,400
Sr. Notes, 7.75%, 08/15/18(b)		40,000		42,600
				63,000
Automobile Manufacturers–0.70%
Ford Motor Co., Sr. Unsec. Global Notes, 7.45%, 07/16/31		110,000		118,800
Motors Liquidation Co., Sr. Unsec. Notes, 8.38%, 07/15/33(c)		260,000		94,575
				213,375
Broadcasting–1.59%
Allbritton Communications Co., Sr. Unsec. Global Notes, 8.00%, 05/15/18		65,000		65,975
Nielsen Finance LLC/Co., Sr. Unsec. Gtd. Notes, 7.75%, 10/15/18(b)		330,000		343,200
Sr. Unsec. Gtd. Sub. Disc. Global Notes, 12.50%, 08/01/16(d)		75,000		79,125
				488,300
Building Products–3.93%
Associated Materials LLC, Sr. Sec. Gtd. Notes, 9.13%, 11/01/17(b)		120,000		126,600
Building Materials Corp. of America, Sr. Gtd. Notes, 7.50%, 03/15/20(b)		60,000		61,650
Sr. Notes, 6.88%, 08/15/18(b)		65,000		64,675
Gibraltar Industries Inc., Series B, Sr. Unsec. Gtd. Sub. Global Notes, 8.00%, 12/01/15		105,000		106,444
Nortek Inc., Sr. Sec. Gtd. Global Notes, 11.00%, 12/01/13		215,000		230,050
Sr. Unsec. Gtd. Notes, 10.00%, 12/01/18(b)		20,000		20,950
Ply Gem Industries Inc., Sr. Sec. Gtd. First & Second Lien Global Notes, 11.75%, 06/15/13		305,000		327,112
Sr. Unsec. Gtd. Sub. Global Notes, 13.13%, 07/15/14		55,000		58,575
Roofing Supply Group LLC/Roofing Supply Finance Inc., Sr. Sec. Notes, 8.63%, 12/01/17(b)		170,000		177,225
USG Corp., Sr. Gtd. Notes, 8.38%, 10/15/18(b)		10,000		9,850
Sr. Unsec. Gtd. Notes, 9.75%, 08/01/14(b)		20,000		21,250
				1,204,381

Invesco Van Kampen V.I. High Yield Fund

	Principal
	Amount		Value
Cable & Satellite–1.63%
CSC Holdings LLC, Sr. Unsec. Global Notes, 8.63%, 02/15/19	$	115,000	$	131,675
Hughes Network Systems LLC/HNS Finance Corp., Sr. Unsec. Gtd. Global Notes,
9.50%, 04/15/14		40,000		41,450
9.50%, 04/15/14		140,000		145,075
XM Satellite Radio Inc., Sr. Unsec. Gtd. Notes, 13.00%, 08/01/13(b)		150,000		179,250
				497,450
Casinos & Gaming–6.23%
Boyd Gaming Corp., Sr. Notes, 9.13%, 12/01/18(b)		15,000		15,000
Caesars Entertainment Operating Co. Inc., Sr. Sec. Gtd. Global Notes,
11.25%, 06/01/17		171,000		193,230
10.00%, 12/15/18		30,000		27,450
Sr. Sec. Notes, 12.75%, 04/15/18(b)		45,000		46,350
Sr. Unsec. Gtd. Global Bonds, 5.63%, 06/01/15		114,000		94,905
Great Canadian Gaming Corp. (Canada), Sr. Unsec. Gtd. Sub. Notes, 7.25%, 02/15/15(b)		95,000		97,850
Las Vegas Sands Corp., Sr. Sec. Gtd. Global Notes, 6.38%, 02/15/15		115,000		117,587
Mandalay Resort Group, Sr. Unsec. Gtd. Sub. Notes, 7.63%, 07/15/13		100,000		95,000
MGM Resorts International, Sr. Sec. Gtd. Notes, 13.00%, 11/15/13		175,000		207,375
Sr. Unsec. Gtd. Global Notes,
6.75%, 09/01/12		35,000		34,912
6.75%, 04/01/13		295,000		290,575
Pinnacle Entertainment Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 08/01/17		90,000		98,325
Scientific Games Corp., Sr. Sub. Notes, 8.13%, 09/15/18(b)		15,000		15,188
Scientific Games International Inc., Sr. Unsec. Gtd. Sub. Global Notes, 9.25%, 06/15/19		150,000		155,625
Seneca Gaming Corp., Sr. Unsec. Gtd. Notes, 8.25%, 12/01/18(b)		35,000		35,175
Snoqualmie Entertainment Authority, Sr. Sec. Floating Rate Notes, 4.43%, 02/01/14(b)(e)		55,000		47,850
Sr. Sec. Notes, 9.13%, 02/01/15(b)		105,000		97,650
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., Sec. Gtd. First Mortgage Global Notes, 7.75%, 08/15/20		45,000		49,050
Sr. Sec. Gtd. First Mortgage Global Notes, 7.88%, 05/01/20		175,000		189,219
				1,908,316
Coal & Consumable Fuels–0.12%
CONSOL Energy Inc., Sr. Unsec. Gtd. Notes, 8.25%, 04/01/20(b)		35,000		37,975
Computer & Electronics Retail–0.07%
Rent-A-Center Inc., Sr. Unsec. Notes, 6.63%, 11/15/20(b)		20,000		20,050
Computer Storage & Peripherals–0.27%
Seagate HDD Cayman (Cayman Islands), Sr. Unsec. Gtd. Notes, 7.75%, 12/15/18(b)		80,000		81,700
Construction & Engineering–1.20%
American Residential Services LLC, Sr. Sec. Notes, 12.00%, 04/15/15(b)		35,000		36,838
Dycom Investments Inc., Sr. Unsec. Gtd. Sub. Global Notes, 8.13%, 10/15/15		40,000		40,900
MasTec, Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 02/01/17		105,000		106,837
Tutor Perini Corp., Sr. Unsec. Gtd. Notes, 7.63%, 11/01/18(b)		180,000		182,250
				366,825
Construction Materials–1.10%
Cemex Finance LLC, Sr. Sec. Gtd. Bonds, 9.50%, 12/14/16(b)		100,000		103,551
Texas Industries Inc., Sr. Unsec. Gtd. Notes, 9.25%, 08/15/20(b)		220,000		234,850
				338,401
Construction, Farm Machinery & Heavy Trucks–1.81%
Case New Holland Inc., Sr. Notes, 7.88%, 12/01/17(b)		75,000		82,875
Sr. Unsec. Gtd. Global Notes, 7.75%, 09/01/13		110,000		118,800
Manitowoc Co. Inc. (The), Sr. Unsec. Gtd. Notes, 8.50%, 11/01/20		20,000		21,425
Navistar International Corp., Sr. Unsec. Gtd. Notes, 8.25%, 11/01/21		185,000		200,262
Oshkosh Corp., Sr. Unsec. Gtd. Global Notes, 8.50%, 03/01/20		80,000		88,200
Titan International Inc., Sr. Sec. Gtd. Notes, 7.88%, 10/01/17(b)		40,000		42,500
				554,062
Consumer Finance–2.89%
Ally Financial Inc., Sr. Unsec. Gtd. Global Notes,
8.00%, 03/15/20		185,000		203,500
8.00%, 11/01/31		30,000		32,100
Sr. Unsec. Gtd. Notes, 7.50%, 09/15/20(b)		135,000		143,775
Capital One Capital VI, Jr. Ltd. Gtd. Sub. Trust Cum. Pfd. Securities, 8.88%, 05/15/40		115,000		120,031
Ford Motor Credit Co. LLC, Sr. Unsec. Notes, 8.00%, 12/15/16		95,000		106,400
8.13%, 01/15/20		150,000		174,750
National Money Mart Co. (Canada), Sr. Unsec. Gtd. Global Notes, 10.38%, 12/15/16		95,000		103,550
				884,106

Invesco Van Kampen V.I. High Yield Fund

	Principal
	Amount		Value
Data Processing & Outsourced Services–0.82%
SunGard Data Systems Inc., Sr. Unsec. Gtd. Global Notes, 10.63%, 05/15/15	$	80,000	$	89,200
Sr. Unsec. Gtd. Sub. Global Notes, 10.25%, 08/15/15		105,000		110,512
Sr. Unsec. Notes,
7.38%, 11/15/18(b)		25,000		25,250
7.63%, 11/15/20(b)		25,000		25,438
				250,400
Department Stores–0.48%
Sears Holdings Corp., Sr. Sec. Notes, 6.63%, 10/15/18(b)		155,000		146,475
Distillers & Vintners–0.64%
Constellation Brands Inc., Sr. Unsec. Gtd. Global Notes, 7.25%, 05/15/17		185,000		196,100
Diversified Support Services–0.05%
Mobile Mini, Inc., Sr. Unsec. Gtd. Notes, 7.88%, 12/01/20(b)		15,000		15,638
Drug Retail–0.27%
General Nutrition Centers Inc., Sr. Unsec. Gtd. PIK Global Notes, 5.75%, 03/15/14(e)		85,000		84,150
Electrical Components & Equipment–0.08%
Polypore International Inc., Sr. Unsec. Gtd. Notes, 7.50%, 11/15/17(b)		25,000		25,750
Environmental & Facilities Services–0.14%
EnergySolutions Inc./LLC, Sr. Unsec. Gtd. Notes, 10.75%, 08/15/18(b)		40,000		43,900
Fertilizers & Agricultural Chemicals–0.75%
CF Industries Inc., Sr. Unsec. Gtd. Notes, 7.13%, 05/01/20		210,000		230,475
Food Retail–0.28%
Simmons Foods Inc., Sr. Sec. Notes, 10.50%, 11/01/17(b)		80,000		85,800
Forest Products–0.03%
Sino-Forest Corp. (Canada), Gtd. Notes, 6.25%, 10/21/17(b)		10,000		10,041
Gas Utilities–0.55%
Ferrellgas LP/Ferrellgas Finance Corp., Sr. Unsec. Notes, 6.50%, 05/01/21(b)		90,000		87,975
Suburban Propane Partners, L.P./Suburban Energy Finance Corp., Sr. Unsec. Notes, 7.38%, 03/15/20		75,000		80,438
				168,413
Health Care Equipment–0.34%
DJO Finance LLC/Corp., Sr. Unsec. Gtd. Global Notes, 10.88%, 11/15/14		95,000		104,025
Health Care Facilities–3.37%
Community Health Systems Inc., Sr. Unsec. Gtd. Global Notes, 8.88%, 07/15/15		175,000		184,625
Hanger Orthopedic Group Inc., Sr. Unsec. Gtd. Global Notes, 7.13%, 11/15/18		25,000		25,062
HCA, Inc., Sr. Sec. Gtd. Global Notes, 7.88%, 02/15/20		213,000		228,975
Sr. Unsec. Notes, 5.75%, 03/15/14		225,000		222,750
Health Management Associates Inc., Sr. Sec. Notes, 6.13%, 04/15/16		30,000		30,375
Healthsouth Corp., Sr. Unsec. Gtd. Notes, 7.25%, 10/01/18		50,000		51,125
7.75%, 09/15/22		25,000		25,875
Tenet Healthcare Corp., Sr. Sec. Gtd. Global Notes, 10.00%, 05/01/18		180,000		211,500
Sr. Unsec. Global Notes, 9.25%, 02/01/15		50,000		53,500
				1,033,787
Health Care Services–0.86%
Apria Healthcare Group Inc., Sr. Sec. Gtd. Global Notes, 12.38%, 11/01/14		105,000		116,419
DaVita Inc., Sr. Unsec. Gtd. Notes, 6.38%, 11/01/18		25,000		24,938
Fresenius US Finance II Inc., Sr. Unsec. Gtd. Notes, 9.00%, 07/15/15(b)		85,000		97,750
Universal Hospital Services Inc., Sr. Sec. PIK Global Notes, 8.50%, 06/01/15		25,000		25,812
				264,919
Health Care Technology–0.40%
MedAssets Inc., Sr. Notes, 8.00%, 11/15/18(b)		120,000		121,200
Homebuilding–0.67%
K Hovnanian Enterprises Inc., Sr. Sec. Gtd. Global Notes, 10.63%, 10/15/16		165,000		170,775
M/I Homes Inc., Sr. Unsec. Notes, 8.63%, 11/15/18(b)		35,000		35,262
				206,037
Hotels, Resorts & Cruise Lines–0.24%
Royal Caribbean Cruises Ltd., Sr. Unsec. Global Notes, 6.88%, 12/01/13		70,000		74,900
Household Products–0.24%
Central Garden and Pet Co., Sr. Gtd. Sub. Notes, 8.25%, 03/01/18		70,000		71,925
Housewares & Specialties–0.03%
Jarden Corp., Sr. Unsec. Gtd. Notes, 6.13%, 11/15/22		10,000		9,588

Invesco Van Kampen V.I. High Yield Fund

	Principal
	Amount		Value
Independent Power Producers & Energy Traders–1.61%
AES Corp. (The), Sr. Unsec. Notes, 7.75%, 03/01/14	$	240,000	$	257,400
NRG Energy, Inc., Sr. Unsec. Gtd. Notes, 7.38%, 02/01/16		150,000		153,750
7.38%, 01/15/17		50,000		51,250
8.50%, 06/15/19		30,000		31,050
				493,450
Industrial Conglomerates–0.82%
RBS Global Inc./ Rexnord LLC, Sr. Unsec. Gtd. Global Notes, 8.50%, 05/01/18		235,000		249,687
Industrial Gases–0.18%
Airgas Inc., Sr. Unsec. Gtd. Sub. Global Notes, 7.13%, 10/01/18		50,000		55,375
Industrial Machinery–0.25%
Mueller Water Products Inc., Sr. Unsec. Gtd. Global Notes, 8.75%, 09/01/20		15,000		16,725
SPX Corp., Sr. Unsec. Gtd. Notes, 6.88%, 09/01/17(b)		55,000		58,713
				75,438
Integrated Telecommunication Services–1.95%
Intelsat Jackson Holdings S.A. (Luxembourg), Sr. Unsec. Gtd. Global Notes, 9.50%, 06/15/16		35,000		37,100
Sr. Unsec. Notes, 7.25%, 10/15/20(b)		430,000		436,450
Qwest Communications International Inc., Sr. Unsec. Gtd. Notes, 7.13%, 04/01/18(b)		120,000		124,200
				597,750
Internet Retail–0.89%
Travelport LLC, Sr. Unsec. Gtd. Global Notes, 9.88%, 09/01/14		24,000		23,520
Sr. Unsec. Gtd. Sub. Global Notes, 11.88%, 09/01/16		135,000		133,312
Travelport LLC/Inc., Sr. Unsec. Gtd. Global Notes, 9.00%, 03/01/16		120,000		116,700
				273,532
Investment Banking & Brokerage–0.70%
Cantor Fitzgerald L.P., Bonds, 7.88%, 10/15/19(b)		105,000		106,153
E*Trade Financial Corp., Sr. Unsec. Notes, 7.88%, 12/01/15		110,000		109,725
				215,878
Leisure Facilities–0.52%
Universal City Development Partners Ltd./UCDP Finance Inc., Sr. Unsec. Gtd. Global Notes, 8.88%, 11/15/15		150,000		160,500
Leisure Products–0.05%
Toys R Us-Delaware Inc., Sr. Sec. Gtd. Notes, 7.38%, 09/01/16(b)		15,000		15,638
Life Sciences Tools & Services–0.21%
Patheon Inc. (Canada), Sr. Sec. Notes, 8.63%, 04/15/17(b)		65,000		65,163
Marine–0.13%
Stena A.B. (Sweden), Sr. Unsec. Global Notes, 7.00%, 12/01/16		40,000		40,050
Metal & Glass Containers–0.45%
Owens-Brockway Glass Container Inc., Sr. Unsec. Gtd. Global Notes, 7.38%, 05/15/16		130,000		139,100
Movies & Entertainment–1.55%
AMC Entertainment Holdings Inc., Sr. Sub. Notes, 9.75%, 12/01/20(b)		40,000		41,650
AMC Entertainment Inc., Sr. Unsec. Gtd. Global Notes, 8.75%, 06/01/19		185,000		197,950
Cinemark USA Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 06/15/19		60,000		65,250
NAI Entertainment Holdings LLC, Sr. Sec. Notes, 8.25%, 12/15/17(b)		160,000		168,800
				473,650
Multi-Line Insurance–2.30%
American International Group, Inc., Jr. Sub. Variable Rate Global Deb., 8.18%, 05/15/58(e)		170,000		180,625
Sr. Unsec. Global Notes, 6.40%, 12/15/20		25,000		26,094
Hartford Financial Services Group Inc. (The), Jr. Unsec. Sub. Variable Rate Deb., 8.13%, 06/15/38(e)		80,000		85,848
Liberty Mutual Group Inc., Jr. Unsec. Gtd. Sub. Bonds, 7.80%, 03/15/37(b)		225,000		223,313
Nationwide Mutual Insurance Co., Sub. Notes, 9.38%, 08/15/39(b)		160,000		187,326
				703,206
Multi-Sector Holdings–0.34%
Reynolds Group Issuer Inc./LLC, Sr. Sec. Gtd. Notes, 7.13%, 04/15/19(b)		100,000		103,250
Office Services & Supplies–0.11%
IKON Office Solutions, Inc., Sr. Unsec. Notes, 6.75%, 12/01/25		35,000		33,775
Oil & Gas Drilling–0.27%
Precision Drilling Corp. (Canada), Sr. Unsec. Gtd. Notes, 6.63%, 11/15/20(b)		55,000		56,238
Trinidad Drilling Ltd., Sr. Unsec. Notes, 7.88%, 01/15/19(b)		25,000		25,763
				82,001
Oil & Gas Equipment & Services–1.13%
Bristow Group, Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 09/15/17		60,000		63,000
Calfrac Holdings L.P., Sr. Unsec. Notes, 7.50%, 12/01/20(b)		25,000		25,172

Invesco Van Kampen V.I. High Yield Fund

	Principal
	Amount		Value
Oil & Gas Equipment & Services–(continued)
Compagnie Generale de Geophysique-Veritas (France), Sr. Unsec. Gtd. Global Notes, 7.50%, 05/15/15	$	35,000	$	35,919
Complete Production Services, Inc., Sr. Unsec. Gtd. Global Notes, 8.00%, 12/15/16		65,000		67,600
Key Energy Services Inc., Sr. Unsec. Gtd. Global Notes, 8.38%, 12/01/14		145,000		153,700
				345,391
Oil & Gas Exploration & Production–7.75%
Berry Petroleum Co., Sr. Unsec. Notes, 6.75%, 11/01/20		35,000		35,350
Chaparral Energy Inc., Sr. Unsec. Gtd. Global Notes, 8.50%, 12/01/15		20,000		20,450
8.88%, 02/01/17		140,000		143,150
Chesapeake Energy Corp., Sr. Unsec. Gtd. Notes, 9.50%, 02/15/15		150,000		169,500
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 7.13%, 05/01/17		105,000		109,331
Concho Resources Inc., Sr. Notes, 7.00%, 01/15/21		20,000		20,600
Continental Resources Inc., Sr. Unsec. Gtd. Global Notes,
8.25%, 10/01/19		50,000		54,875
7.38%, 10/01/20		65,000		68,738
Sr. Unsec. Gtd. Notes, 7.13%, 04/01/21(b)		30,000		31,650
Delta Petroleum Corp., Sr. Unsec. Gtd. Global Notes, 7.00%, 04/01/15		90,000		59,850
Encore Acquisition Co., Sr. Gtd. Sub. Notes, 9.50%, 05/01/16		90,000		100,238
EXCO Resources Inc., Sr. Unsec. Gtd. Notes, 7.50%, 09/15/18		125,000		122,500
Forest Oil Corp., Sr. Unsec. Gtd. Global Notes, 7.25%, 06/15/19		225,000		228,937
Harvest Operations Corp. (Canada), Sr. Unsec. Gtd. Notes, 6.88%, 10/01/17(b)		80,000		82,600
McMoRan Exploration Co., Sr. Unsec. Gtd. Notes, 11.88%, 11/15/14		160,000		177,400
Newfield Exploration Co., Sr. Unsec. Sub. Global Notes, 7.13%, 05/15/18		55,000		58,163
Petrohawk Energy Corp., Sr. Unsec. Gtd. Global Notes,
7.88%, 06/01/15		175,000		182,656
7.25%, 08/15/18		60,000		60,825
Pioneer Natural Resources Co., Sr. Unsec. Notes, 6.65%, 03/15/17		250,000		266,959
Plains Exploration & Production Co., Sr. Unsec. Gtd. Notes, 7.63%, 06/01/18		220,000		232,650
Range Resources Corp., Sr. Unsec. Gtd. Sub. Notes, 7.50%, 05/15/16		90,000		93,600
Whiting Petroleum Corp., Sr. Unsec. Gtd. Sub. Notes, 6.50%, 10/01/18		55,000		55,825
				2,375,847
Oil & Gas Refining & Marketing–0.97%
Tesoro Corp., Sr. Unsec. Gtd. Global Bonds, 6.50%, 06/01/17		135,000		135,844
United Refining Co., Series 2, Sr. Unsec. Gtd. Global Notes, 10.50%, 08/15/12		165,000		162,318
				298,162
Oil & Gas Storage & Transportation–2.38%
Copano Energy LLC/Copano Energy Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.13%, 03/01/16		150,000		156,000
Genesis Energy L.P./Genesis Energy Finance Corp., Sr. Unsec. Gtd. Notes, 7.88%, 12/15/18(b)		40,000		39,800
Inergy L.P./Inergy Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.25%, 03/01/16		190,000		199,025
MarkWest Energy Partners L.P./MarkWest Energy Finance Corp., Sr. Unsec. Gtd. Notes, 6.75%, 11/01/20		35,000		34,956
Series B, Sr. Unsec. Gtd. Global Notes, 8.75%, 04/15/18		160,000		173,800
Overseas Shipholding Group, Inc., Sr. Unsec. Notes, 8.13%, 03/30/18		50,000		50,375
Regency Energy Partners L.P./Regency Energy Finance Corp., Sr. Unsec. Gtd. Notes, 6.88%, 12/01/18		75,000		76,313
				730,269
Other Diversified Financial Services–1.50%
International Lease Finance Corp., Sr. Sec. Notes,
6.75%, 09/01/16(b)		65,000		68,697
7.13%, 09/01/18(b)		65,000		69,387
Sr. Unsec. Notes,
8.63%, 09/15/15(b)		260,000		280,150
8.25%, 12/15/20		40,000		41,500
				459,734
Packaged Foods & Meats–0.73%
Chiquita Brands International, Inc., Sr. Unsec. Global Notes, 8.88%, 12/01/15		65,000		66,544
JBS USA LLC/JBS USA Finance Inc., Sr. Unsec. Gtd. Global Notes, 11.63%, 05/01/14		135,000		158,287
				224,831
Paper Packaging–0.56%
Cascades Inc., Sr. Unsec. Gtd. Global Notes, 7.88%, 01/15/20		165,000		169,950
Paper Products–0.96%
Clearwater Paper Corp., Sr. Gtd. Notes, 7.13%, 11/01/18(b)		35,000		36,312
Mercer International Inc., Sr. Unsec. Notes, 9.50%, 12/01/17(b)		50,000		51,750
Neenah Paper, Inc., Sr. Unsec. Gtd. Global Notes, 7.38%, 11/15/14		60,000		61,200

Invesco Van Kampen V.I. High Yield Fund

	Principal
	Amount		Value
Paper Products–(continued)
P.H. Glatfelter Co., Sr. Unsec. Gtd. Global Notes, 7.13%, 05/01/16	$	95,000	$	98,359
Sappi Papier Holding A.G. (Austria), Unsec. Gtd. Unsub. Notes, 6.75%, 06/15/12(b)		45,000		45,049
				292,670
Personal Products–0.19%
NBTY Inc., Sr. Gtd. Notes, 9.00%, 10/01/18(b)		35,000		37,363
Sabra Health Care L.P./Sabra Capital Corp., Sr. Gtd. Notes, 8.13%, 11/01/18(b)		20,000		20,725
				58,088
Pharmaceuticals–0.88%
Axcan Intermediate Holdings Inc., Sr. Unsec. Global Notes, 12.75%, 03/01/16		95,000		98,087
Elan Finance PLC/Corp. (Ireland), Sr. Gtd. Notes, 8.75%, 10/15/16(b)		100,000		101,750
Mylan Inc., Sr. Gtd. Notes, 6.00%, 11/15/18(b)		50,000		49,375
Valeant Pharmaceuticals International, Sr. Unsec. Gtd. Notes, 6.75%, 10/01/17(b)		10,000		9,975
7.00%, 10/01/20(b)		10,000		9,900
				269,087
Property & Casualty Insurance–0.67%
Crum & Forster Holdings Corp., Sr. Unsec. Global Notes, 7.75%, 05/01/17		125,000		131,250
XL Group PLC (Ireland), Series E, Jr. Sub. Variable Rate Global Pfd. Bonds, 6.50%(e)(f)		85,000		73,525
				204,775
Publishing–0.78%
Gannett Co. Inc., Sr. Unsec. Gtd. Global Notes, 8.75%, 11/15/14		15,000		16,837
9.38%, 11/15/17		200,000		223,000
				239,837
Railroads–0.37%
Kansas City Southern de Mexico S.A. de C.V. (Mexico), Sr. Unsec. Global Notes, 8.00%, 02/01/18		105,000		113,294
Real Estate Services–0.26%
CB Richard Ellis Services Inc., Sr. Unsec. Gtd. Notes, 6.63%, 10/15/20(b)		80,000		80,300
Regional Banks–1.08%
Regions Financial Corp., Unsec. Sub. Notes, 7.38%, 12/10/37		145,000		136,300
Zions Bancorp., Unsec. Sub. Notes, 5.50%, 11/16/15		200,000		195,000
				331,300
Research & Consulting Services–0.16%
FTI Consulting Inc., Sr. Gtd. Notes, 6.75%, 10/01/20(b)		50,000		49,875
Semiconductor Equipment–0.51%
Amkor Technology Inc., Sr. Unsec. Global Notes, 7.38%, 05/01/18		150,000		156,375
Semiconductors–1.74%
Advanced Micro Devices Inc., Sr. Unsec. Notes, 7.75%, 08/01/20(b)		30,000		31,200
Freescale Semiconductor Inc., Sr. Sec. Gtd. Notes, 9.25%, 04/15/18(b)		45,000		49,725
Sr. Unsec. Gtd. Notes, 10.75%, 08/01/20(b)		115,000		126,212
Sr. Unsec. Gtd. PIK Global Notes, 9.13%, 12/15/14		190,000		199,025
NXP BV/NXP Funding LLC (Netherlands), Sr. Sec. Gtd. Global Notes, 7.88%, 10/15/14		120,000		125,550
				531,712
Specialized Finance–1.90%
CIT Group Inc., Sr. Sec. Bonds, 7.00%, 05/01/17		580,000		582,900
Specialized REIT’s–0.42%
Host Hotels & Resorts Inc., Sr. Gtd. Notes, 6.00%, 11/01/20(b)		75,000		73,875
Omega Healthcare Investors Inc., Sr. Unsec. Gtd. Notes, 6.75%, 10/15/22(b)		55,000		54,588
				128,463
Specialty Chemicals–1.07%
Ferro Corp., Sr. Unsec. Notes, 7.88%, 08/15/18		95,000		100,463
Huntsman International LLC, Sr. Unsec. Gtd. Sub. Global Notes, 7.38%, 01/01/15		105,000		107,887
Nalco Co., Sr. Notes, 6.63%, 01/15/19(b)		25,000		25,625
PolyOne Corp., Sr. Unsec. Notes, 7.38%, 09/15/20		90,000		93,600
				327,575
Specialty Stores–0.65%
Michaels Stores Inc., Sr. Notes, 7.75%, 11/01/18(b)		25,000		24,938
Sr. Unsec. Gtd. Sub. Disc. Global Notes, 13.00%, 11/01/16(d)		175,000		172,812
				197,750
Steel–0.96%
AK Steel Corp., Sr. Unsec. Gtd. Notes, 7.63%, 05/15/20		110,000		111,100
FMG Resources Ltd., Sr. Notes, 6.38%, 02/01/16(b)		65,000		65,188
Steel Dynamics Inc., Sr. Unsec. Gtd. Global Notes, 7.75%, 04/15/16		40,000		42,400
United States Steel Corp., Sr. Unsec. Notes, 7.00%, 02/01/18		55,000		55,550
7.38%, 04/01/20		20,000		20,400
				294,638

Invesco Van Kampen V.I. High Yield Fund

	Principal
	Amount		Value
Systems Software–2.25%
Allen Systems Group Inc., Sr. Sec. Notes, 10.50%, 11/15/16(b)	$	205,000	$	210,125
Vangent Inc., Sr. Unsec. Gtd. Sub. Global Notes, 9.63%, 02/15/15		525,000		477,750
				687,875
Tires & Rubber–0.55%
Cooper Tire & Rubber Co., Sr. Unsec. Notes, 8.00%, 12/15/19		165,000		169,125
Trading Companies & Distributors–2.25%
Ashtead Capital Inc., Sr. Sec. Gtd. Notes, 9.00%, 08/15/16(b)		200,000		209,500
Avis Budget Car Rental LLC/Avis Budget Finance Inc., Sr. Unsec. Gtd. Notes, 8.25%, 01/15/19(b)		105,000		106,313
H&E Equipment Services Inc., Sr. Unsec. Gtd. Global Notes, 8.38%, 07/15/16		180,000		184,500
Hertz Corp. (The), Sr. Unsec. Gtd. Notes, 7.50%, 10/15/18(b)		180,000		188,550
				688,863
Wireless Telecommunication Services–5.70%
Clearwire Communications LLC/Clearwire Finance Inc., Sr. Sec. Gtd. Notes, 12.00%, 12/01/15(b)		225,000		244,125
Cricket Communications, Inc., Sr. Sec. Gtd. Global Notes, 7.75%, 05/15/16		115,000		120,031
Sr. Unsec. Gtd. Notes, 7.75%, 10/15/20(b)		85,000		81,600
Digicel Group Ltd. (Bermuda), Sr. Unsec. Notes, 8.88%, 01/15/15(b)		100,000		101,625
Digicel Ltd. (Bermuda), Sr. Notes, 8.25%, 09/01/17(b)		100,000		104,250
MetroPCS Wireless Inc., Sr. Unsec. Gtd. Notes, 7.88%, 09/01/18		65,000		67,316
6.63%, 11/15/20		95,000		90,725
SBA Telecommunications Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 08/15/19		85,000		93,075
Sprint Capital Corp., Sr. Unsec. Gtd. Global Notes, 6.90%, 05/01/19		385,000		384,519
6.88%, 11/15/28		20,000		17,525
Sprint Nextel Corp., Sr. Unsec. Notes, 8.38%, 08/15/17		150,000		160,125
Wind Acquisition Finance S.A. (Luxembourg), Sr. Sec. Gtd. Sub. Notes, 11.75%, 07/15/17(b)		250,000		281,250
				1,746,166
Total U.S. Dollar Denominated Bonds & Notes (Cost $25,909,069)				27,427,530
Non-U.S. Dollar Denominated Bonds & Notes–6.46%(g)
Canada–0.19%
Gateway Casinos & Entertainment Ltd., Sr. Sec. Gtd. Notes, 8.88%, 11/15/17(b)	CAD	55,000		57,182
Czech Republic–0.23%
CET 21 spol sro, Sr. Sec. Notes, 9.00%, 11/01/17(b)	EUR	50,000		69,154
Ireland–0.84%
Ardagh Packaging Finance PLC, Sr. Gtd. Notes, 9.25%, 10/15/20(b)	EUR	100,000		137,640
Bord Gais Eireann, Sr. Unsec. Medium-Term Euro Notes, 5.75%, 06/16/14	EUR	95,000		120,340
				257,980
Luxembourg–1.26%
Calcipar S.A., Sr. Unsec. Gtd. Floating Rate Notes, 2.09%, 07/01/14(b)(e)	EUR	75,000		90,702
ConvaTec Healthcare S.A., Sr. Sec. Notes, 7.38%, 12/15/17(b)	EUR	100,000		135,970
TMD Friction Finance S.A., Sr. Sec. Gtd. Bonds, 10.75%, 05/15/17(b)	EUR	115,000		157,502
				384,174
Netherlands–1.77%
Carlson Wagonlit B.V., Sr. Gtd. Floating Rate Notes, 6.80%, 05/01/15(b)(e)	EUR	100,000		128,954
EN Germany Holdings B.V., Sr. Sec. Gtd. Notes, 10.75%, 11/15/15(b)	EUR	100,000		137,511
Polish Television Holding B.V., Sr. Sec. Bonds, 11.25%, 05/15/17(b)(d)	EUR	50,000		69,157
Ziggo Bond Co. B.V., Sr. Sec. Gtd. Notes, 8.00%, 05/15/18(b)	EUR	150,000		207,462
				543,084
Spain–0.21%
Inaer Aviation Finance Ltd., Sr. Sec. Bonds, 9.50%, 08/01/17(b)	EUR	50,000		64,143
Sweden–0.24%
TVN Finance Corp II A.B., Sr. Unsec. Gtd. Notes, 10.75%, 11/15/17(b)	EUR	50,000		73,831
United Kingdom–1.72%
ITV PLC, Series 2005-1, Unsec. Gtd. Unsub. Medium-Term Euro Notes, 5.38%, 10/19/15	GBP	50,000		76,005
Series 2006-1 Tranche 1, Unsec. Gtd. Unsub. Medium-Term Euro Notes, 7.38%, 01/05/17	GBP	50,000		79,903
Kerling PLC, Sr. Sec. Gtd. Notes, 10.63%, 02/01/17(b)	EUR	50,000		72,495
Pipe Holdings PLC, Sr. Sec. Bonds, 9.50%, 11/01/15(b)	GBP	100,000		159,417
R&R Ice Cream Ltd., Sr. Sec. Notes, 8.38%, 11/15/17(b)	EUR	100,000		140,316
				528,136
Total Non-U.S. Dollar Denominated Bonds & Notes (Cost $1,980,016)				1,977,684

Invesco Van Kampen V.I. High Yield Fund

	Shares		Value
Preferred Stocks–1.05%
Diversified Banks–0.74%
Ally Financial, Inc., Series G, 7.00%–Pfd.		241	$	227,783
Other Diversified Financial Services–0.31%
Citigroup Capital XIII, 7.88% Variable Rate Pfd.(e)		3,550		95,358
Total Preferred Stocks (Cost $253,680)				323,141
Common Stocks–0.00%
Independent Power Producers & Energy Traders–0.00%
SW Acquisition L.P.(h) (Cost $0)		1		0
Money Market Funds–1.14%
Liquid Assets Portfolio–Institutional Class(i)		175,164		175,164
Premier Portfolio–Institutional Class(i)		175,164		175,164
Total Money Market Funds (Cost $350,328)				350,328
TOTAL INVESTMENTS–98.17% (Cost $28,493,093)				30,078,683
OTHER ASSETS LESS LIABILITIES–1.83%				560,975
NET ASSETS–100.00%			$	30,639,658

Investment Abbreviations:

CAD	– Canadian Dollar
Ctfs.	– Certificates
Cum	– Cumulative
Deb.	– Debentures
Disc.	– Discounted
EUR	– Euro
GBP	– British Pound
Gtd.	– Guaranteed
Jr.	– Junior
Pfd.	– Preferred
PIK	– Payment in Kind
REIT	– Real Estate Investment Trust
Sec.	– Secured
Sr.	– Senior
Sub.	– Subordinated
Unsec.	– Unsecured
Unsub.	– Unsubordinated

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at December 31, 2010 was $10,024,058, which represented 32.7% of the Fund’s Net Assets.
(c)	Defaulted security. Currently, the issuer is partially or fully in default with respect to interest payments. The value of this security at December 31, 2010 represented 0.3% of the Fund’s Net Assets.
(d)	Step coupon bond issued at discount. The interest rate represents the coupon rate at which the bond will accrue at a specified future date.
(e)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2010.
(f)	Perpetual bond with no specified maturity date.
(g)	Foreign denominated security. Principal amount is denominated in currency indicated.
(h)	Non-income producing security.
(i)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. High Yield Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $28,142,765)	$	29,728,355
Investments in affiliated money market funds, at value and cost		350,328
Total investments, at value (Cost $28,493,093)		30,078,683
Receivables for:
Investments sold		143,929
Fund shares sold		1,226
Dividends and interest		546,855
Investment for trustee deferred compensation and retirement plans		986
Total assets		30,771,679
Liabilities:
Payable for:
Investments purchased		33,683
Fund shares reacquired		11,732
Accrued fees to affiliates		45,238
Accrued other operating expenses		40,382
Trustee deferred compensation and retirement plans		986
Total liabilities		132,021
Net assets applicable to shares outstanding	$	30,639,658
Net assets consist of:
Shares of beneficial interest	$	49,180,326
Undistributed net investment income		2,784,606
Undistributed net realized gain (loss)		(22,910,722	)
Unrealized appreciation		1,585,448
	$	30,639,658
Net Assets:
Series I	$	30,628,600
Series II	$	11,058
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		2,582,214
Series II		934
Series I:
Net asset value per share	$	11.86
Series II:
Net asset value per share	$	11.84

Statement of Operations

For the years ended December 31, 2010

Investment income:
Interest (net of foreign withholding taxes of $130)	$	3,031,856
Dividends		10,841
Dividends from affiliated money market funds		5,236
Total investment income		3,047,933
Expenses:
Advisory fees		142,975
Administrative services fees		114,232
Custodian fees		9,989
Distribution fees — Series II		16
Transfer agent fees		5,525
Trustees’ and officers’ fees and benefits		7,654
Reports to shareholders		19,070
Professional services fees		37,640
Other		9,116
Total expenses		346,217
Less: Fees waived		(75,269	)
Net expenses		270,948
Net investment income		2,776,985
Realized and unrealized gain (loss) from:
Net realized gain from:
Investment securities		3,192,331
Foreign currencies		4,087
		3,196,418
Change in net unrealized appreciation (depreciation) of:
Investment securities		(2,008,476	)
Foreign currencies		(142	)
		(2,008,618	)
Net realized and unrealized gain		1,187,800
Net increase in net assets resulting from operations	$	3,964,785

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. High Yield Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	2,776,985		$	3,249,260
Net realized gain (loss)		3,196,418			(2,419,053	)
Change in net unrealized appreciation (depreciation)		(2,008,618	)		11,158,139
Net increase in net assets resulting from operations		3,964,785			11,988,346
Distributions to shareholders from net investment income — Series 1		(3,242,255	)		(2,924,346	)
Share transactions-net:
Series I		(8,963,988	)		1,303,400
Series II		10,000			—
Net increase (decrease) in net assets resulting from share transactions		(8,953,988	)		1,303,400
Net increase (decrease) in net assets		(8,231,458	)		10,367,400
Net assets:
Beginning of year		38,871,116			28,503,716
End of year (includes undistributed net investment income of $2,784,606 and $3,240,774, respectively)	$	30,639,658		$	38,871,116

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen V.I. High Yield Fund (the “Fund”), is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as High Yield Portfolio (the “Acquired Fund”), an investment portfolio of The Universal Institutional Funds, Inc. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund Class I shares received Series I shares of the Fund.

  Information for the Acquired Fund — Class I shares prior to the Reorganization is included with Series I shares of the Fund throughout this report.

  The Fund’s investment objective is above-average total return over a market cycle of three to five years by investing primarily in a diversified portfolio of high yield securities.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an

Invesco Van Kampen V.I. High Yield Fund

	independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Swap agreements are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end of day net present values, spreads, ratings, industry, and company performance.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Paydown gains and losses on mortgage and asset-backed securities are recorded as adjustments to interest income. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.

Invesco Van Kampen V.I. High Yield Fund

F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Lower-Rated Securities — The Fund may invest in lower-quality debt securities, i.e., “junk bonds”. Investments in lower-rated securities or unrated securities of comparable quality tend to be more sensitive to economic conditions than higher rated securities. Junk bonds involve a greater risk of default by the issuer because such securities are generally unsecured and are often subordinated to other creditors’ claims.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $500 million		0	.42%
Over $250 million		0	.345%
Next $250 million		0	.295%
Next $1 billion		0	.27%
Next $1 billion		0	.245%
Over $3 billion		0	.22%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee of $64,669 to Morgan Stanley Investment Management Inc. (“MS Investment Management”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed through at least June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 0.80% and Series II shares to 1.05% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Prior to the Reorganization, MS Investment Management had voluntarily agreed to waive fees and/or reimburse expenses of Class I shares to 0.80% of the Acquired Fund’s average daily net assets.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  Prior to the Reorganization, investment advisory fees paid by the Acquired Fund were reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class shares.

  For the year ended December 31, 2010, the Adviser and MSIM waived advisory fees of $72,612 and $2,657, respectively.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $29,315 for accounting and fund administrative services and reimbursed $46,643 for services provided by insurance companies. Prior to the Reorganization, the Acquired Fund paid an administration fee of $38,274 to MSIM and JPMorgan Investor Services Co.

Invesco Van Kampen V.I. High Yield Fund

  Also, the Trust has entered into service agreements whereby State Street Bank & Trust Company (“SSB”) serves as custodian, fund accountant and provide certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. Prior to the Reorganization, the Acquired Fund paid $154 to Morgan Stanley Services Company Inc., which served as the Acquired Fund’s transfer agent. For the year ended December 31, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	350,328	$	—	$	0	$	350,328
Corporate Debt Securities		—		29,728,355		—		29,728,355
	$	350,328	$	29,728,355	$	0	$	30,078,683

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $602 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

Invesco Van Kampen V.I. High Yield Fund

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	3,242,255	$	2,924,346

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	2,791,516
Net unrealized appreciation — investments		1,579,953
Net unrealized appreciation (depreciation) — other investments		(142	)
Temporary book/tax differences		(986	)
Post-October deferrals		(5,924	)
Capital loss carryforward		(22,905,085	)
Shares of beneficial interest		49,180,326
Total net assets	$	30,639,658

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 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 utilized $3,167,730 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2011	$	12,174,856
December 31, 2013		177,653
December 31, 2014		551,911
December 31, 2016		2,907,878
December 31, 2017		7,092,787
Total capital loss carryforward	$	22,905,085

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $35,599,468 and $43,429,625, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	1,698,841
Aggregate unrealized (depreciation) of investment securities		(118,888	)
Net unrealized appreciation of investment securities	$	1,579,953
Cost of investments for tax purposes is $28,498,730

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforward, on December 31, 2010, undistributed net investment income was increased by $9,102, undistributed net realized gain (loss) was increased by $6,651,739 and shares of beneficial interest decreased by $6,660,841. This reclassification had no effect on the net assets of the Fund.

Invesco Van Kampen V.I. High Yield Fund

NOTE 9—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		556,976		$	6,460,354			715,513		$	7,305,750
Series II(b		934			10,000			—			—
Issued as reinvestment of dividends:
Series I		303,014			3,242,255			289,253			2,924,346
Reacquired:
Series I		(1,579,418	)		(18,666,597	)		(860,646	)		(8,926,696	)
Net increase (decrease) in share activity		(718,494	)	$	(8,953,988	)		144,120		$	1,303,400

(a)

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 73% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

(b)

Commencement date of June 1, 2010.

Invesco Van Kampen V.I. High Yield Fund

NOTE 10—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																					Ratio of			Ratio of
																					expenses			expenses
					Net gains																to average			to average net			Ratio of net
	Net asset				(losses) on						Dividends										net assets			assets without			investment
	value,		Net		securities (both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income		unrealized)			operations			income			of period		return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/10	$	11.77	$	0.95	$	0.37		$	1.32		$	(1.23	)	$	11.86		12.11	%	$	30,629		0.80	%(c)		1.02	%(c)		8.15	%(c)		110	%
Year ended 12/31/09		9.03		0.99		2.68			3.67			(0.93	)		11.77		42.08			38,871		0.79	(d)		0.82	(d)		9.46	(d)(e)		78
Year ended 12/31/08		12.89		1.01		(3.77	)		(2.76	)		(1.10	)		9.03		(22.86	)		28,504		0.79	(d)		0.94	(d)		8.93	(d)(e)		50
Year ended 12/31/07		13.55		1.01		(0.46	)		0.55			(1.21	)		12.89		4.01			41,546		0.80	(d)		0.81	(d)		7.56	(d)(e)		32
Year ended 12/31/06(f)		13.59		0.96		(0.43	)		0.53			(0.57	)		13.55		8.62			52,962		0.80			0.87			7.13	(e)		26
Series II
Year ended 12/31/10(g)		10.71		0.53		0.60			1.13			—			11.84		10.55			11		1.05	(c)(h)		1.44	(c)(h)		7.90	(c)(h)		110

(a)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	Ratios are based on average daily net assets (000’s) of $34,036 and $11 for Series I and Series II shares, respectively.
(d)	The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is 0.0%, 0.01%, 0.01% and 0.00% for the years ended 2010, 2009, 2008 and 2007, respectively.
(e)	Ratio of net investment income to average net assets without fee waivers and/or expenses absorbed was 9.43%, 8.78%, 7.55%, 7.06% and 7.10% for the years ended December 31, 2009, 2008, 2007 and 2006, respectively.
(f)	On November 13, 2006, the Portfolio effected a reverse stock split as described in the Notes to Financial Statements. Per Share data prior to this date has been restated to give effect to the reverse stock split.
(g)	Commencement date of June 1, 2010.
(h)	Annualized.

NOTE 11—Significant Event

The Board of Trustees of the Trust unanimously approved an Agreement and Plan of Reorganization (“Agreement”) pursuant to the Fund would transfer all of its assets to Invesco V.I. High Yield Fund (“Acquiring Fund”), a series of the Trust. Upon closing of the reorganization, shareholders of the Fund will receive a corresponding class of shares of the Acquiring Fund in exchange for their shares of the Fund, and the Fund will liquidate and cease operations. The Agreement requires approval of the Fund’s shareholders.

NOTE 12—Change in Independent Registered Public Accounting Firm (unaudited)

The Fund is a new fund that was formed to acquire the assets and liabilities of a predecessor fund in a shell fund reorganization (the “Reorganization”). In connection with the organization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Invesco Van Kampen V.I. High Yield Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco Van Kampen V.I. High Yield Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen V.I. High Yield Fund, (formerly known as Universal Institutional Funds High Yield Portfolio; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 19, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco Van Kampen V.I. High Yield Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
			ACTUAL				(5% annual return before expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,091.10	$	4.20	$	1,021.19	$	4.06		0.80	%
Series II		1,000.00		1,091.20		5.51		1,019.93		5.33		1.05

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco Van Kampen V.I. High Yield 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	0%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco Van Kampen V.I. High Yield Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco Van Kampen V.I. International Growth Equity Fund

Annual Report to Shareholders n December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VK-VIIGE-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

As part of Invesco’s June 1, 2010, acquisition of Morgan Stanley’s retail asset management business, Universal Institutional Funds International Growth Equity Portfolio was reorganized as Invesco Van Kampen V.I. International Growth Equity Fund. Effective June 1, 2010, Clas Olsson, Barrett Sides, Steve Cao, Matt Dennis and Jason Holzer managed the Fund. A listing of your Fund’s managers appears later in this report.

     For the 12 months ended December 31, 2010, excluding variable product issuer charges, Series I shares delivered a double-digit gain and outperformed its benchmark, the MSCI EAFE Index. The Fund’s allocations in the Asia/Pacific region provided the largest positive contribution to this outperformance. Relative results also benefited from the Fund’s exposure to strong performing emerging market stocks, a segment of the market not represented in the MSCI EAFE Index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	10.02	%
Series II Shares	9.89
MSCI EAFE Index▼ (Broad Market Index)	7.75

^▼ Lipper Inc.

How we invest

When selecting stocks for your Fund, we employ a disciplined investment strategy that emphasizes fundamental research, supported by both quantitative analysis and portfolio construction techniques. Our EQV (earnings, quality, valuation) strategy focuses primarily on identifying quality companies that have experienced, or exhibit the potential for, accelerated or above-average earnings growth, but their stock prices have not fully reflected these attributes.

     While research responsibilities within the portfolio management team are focused by geographic region, we select

investments for the Fund using a bottom-up investment approach, which means we construct the Fund primarily on a stock-by-stock basis. We focus on the strengths of individual companies rather than sectors, countries or market-cap trends.

     We believe a disciplined sell decision is key to successful investing. We consider selling a stock for one of the following reasons:

n	A company’s fundamentals deteriorate or it posts disappointing earnings.
n	A stock’s price seems overvalued.
n	A more attractive opportunity becomes available.

Portfolio Composition

By sector

Consumer Discretionary	17.8	%
Health Care	14.1
Consumer Staples	13.5
Energy	10.3
Industrials	9.9
Financials	9.2
Information Technology	7.0
Telecommunication Services	5.1
Materials	3.2
Utilities	3.1
Money Market Funds Plus Other Assets
Less Liabilities	6.8

Total Net Assets	$32.2 million
Total Number of Holdings*		86

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.

Top 10 Industries

1.	Pharmaceuticals	10.4	%
2.	Integrated Oil & Gas	6.7
3.	Diversified Banks	5.3
4.	Packaged Foods & Meats	4.1
5.	Wireless Telecommunication Services	3.7
6.	Tobacco	3.2
7.	Food Retail	3.1
8.	Industrial Conglomerates	2.8
9.	Automobile Manufacturers	2.5
10.	Electrical Components & Equipment	2.3

Top Five Countries

1.	United Kingdom	21.4	%
2.	Japan	10.0
3.	Switzerland	7.8
4.	Australia	7.3
5.	Germany	6.7

Market conditions and your Fund

After rallying for much of 2009 on prospects of improving global economic conditions, global equity markets faced headwinds in early 2010. Notably, several southern European economies, including Greece, Spain, Portugal and Italy, faced solvency concerns amid massive fiscal deficits. Although the U.S. economy returned to a positive growth rate in 2009, investors continued to be concerned about high unemployment and a still-weak housing market. However, not all news was bad. Equity markets seemed to shrug off some of the macroeconomic burdens that pulled them into double-digit losses in the first half of 2010, ending the year with strong positive gains.

     Looking to Asian markets, the message was pretty simple — growth fundamentals remain stronger there than in the west. Although we see marginal differences in stock valuations, with slight premiums in some areas, we believe it is nothing overly concerning.

     Emerging markets, the biggest winners in 2010, saw exports slow down during the latter half of the period. The deceleration in exports was offset, however, by strong growth in retail and auto sales, as well as strong housing markets within emerging economies. The key driver for growth in domestic demand was low interest rates and underleveraged consumers.

     Turning to Europe, the European Central Bank (ECB) remained an interesting foil to the U.S. Federal Reserve (the Fed), as ECB officials showed little sign that they were willing to provide additional economic stimulus. Instead, they left the heavy global economic lifting to the Fed. As a result, we saw the slide in the euro’s value reverse during the first half of 2010. Europe’s solid performance during a period of marked volatility served as a useful reminder that, in general, when people focus disproportionately on macroeconomic or gross domestic product (GDP) trends in a market, equity markets can surprise investors when they move against conventional wisdom.

     In this environment, we continued to construct the Fund’s portfolio on a bottom-up basis, selecting stocks on an individual basis. Meaningful outperformance versus the MSCI EAFE Index came from the telecommunication services and industrials sectors.

     In the telecommunication services sector, strong stock selection, predominantly across Latin America focused

Invesco Van Kampen V.I. International Growth Equity Fund

wireless providers, led to outperformance versus the index. Top contributors included Mexico based America Movil and Millicom International Cellular (Luxembourg). Millicom International Cellular is no longer held by the Fund.

     Stock selection was the key driver of outperformance across the industrials sector as well. Particular strength was seen in the capital goods industry. Top contributors included Singapore-based Keppel, a global leader in offshore rig construction, and industry leader of robotics and factory automation solutions Fanuc (Japan).

     By contrast, despite delivering double-digit gains in the materials sector, the Fund’s continued underweight exposure was a drag on relative results. We question the ability of materials companies to maintain current returns and we are cautious about their ability to maintain capital discipline. The largest detractor over the period was Israel-based Teva Pharmaceuticals.

     In broad geographic terms, the Fund saw meaningful outperformance in both Europe and Asia. Exposure to emerging markets, markets not included in the index, was supportive as well as this segment of the market saw significant gains during the reporting period. By contrast, relative gains were modestly offset by the negative impact of stock selection in Sweden and the Netherlands. A meaningful underweight in Japan detracted from relative results as well.

     Stock selection in the portfolio was driven by the underlying fundamentals of a company, not any top-down macroeconomic views. That being said, our belief in the strength of consumer growth outside the U.S. explains the Fund’s overweight exposure to the consumer discretionary sector. Similarly, healthy technology spending over the last several months of 2010 was supportive of our overweight exposure to the information technology sector.

     Following strong market performance in the second half of 2010, investor sentiment rose to the high end of historic norms supported by low interest rates, ample liquidity and improving global GDP outlooks versus this time last year. At the same time, the risks of tighter monetary policy in robust emerging market economies and the lingering sovereign debt situation in Europe means investors should be prepared for volatility. At the close of the reporting period, we remained focused on investing according to our fundamentally driven investment process and maintaining our long-term investment view. We

thank you for your continued investment in Invesco Van Kampen V.I. International Growth Equity Fund.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Clas Olsson
Chartered Financial Analyst, portfolio manager, is co-lead manager of Invesco Van Kampen V.I. International Growth Equity Fund. Mr. Olsson joined Invesco in 1994. He earned a B.B.A. from The University of Texas at Austin.

Barrett Sides
Portfolio manager, is co-lead manager of Invesco Van Kampen V.I. International Growth Equity Fund. Mr. Sides joined Invesco in 1990. He began his investment career in 1989. Mr. Sides earned a B.S. in economics from Bucknell University and an M.B.A. in international business from the University of St. Thomas.

Shuxin (Steve) Cao
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. International Growth Equity Fund. Mr. Cao joined Invesco in 1997. He earned a B.A. in English from the Tianjiin Foreign Language Institute and an M.B.A. from Texas A&M University. Mr. Cao is a Certified Public Accountant.

Matthew Dennis
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. International Growth Equity Fund. Mr. Dennis joined Invesco in 2000. He began his investment career in 1994. Mr. Dennis earned a B.A. in economics from The University of Texas at Austin and a M.S. in finance from Texas A&M University.

Jason Holzer
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. International Growth Equity Fund. Mr. Holzer joined Invesco in 1996. He began his investment career in 1994. Mr. Holzer earned a B.A. in quantitative economics and a M.S. in engineering-economic systems from Stanford University.

Invesco Van Kampen V.I. International Growth Equity Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Fund data from 4/28/06, index data from 4/30/06

Past performance cannot guarantee comparable future results.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception		-0.89	%
	1 Year	10.02
Series II Shares
Inception (4/28/06)		-0.91	%
	1 Year	9.89

Effective June 1, 2010, Class II shares of the predecessor fund advised by Morgan Stanley Investment Management Inc. were reorganized into Series II shares of Invesco Van Kampen V.I. International Growth Equity Fund. Returns shown above for Series II shares are blended returns of the predecessor fund and Invesco Van Kampen V.I. International Growth Equity Fund. Share class returns will differ from the predecessor fund because of different expenses.

     Series I shares incepted on June 1, 2010. Series I shares performance shown prior to that date is that of the predecessor fund’s Class II shares and includes the 12b-1 fees applicable to the predecessor fund’s Class II shares. Class II shares performance reflects any applicable fee waivers or expense reimbursements. The inception date of the predecessor fund’s Class II shares is April 28, 2006.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.11% and 1.36%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.18% and 1.43%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco Van Kampen V.I. International Growth Equity Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable

Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses in the past, performance would have been lower.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco Van Kampen V.I. International Growth Equity Fund

Invesco Van Kampen V.I. International Growth Equity Fund’s investment objective is long-term capital appreciation, with a secondary objective of income.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

In general, prices of equity securities are more volatile than those of fixed income securities. Prices of equity securities will rise and fall in response to events that affect entire financial markets or industries and to events that affect particular issuers.

     The risks of investing in securities of foreign issuers can include fluctuations in foreign currencies, foreign currency exchange controls, political and economic instability, differences in financial reporting, differences in securities regulation and trading, and foreign taxation issues.

     The adviser may invest in certain instruments, such as derivatives, and the portfolio managers may use certain techniques, such as hedging, to manage these risks. However, the adviser cannot guarantee that it will be practical to hedge these risks in certain markets or under particular conditions or that it will succeed in doing so. The adviser may use derivatives for other purposes, such as gaining exposure to foreign markets.

     While a substantial portion of the Fund’s assets generally are invested in the developed countries of Europe and the Far East, the Fund may invest up to 15% of its assets in securities of issuers in emerging market or developing countries. The Fund may invest up to 20% of its assets in debt securities issued or guaranteed by non-U.S. governments, but will invest only in securities issued or guaranteed by the governments of countries which are members of the Organization for Economic Co-operation and Development (OECD). The Fund may purchase and sell certain derivative instruments, such as options, futures contracts, options on futures contracts, structured investments and currency-related transactions involving options, futures contracts, forward contracts and swaps, and may purchase contracts for difference (CFDs), for various portfolio management purposes, including to facilitate portfolio management and to mitigate risks.

     Under normal market conditions, the Fund invests at least 80% of its assets in equity securities of issuers from at least three different foreign countries. Derivative instruments used by the Fund will be counted toward the 80% policy to

the extent they have economic characteristics similar to the securities included within that policy. This policy may be changed without shareholder approval; however, you will be notified in writing of any changes.

     The Fund considers an issuer to be from a particular country if (i) its principal securities trading market is in that country; (ii) alone or on a consolidated basis it derives 50% or more of its annual revenue from either goods produced, sales made or services performed in that country; or (iii) it is organized under the laws of, or has a principal office in that country. By applying these tests, it is possible that a particular issuer could be deemed to be from more than one country.

     The Fund may invest in the equity securities of any company regardless of market capitalization size. Investing in the securities of smaller companies involves greater risk and price volatility than investing in larger, more established firms. In addition, such companies typically are subject to a greater degree of change in earnings and business prospects than are larger companies.

About indexes used in this report

The MSCI EAFE^® Index is an unmanaged index considered representative of stocks of Europe, Australasia and the Far East.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     CPA^® and Certified Public Accountant^® are trademarks owned by the American Institute of Certified Public Accountants.

     Industry classifications used in this report are generally classified 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco Van Kampen V.I. International Growth Equity Fund

Schedule of Investments

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–93.18%
Australia–7.32%
BHP Billiton Ltd.		14,344	$	666,779
Cochlear Ltd.		5,228		429,211
CSL Ltd.		8,896		329,649
QBE Insurance Group Ltd.		13,528		251,131
Woolworths Ltd.		8,139		224,513
WorleyParsons Ltd.		16,671		455,946
				2,357,229
Belgium–1.67%
Anheuser-Busch InBev N.V.		9,381		536,537
Brazil–1.88%
Banco Bradesco S.A.–ADR		18,688		379,180
Petroleo Brasileiro S.A.–ADR		6,634		226,684
				605,864
Canada–5.35%
Canadian National Railway Co.		2,323		155,015
Canadian Natural Resources Ltd.		6,973		311,025
Cenovus Energy Inc.		8,823		295,313
Encana Corp.		6,592		192,861
Fairfax Financial Holdings Ltd.		628		258,318
Suncor Energy, Inc.		8,136		313,232
Talisman Energy Inc.		8,895		197,885
				1,723,649
China–1.12%
Industrial and Commercial Bank of China Ltd.–Class H		483,000		359,258
Denmark–1.83%
Novo Nordisk A.S.–Class B		5,226		588,212
France–5.18%
AXA S.A.		10,490		175,053
BNP Paribas		5,585		356,550
Cie Generale des Etablissements Michelin–Class B		2,146		154,355
Danone S.A.		4,880		306,626
Eutelsat Communications		5,422		198,453
Publicis Groupe		3,559		185,700
Total S.A.		5,472		290,582
				1,667,319
Germany–6.71%
Adidas AG		6,424		419,694
Bayer AG		4,464		329,880
Bayerische Motoren Werke AG		6,287		494,421
Fresenius Medical Care AG & Co. KGaA		5,008		289,305
Puma AG Rudolf Dassler Sport		961		318,480
SAP AG		6,043		307,669
				2,159,449
Hong Kong–1.77%
Hutchison Whampoa Ltd.		35,000		360,231
Li & Fung Ltd.		36,310		210,681
				570,912
India–1.52%
India Fund, Inc.(a)		3,200		112,352
Infosys Technologies Ltd.–ADR		4,960		377,357
				489,709
Israel–2.09%
Teva Pharmaceutical Industries Ltd.–ADR		12,912		673,103
Japan–9.96%
Canon Inc.		6,100		312,714
Denso Corp.		8,100		279,544
Fanuc Corp.		4,000		614,361
Keyence Corp.		1,100		318,018
Komatsu Ltd.		9,837		297,691
Nidec Corp.		7,195		725,506
Toyota Motor Corp.		7,600		299,282
Yamada Denki Co., Ltd.		5,280		360,281
				3,207,397
Mexico–2.80%
America Movil S.A.B. de C.V., Series L–ADR		8,348		478,674
Fomento Economico Mexicano, S.A.B. de C.V.–ADR		2,883		161,217
Grupo Televisa S.A.–ADR		10,145		263,060
				902,951
Netherlands–3.90%
Koninklijke (Royal) KPN N.V.		20,855		304,575
Koninklijke Ahold N.V.		24,699		326,191
TNT N.V.		11,950		315,898
Unilever N.V.		9,951		309,834
				1,256,498
Philippines–0.85%
Philippine Long Distance Telephone Co.		4,675		272,539
Russia–0.84%
Gazprom OAO–ADR		10,684		269,771

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. International Growth Equity Fund

	Shares		Value
Singapore–2.94%
Keppel Corp. Ltd.		62,238	$	548,981
United Overseas Bank Ltd.		28,000		397,086
				946,067
South Korea–1.91%
Hyundai Mobis		1,628		408,112
NHN Corp.(a)		1,031		205,730
				613,842
Sweden–1.60%
Kinnevik Investment A.B.–Class B		7,881		160,534
Telefonaktiebolaget LM Ericsson–Class B		14,685		170,048
Volvo A.B.–Class B(a)		10,389		185,161
				515,743
Switzerland–7.78%
Julius Baer Group Ltd.		6,662		312,081
Nestle SA		11,744		687,683
Novartis AG		8,240		484,879
Roche Holding AG		4,589		672,399
Syngenta AG		1,185		347,097
				2,504,139
Taiwan–1.78%
Hon Hai Precision Industry Co., Ltd.		54,880		220,825
Taiwan Semiconductor Manufacturing Co. Ltd.		144,000		350,659
				571,484
Turkey–0.65%
Akbank T.A.S.		37,535		208,863
United Kingdom–21.37%
BG Group PLC		21,024		425,385
British American Tobacco PLC		10,873		418,594
Centrica PLC		86,362		446,842
Compass Group PLC		66,446		601,888
Imperial Tobacco Group PLC		19,661		603,256
Informa PLC		45,527		289,246
International Power PLC		80,968		552,410
Kingfisher PLC		75,697		311,233
Next PLC		9,529		293,417
Reckitt Benckiser Group PLC		5,658		310,952
Reed Elsevier PLC		38,628		326,116
Royal Dutch Shell PLC–Class B		10,259		339,424
Shire PLC		25,264		608,258
Smith & Nephew PLC		13,724		144,218
Tesco PLC		67,187		445,190
Vodafone Group PLC		174,904		455,396
WPP PLC		25,075		309,840
				6,881,665
United States–0.36%
VimpelCom Ltd.–ADR		7,804		117,372
Total Common Stocks & Other Equity Interests (Cost $24,114,880)				29,999,572
Money Market Funds–5.79%
Liquid Assets Portfolio–Institutional Class(b)		932,612		932,612
Premier Portfolio–Institutional Class(b)		932,612		932,612
Total Money Market Funds (Cost $1,865,224)				1,865,224
TOTAL INVESTMENTS–98.97% (Cost $25,980,104)				31,864,796
OTHER ASSETS LESS LIABILITIES–1.03%				332,463
NET ASSETS–100.00%			$	32,197,259

Investment Abbreviations:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

(a)	Non-income producing security.
(b)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. International Growth Equity Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $24,114,880)	$	29,999,572
Investments in affiliated money market funds, at value and cost		1,865,224
Total investments, at value (Cost $25,980,104)		31,864,796
Foreign currencies, at value (Cost $14,480)		14,840
Receivable for:
Fund shares sold		166,235
Dividends		346,949
Fund expenses absorbed		6,558
Investment for trustee deferred compensation and retirement plans		1,101
Total assets		32,400,479
Liabilities:
Payable for:
Fund shares reacquired		9,212
Accrued fees to affiliates		114,041
Accrued other operating expenses		78,258
Trustee deferred compensation and retirement plans		1,709
Total liabilities		203,220
Net assets applicable to shares outstanding	$	32,197,259
Net assets consist of:
Shares of beneficial interest	$	70,987,447
Undistributed net investment income		795,015
Undistributed net realized gain (loss)		(45,367,517	)
Unrealized appreciation		5,782,314
	$	32,197,259
Net assets:
Series I	$	12,601
Series II	$	32,184,658
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		1,381
Series II		3,530,610
Series I:
Net asset value per share	$	9.12
Series II:
Net asset value per share	$	9.12

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $598,971)	$	4,487,804
Dividends from affiliated money market funds (includes securities lending income of $91,008)		95,426
Total investment income		4,583,230
Expenses:
Advisory fees		1,114,502
Administrative services fees		404,710
Custodian fees		110,238
Distribution fees — Series II		483,368
Transfer agent fees		4,435
Trustees’ and officers’ fees and benefits		12,655
Other		77,355
Total expenses		2,207,263
Less: Fees waived		(200,999	)
Net expenses		2,006,264
Net investment income		2,576,966
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		15,195,054
Foreign currencies		(892,001	)
		14,303,053
Change in net unrealized appreciation (depreciation) of:
Investment securities (net of foreign taxes of $(137,757))		(41,131,733	)
Foreign currencies		32,575
		(41,099,158	)
Net realized and unrealized gain (loss)		(26,796,105	)
Net increase (decrease) in net assets resulting from operations	$	(24,219,139	)

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. International Growth Equity Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	2,576,966		$	2,522,003
Net realized gain (loss)		14,303,053			(42,773,620	)
Change in net unrealized appreciation (depreciation)		(41,099,158	)		109,386,939
Net increase (decrease) in net assets resulting from operations		(24,219,139	)		69,135,322
Distributions to shareholders from net investment income — Series II		(4,058,030	)		(1,504,257	)
Share transactions-net:
Series I		10,000			—
Series II		(200,817,062	)		52,070,991
Net increase (decrease) in net assets resulting from share transactions		(200,807,062	)		52,070,991
Net increase (decrease) in net assets		(229,084,231	)		119,702,056
Net assets:
Beginning of year		261,281,490			141,579,434
End of year (includes undistributed net investment income of $795,015 and $2,558,883, respectively)	$	32,197,259		$	261,281,490

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen V.I. International Growth Equity Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as Universal Institutional Funds International Growth Equity Portfolio (the “Acquired Fund”), an investment portfolio of The Universal Institutional Funds, Inc. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class II shares received Series II shares of the Fund. Information for the Acquired Fund’s Class II shares prior to the Reorganization is included with Series II shares of the Fund throughout this report.

  The Fund’s investment objective is long-term capital appreciation, with a secondary objective of income.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.

Invesco Van Kampen V.I. International Growth Equity Fund

	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.

Invesco Van Kampen V.I. International Growth Equity Fund

G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $1 billion		0	.75%
Over $1 billion		0	.70%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee of $837,127 to Morgan Stanley Investment Management Inc. (“MSIM”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed, through at least June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursements (excluding certain items discussed below) of Series I shares to 1.11% and Series II shares to 1.36% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursements to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

Invesco Van Kampen V.I. International Growth Equity Fund

  Prior to the Reorganization, MS Investment Management had voluntarily agreed to waive fees and/or reimburse expenses of Class II shares to 1.35% of the Acquired Fund’s average daily net assets.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds. Prior to the Reorganization, investment advisory fees paid by the Acquired Fund were reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class shares.

  For the year ended December 31, 2010, the Adviser and MSIM waived advisory fees of $85,279 and $4,286, respectively.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $29,316 for accounting and fund administrative services and reimbursed $92,914 for services provided by insurance companies. Prior to the Reorganization, the Acquired Fund paid an administration fee of $282,480 to MSIM and JPMorgan Investor Services Co.

  Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian, fund accountant and provides certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. Prior to the Acquired Fund paid $755 to Morgan Stanley Services Company Inc., which served as the Acquired Fund’s transfer agent. For the year ended December 31, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund.

  Prior to the Reorganization, the Acquired Fund paid distribution fees to Morgan Stanley Distribution, Inc. (“MSDI”) based on the annual rate of 0.35% of the Acquired Fund’s average daily net assets of Class II shares. MSDI had voluntarily agreed to waive 0.10% distribution fee that it received from the Acquired Fund. MSDI was paid distribution fees of $279,036 after fee waivers of $111,434.

  For the year ended December 31, 2010, expenses incurred under the Plans are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1*		Level 2*		Level 3		Total
Australia	$	931,590	$	1,425,639	$	—	$	2,357,229
Belgium		536,537		—		—		536,537
Brazil		605,864		—		—		605,864
Canada		1,723,649		—		—		1,723,649
China		—		359,258		—		359,258
Denmark		—		588,212		—		588,212

Invesco Van Kampen V.I. International Growth Equity Fund

	Level 1*		Level 2*		Level 3		Total
France		505,079		1,162,240		—		1,667,319
Germany		2,159,449		—		—		2,159,449
Hong Kong		570,912		—		—		570,912
India		489,709		—		—		489,709
Israel		673,103		—		—		673,103
Japan		1,551,877		1,655,520		—		3,207,397
Mexico		902,951		—		—		902,951
Netherlands		309,834		946,664		—		1,256,498
Philippines		272,539		—		—		272,539
Russia		269,771		—		—		269,771
Singapore		946,067		—		—		946,067
South Korea		408,112		205,730		—		613,842
Sweden		160,534		355,209		—		515,743
Switzerland		2,504,139		—		—		2,504,139
Taiwan		350,659		220,825		—		571,484
Turkey		—		208,863		—		208,863
United Kingdom		3,422,475		3,459,190		—		6,881,665
United States		1,982,596		—		—		1,982,596
Total Investments	$	21,277,446	$	10,587,350	$	—	$	31,864,796

*  Transfers occurred between Level 1 and Level 2 due to foreign fair value adjustments.

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $649 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	4,058,030	$	1,504,257

Invesco Van Kampen V.I. International Growth Equity Fund

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	796,625
Net unrealized appreciation — investments		4,564,793
Net unrealized appreciation (depreciation) — other investments		(102,378	)
Temporary book/tax differences		(1,610	)
Capital loss carryforward		(44,047,618	)
Shares of beneficial interest		70,987,447
Total net assets	$	32,197,259

  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 utilized $4,408,363 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	3,855,851
December 31, 2017		40,191,767
Total capital loss carryforward	$	44,047,618

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $235,526,681 and $444,186,345, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	4,606,463
Aggregate unrealized (depreciation) of investment securities		(41,670	)
Net unrealized appreciation of investment securities	$	4,564,793
Cost of investments for tax purposes is $27,300,003.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, on December 31, 2010, undistributed net investment income was decreased by $282,804 and undistributed net realized gain (loss) was increased by $282,804. This reclassification had no effect on the net assets of the Fund.

Invesco Van Kampen V.I. International Growth Equity Fund

NOTE 9—Share Information

	Summary of Share Activity
	Year ended						Year ended
	December 31, 2010(a)						December 31, 2009
	Shares			Amount			Shares			Amount
Sold:
Series I(b)		1,381		$	10,000			—		$	—
Series II		7,372,498			59,847,503			22,088,682			147,987,747
Issued as reinvestment of dividends:
Series I(b)		—			—			—			—
Series II		549,124			4,058,030			223,183			1,504,257
Reacquired:
Series I(b)		—			—			—			—
Series II		(35,429,507	)		(264,722,595	)		(14,026,147	)		(97,421,013	)
Net increase (decrease) in share activity		(27,506,504	)	$	(200,807,062	)		8,285,718		$	52,070,991

(a)

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 95% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

(b)

Commencement date of June 1, 2010.

NOTE 10—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																											Ratio of			Ratio of
																											expenses			expenses
					Net gains																						to average			to average net			Ratio of net
	Net asset				(losses) on						Dividends			Distributions													net assets			assets without			investment
	value,		Net		securities (both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			Distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10(d)	$	7.24	$	0.10	$	1.78		$	1.88		$	—		$	—		$	—		$	9.12		25.97	%	$	13		1.11	%(e)(f)		1.17	%(e)(f)		1.97	%(e)(f)		173	%
Series II
Year ended 12/31/10		8.42		0.14		0.68			0.82			(0.12	)		—			(0.12	)		9.12		10.02			32,185		1.36	(e)		1.49	(e)		1.72	(e)		173
Year ended 12/31/09		6.22		0.09		2.17			2.26			(0.06	)		—			(0.06	)		8.42		36.54			261,281		1.35	(g)		1.49	(g)		1.29	(g)(h)		57
Year ended 12/31/08		12.11		0.13		(6.00	)		(5.87	)		(0.00	)(i)		(0.02	)		(0.02	)		6.22		(48.52	)		141,579		1.35	(g)		1.53	(g)		1.51	(g)(h)		40
Year ended 12/31/07		10.84		0.03		1.52			1.55			(0.02	)		(0.26	)		(0.28	)		12.11		14.26			57,419		1.35	(g)		1.84	(g)		0.29	(g)(h)		52
Year ended 12/31/06(d)		10.00		0.03		0.82			0.85			(0.01	)		—			(0.01	)		10.84		8.55			9,993		1.35	(f)		3.95	(f)		0.38	(f)(h)		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. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Commencement date of June 1, 2010 and April 28, 2006 for Series I and Series II shares, respectively.
(e)	Ratios are based on average daily net assets (000’s) of $11 and $148,593 for Series I and Series II shares, respectively.
(f)	Annualized.
(g)	Ratios reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios was less than 0.005% for the years ended December 31, 2009, December 31, 2008 and December 31, 2007, respectively.
(h)	Ratio of net investment income to average net assets without fee waivers and/or expenses absorbed was 1.15%, 1.33%, (0.20)% and (2.23)% for the years ended December 31, 2009 through December 31, 2006, respectively.
(i)	Amount is less than $0.005 per share.

NOTE 11—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco V.I. International Growth Fund (the “Acquiring Fund”) in exchange for shares of the Acquiring Fund. The Agreement requires approval of the Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

Invesco Van Kampen V.I. International Growth Equity Fund

NOTE 12—Change in Independent Registered Public Accounting Firm (unaudited)

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Invesco Van Kampen V.I. International Growth Equity Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco Van Kampen V.I. International Growth Equity Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen V.I. International Growth Equity Fund, (formerly known as Universal Institutional Funds International Growth Equity Portfolio; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, the results of its operations, the changes in its net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 19, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco Van Kampen V.I. International Growth Equity Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,229.10	$	6.24	$	1,019.61	$	5.65		1.11	%
Series II		1,000.00		1,227.80		7.64		1,018.35		6.92		1.36

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco Van Kampen V.I. International Growth 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	0%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco Van Kampen V.I. International Growth Equity Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco Van Kampen V.I. Mid Cap Growth Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VK-VIMCG-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

On June 1, 2010, Paul Rasplicka and Brent Lium took over management responsibilities for the Fund. A listing of your Fund’s managers appears later in this report.

     For the year ended December 31, 2010, Invesco Van Kampen V.I. Mid Cap Growth Fund had positive double-digit returns and performed in line with the Fund’s broad market/style-specific benchmark, the Russell Midcap Growth Index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	26.96	%
Series II Shares	27.27
Russell Midcap Growth Index▼ (Broad Market/Style-Specific Index)	26.38

^▼ Lipper Inc.

How we invest

We believe a growth investment strategy is an essential component of a diversified portfolio.

     Our investment process combines fundamental and quantitative analysis to uncover companies exhibiting long-term, potentially sustainable revenue, earnings and cash flow growth that is not yet reflected by the stock’s market price.

     Our quantitative model ranks companies based on a set of fundamental, valuation and timeliness factors. This quantitative model is designed to identify stocks with the highest probability of meeting our team’s investment criteria. Stocks that are ranked highest by our quantitative model are the focus of our fundamental research efforts.

     Our fundamental analysis focuses on identifying companies and industries with strong drivers of growth. To accomplish this goal, we develop a fully integrated financial model to gain a more complete understanding of the financial health of each investment candidate. Additionally, our research involves due diligence of the company, which includes a detailed

analysis of the strategic plans of the company’s management team. We also analyze key competitors, customers and suppliers to assess the overall attractiveness and growth potential of the industry.

     Risk management plays an important role in portfolio construction, as our target portfolio attempts to limit volatility and downside risk. We seek to accomplish this goal by investing in sectors, industries and companies with attractive fundamental prospects. We limit the Fund’s sector exposure and also seek to minimize stock-specific risk by building a diversified portfolio. (Diversification does not guarantee a profit or eliminate the risk of a loss.)

     We consider selling a stock for any of the following reasons:

n	There is a change in fundamentals, market capitalization or deterioration in the timeliness profile.
n	The price target set at purchase has been reached.
n	The investment thesis is no longer valid.
n	Insider selling indicates potential issues.

Market conditions and your Fund

The U.S. economy showed signs of improvement in 2010, potentially indicating that the economy had transitioned from a contraction phase into an expansionary phase. Nevertheless, the pace of recovery remained modest, and the transition from government stimulus-induced growth to private economic recovery was uncertain.

     The U.S. Federal Reserve’s (the Fed) federal funds target rate remained low in a range of zero to 0.25%.¹`Real gross domestic product (GDP) registered positive growth during the reporting period with annualized increases of 3.7%, 1.7% and 2.6% for the first, second and third quarters of 2010, respectively.² Inflation, measured by the seasonally adjusted Consumer Price Index, remained relatively benign. While labor markets improved as layoffs moderated, new hiring remained quite weak. Unemployment, after climbing steadily throughout 2009, fell slightly during 2010 to a rate of 9.4% nationwide as of December 2010.³

     While stock market volatility increased signifycantly during the year, indexes measuring the performance of large-, mid- and small-cap stocks finished the period with positive, double-digit returns. In terms of investment style, growth stocks outperformed value stocks. The sectors with the highest returns in the Russell Midcap Growth Index included more economically sensitive sectors such as consumer discretionary, industrials, materials and information technology (IT). Conversely, the utilities sector was the only sector with a negative return during the period.

     The Fund had double-digit absolute returns, and performed in line versus the Russell Midcap Growth Index during

Portfolio Composition

By sector

Information Technology	20.0	%
Industrials	19.0
Consumer Discretionary	18.2
Health Care	10.5
Financials	10.3
Energy	8.0
Materials	7.0
Consumer Staples	3.0
Telecommunication Services	1.8
Money Market Funds
Plus Other Assets Less Liabilities	2.2

Top 10 Equity Holdings*

1.	iShares Russell Midcap Growth
	Index Fund	2.3	%
2.	iShares S&P Midcap 400 Growth
	Index Fund	2.0
3.	AGCO Corp.	1.8
4.	Pioneer Natural Resources Co.	1.7
5.	Rovi Corp.	1.6
6.	BorgWarner, Inc.	1.6
7.	MGM Resorts International	1.5
8.	Nordstrom, Inc.	1.5
9.	Crown Holdings, Inc.	1.5
10.	Concho Resources, Inc.	1.5

Top Five Industries

1.	Oil & Gas Exploration & Production	5.3	%
2.	Investment Companies	4.3
3.	Semiconductors	4.1
4.	Specialty Chemicals	4.0
5.	Hotels, Resorts & Cruise Lines	3.2

Total Net Assets	$79.5 million
Total Number of Holdings*		97

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.

Invesco Van Kampen V.I. Mid Cap Growth Fund

the fiscal year. The Fund outperformed by the widest margin in the IT, utilities and energy sectors. Some of this outperformance was offset by underperformance in other sectors, including financials, consumer discretionary and materials.

     The Fund outperformed the Russell Midcap Growth Index by the widest margin in the IT sector, driven by stock selection. The leading contributor to overall Fund performance was Chinese Internet search engine provider Baidu. We sold this holding. Other key contributors to Fund performance in this sector included Internet services provider Akamai Technologies and customer relationship software maker Salesforce.com.

     Outperformance in the utilities sector was driven by an underweight position. The Fund had no exposure in the utilities sector during the year. This was a benefit to performance as the utilities sector was the weakest performing sector in the Russell Midcap Growth Index for the year.

     The Fund also outperformed in the energy sector. Outperformance was due to both stock selection and an overweight position. Holdings that made solid contributions to performance included oil and gas exploration and production firms Concho Resources and Oasis Petroleum, as well as coal producer Alpha Natural Resources.

     Some of this outperformance was offset by underperformance in other sectors. The Fund underperformed by the widest margin in the financials sector due to stock selection. Key detractors to performance included credit rating services provider Moody’s and insurance and investment services provider Genworth Financial. We sold Genworth Financial.

     Underperformance in the consumer discretionary sector was also driven by stock selection. Within this sector, detractors from performance included online travel services provider Priceline.com as well as for-profit education services providers Capella Education and Strayer Education. While we continued to own Capella Education and Strayer Education, we sold Priceline.com due to deteriorating fundamentals.

     Another area of weakness for the Fund was the materials sector, where the Fund’s holdings generally underperformed those of the Russell Midcap Growth Index. Within this sector, holdings that detracted from performance included glass container manufacturer Owens-Illinois and water treatment chemical maker Nalco Holding.

     During the year, the most significant changes to Fund positioning included an increase in the industrials and consumer staples sectors and a decrease in the consumer discretionary sector.

     As we’ve discussed, the stock market experienced significant volatility during the year. We would like to caution investors against making investment decisions based on short-term performance. As always, we recommend that you consult a financial adviser to discuss your individual financial program. We thank you for your commitment to Invesco Van Kampen V.I. Mid Cap Growth Fund.

1  U.S. Federal Reserve

2  Bureau of Economic Analysis

3  Bureau of Labor Statistics

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Paul Rasplicka
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco Van Kampen V.I. Mid Cap Growth Fund. He began his investment career in 1982 and joined Invesco in 1998. Mr. Rasplicka is a magna cum laude graduate of the University of Colorado at Boulder with a B.S. in business administration. He earned an M.B.A. from the University of Chicago. He is also a Charted Investment Counselor.

Brent Lium
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Mid Cap Growth Fund. He joined Invesco in 2003. Mr. Lium earned a B.B.A. from Texas A&M University and an M.B.A. from The University of Texas at Austin.

Invesco Van Kampen V.I. Mid Cap Growth Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Fund data from 9/25/00, index data from 9/30/00

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $3,000 and $6,000 is the same size as the space between $6,000 and $12,000.

Average Annual Total Returns

As of 12/31/10

Series I Shares
	10	Years	-0.40	%
	5	Years	5.43
	1	Year	26.96
Series II Shares
Inception (9/25/00)			-3.17	%
	10	Years	-0.38
	5	Years	5.48
	1	Year	27.27

Effective June 1, 2010, Class II shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Series II shares, respectively, of Invesco Van Kampen V.I. Mid Cap Growth Fund. Returns shown above for Series II shares are blended returns of the predecessor fund and Invesco Van Kampen V.I. Mid Cap Growth Fund. Share class returns will differ from the predecessor fund because of different expenses.

     Series I shares incepted on June 1, 2010. Series I shares performance shown prior to that date is that of the predecessor fund’s Class II shares and includes the 12b-1 fees applicable to the predecessor fund’s Class II shares. Class II shares performance reflects any applicable fee waivers or expense

reimbursements. The inception date of the predecessor fund’s Class II shares is September 25, 2000.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.01% and 1.26%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.56% and 1.81%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco Van Kampen V.I. Mid Cap Growth Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/ or reimbursed expenses in the past, performance would have been lower.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco Van Kampen V.I. Mid Cap Growth Fund

Invesco Van Kampen V.I. Mid Cap Growth Fund’s investment objective is to seek capital growth.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

The prices of and the income generated by the Fund’s securities may decline in response to, among other things, investor sentiment; general economic and market conditions; regional or global instability; and currency and interest rate fluctuations.

     Medium-sized companies often have less predictable earnings, more limited product lines, markets, distribution channels or financial resources and the management of such companies may be dependent upon one or few key people. The market movements of equity securities of medium-sized companies may be more abrupt and volatile than the market movements of equity securities of larger, more established companies or the stock market in general. Historically, medium-sized companies have sometimes gone through extended periods when they did not perform as well as larger companies. In addition, equity securities of medium-sized companies generally are less liquid than larger companies. This means that the Fund could have greater difficulty selling such securities at the time and price that the Fund would like.

     Investments in growth-oriented equity securities may have above-average volatility of price movement. The returns on growth securities may or may not move in tandem with the returns on other styles of investing or the overall stock markets.

     The risks of investing in securities of foreign issuers can include fluctuations in foreign currencies, foreign currency exchange controls, political and economic instability, differences in financial reporting, differences in securities regulation and trading, and foreign taxation issues.

     Investing in real estate investment trusts (REITs) makes the Fund more susceptible to risks associated with the ownership of real estate and with the real estate industry in general and may involve duplication of management fees and other expenses. REITs may be less diversified than other pools of securities, may have lower trading volumes and may be subject to more abrupt or erratic price movements than the overall securities markets.

     Risks of derivatives include the possible imperfect correlation between the value of the instruments and the underlying assets; risks of default by the other party to the transaction; risks that the transactions may result in losses that partially or completely offset gains in portfolio positions; and risks that the transactions may not be liquid. Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss.

About indexes used in this report

The Russell Midcap^® Growth Index is an unmanaged index considered representative of mid-cap growth stocks. The Russell Midcap Growth Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco Van Kampen V.I. Mid Cap Growth Fund

Schedule of Investments

December 31, 2010

	Shares		Value
Common Stocks–93.5%
Aerospace & Defense–1.0%
Goodrich Corp.		9,247	$	814,383
Air Freight & Logistics–2.4%
C.H. Robinson Worldwide, Inc.		9,930		796,287
Expeditors International of Washington, Inc.		20,542		1,121,593
				1,917,880
Apparel, Accessories & Luxury Goods–1.5%
Coach, Inc.		20,928		1,157,528
Application Software–3.2%
Autodesk, Inc.(a)		23,114		882,955
Citrix Systems, Inc.(a)		7,516		514,170
Salesforce.com, Inc.(a)		4,676		617,232
TIBCO Software, Inc.(a)		25,589		504,359
				2,518,716
Asset Management & Custody Banks–1.5%
Affiliated Managers Group, Inc.(a)		11,922		1,182,901
Auto Parts & Equipment–2.1%
BorgWarner, Inc.(a)		17,216		1,245,750
Gentex Corp.		13,408		396,340
				1,642,090
Automotive Retail–1.1%
O’Reilly Automotive, Inc.(a)		14,754		891,437
Biotechnology–1.6%
Human Genome Sciences, Inc.(a)		22,068		527,205
United Therapeutics Corp.(a)		12,337		779,945
				1,307,150
Broadcasting–1.1%
Discovery Communications, Inc., Class C(a)		23,137		848,897
Casinos & Gaming–2.4%
Las Vegas Sands Corp.(a)		14,943		686,631
MGM Resorts International(a)		82,311		1,222,318
				1,908,949
Coal & Consumable Fuels–1.0%
Alpha Natural Resources, Inc.(a)		12,979		779,129
Communications Equipment–0.6%
Finisar Corp.(a)		14,925		443,123
Computer Storage & Peripherals–1.0%
NetApp, Inc.(a)		13,986		768,671
Construction & Engineering–0.6%
Foster Wheeler AG (Switzerland)(a)		14,948		516,005
Construction & Farm Machinery & Heavy Trucks–2.8%
AGCO Corp.(a)		27,649		1,400,698
Navistar International Corp.(a)		13,678		792,093
				2,192,791
Consumer Finance–1.2%
Discover Financial Services		53,055		983,109
Data Processing & Outsourced Services–1.4%
Alliance Data Systems Corp.(a)(b)		16,089		1,142,802
Department Stores–3.0%
Macy’s, Inc.		44,644		1,129,493
Nordstrom, Inc.		28,799		1,220,502
				2,349,995
Education Services–1.7%
Capella Education Co.(a)		11,051		735,776
Strayer Education, Inc.		4,293		653,480
				1,389,256
Electrical Components & Equipment–0.5%
Regal-Beloit Corp.		6,241		416,649
Environmental & Facilities Services–1.0%
Republic Services, Inc.		26,518		791,827
Fertilizers & Agricultural Chemicals–0.6%
Intrepid Potash, Inc.(a)		13,735		512,178
Health Care Equipment–1.9%
American Medical Systems Holdings, Inc.(a)		19,633		370,278
CareFusion Corp.(a)		27,674		711,222
NuVasive, Inc.(a)		16,520		423,738
				1,505,238
Health Care Facilities–2.1%
Brookdale Senior Living, Inc.(a)		24,016		514,183
Universal Health Services, Inc., Class B		27,039		1,174,033
				1,688,216
Health Care Services–0.9%
DaVita, Inc.(a)		10,616		737,706

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Mid Cap Growth Fund

	Shares		Value
Hotels, Resorts & Cruise Lines–3.2%
Ctrip.com International Ltd.–ADR (Cayman Islands)(a)		17,514	$	708,441
Marriott International, Inc., Class A		21,516		893,775
Starwood Hotels & Resorts Worldwide, Inc.		15,674		952,666
				2,554,882
Household Products–0.9%
Church & Dwight Co., Inc.		10,395		717,463
Human Resource & Employment Services–2.0%
Manpower, Inc.		12,349		775,023
Robert Half International, Inc.		27,117		829,780
				1,604,803
Industrial Machinery–3.2%
Flowserve Corp.		7,920		944,223
Gardner Denver, Inc.		9,971		686,204
Kennametal, Inc.		22,481		887,100
				2,517,527
Internet Software & Services–2.0%
Akamai Technologies, Inc.(a)		7,750		364,638
MercadoLibre, Inc.(a)		7,413		494,076
VeriSign, Inc.		21,439		700,412
				1,559,126
IT Consulting & Other Services–2.3%
Cognizant Technology Solutions Corp., Class A(a)		12,595		923,087
Teradata Corp.(a)		22,617		930,916
				1,854,003
Life Sciences Tools & Services–1.9%
Life Technologies Corp.(a)		14,108		782,994
Pharmaceutical Product Development, Inc.		26,439		717,554
				1,500,548
Managed Health Care–0.9%
Aetna, Inc.		24,627		751,370
Metal & Glass Containers–2.1%
Crown Holdings, Inc.(a)		36,418		1,215,633
Owens-Illinois, Inc.(a)		13,753		422,217
				1,637,850
Oil & Gas Equipment & Services–1.8%
Oil States International, Inc.(a)		9,707		622,122
Weatherford International Ltd. (Switzerland)(a)		35,580		811,224
				1,433,346
Oil & Gas Exploration & Production–5.3%
Concho Resources, Inc.(a)		13,741		1,204,673
Continental Resources, Inc.(a)		15,246		897,227
Oasis Petroleum, Inc.(a)		27,541		746,912
Pioneer Natural Resources Co.		15,239		1,323,050
				4,171,862
Packaged Foods & Meats–1.1%
Hershey Co.		18,460		870,389
Pharmaceuticals–1.1%
Shire PLC–ADR (Jersey)		11,924		863,059
Precious Metals & Minerals–0.3%
Stillwater Mining Co.(a)		9,307		198,704
Property & Casualty Insurance–0.7%
Assured Guaranty, Ltd. (Bermuda)		31,627		559,798
Publishing–1.1%
McGraw-Hill Cos., Inc.		24,629		896,742
Real Estate Services–1.3%
CB Richard Ellis Group, Inc., Class A(a)		50,770		1,039,770
Research & Consulting Services–1.4%
IHS, Inc., Class A(a)		14,052		1,129,640
Restaurants–1.0%
Darden Restaurants, Inc.		17,747		824,171
Security & Alarm Services–0.9%
Corrections Corp. of America(a)		28,297		709,123
Semiconductor Equipment–2.1%
Lam Research Corp.(a)		15,534		804,351
Teradyne, Inc.(a)		59,733		838,651
				1,643,002
Semiconductors–4.1%
Altera Corp.		18,171		646,524
Avago Technologies Ltd. (Singapore)		26,619		757,843
Broadcom Corp., Class A		9,990		435,065
Cavium Networks, Inc.(a)		18,770		707,254
Marvell Technology Group Ltd. (Bermuda)(a)		38,237		709,296
				3,255,982
Specialized Finance–1.2%
Moody’s Corp.		35,133		932,430
Specialty Chemicals–4.0%
Albemarle Corp.		18,772		1,047,102
Lubrizol Corp.		3,594		384,127
LyondellBasell Industries NV, Class A (Netherlands)(a)		19,216		661,030
Nalco Holding Co.		34,348		1,097,075
				3,189,334

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Mid Cap Growth Fund

	Shares		Value
Specialty Stores–1.0%
Ulta Salon Cosmetics & Fragrance, Inc.(a)		24,230	$	823,820
Systems Software–2.1%
Check Point Software Technologies Ltd. (Israel)(a)		9,217		426,378
Rovi Corp.(a)		20,471		1,269,407
				1,695,785
Technology Distributors–1.3%
Avnet, Inc.(a)		19,629		648,346
Tech Data Corp.(a)		8,498		374,082
				1,022,428
Trading Companies & Distributors–1.3%
WESCO International, Inc.(a)		11,496		606,989
W.W. Grainger, Inc.		2,875		397,066
				1,004,055
Trucking–1.9%
J.B. Hunt Transport Services, Inc.		24,317		992,377
Swift Transportation Co., Inc.(a)		40,420		505,654
				1,498,031
Wireless Telecommunication Services–1.8%
American Tower Corp., Class A(a)		14,520		749,813
Millicom International Cellular SA (Luxembourg)		7,004		669,582
				1,419,395
Total Common Stocks–93.5%				74,285,064
Investment Companies–4.3%
iShares Russell MidCap Growth Index Fund(b)		32,039		1,815,650
iShares S&P MidCap 400 Growth Index Fund		16,049		1,616,455
Total Investment Companies–4.3%				3,432,105
Total Long-Term Investments–97.8% (Cost $63,392,465)				77,717,169
Money Market Funds–2.6%
Liquid Assets Portfolio–Institutional Class(c)		1,043,908		1,043,908
Premier Portfolio–Institutional Class(c)		1,043,908		1,043,908
Total Money Market Funds–2.6% (Cost $2,087,816)				2,087,816
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.4% (Cost $65,480,281)				79,804,985
Investments Purchased with Cash Collateral from Securities on Loan Money Market Funds–2.1%
Liquid Assets Portfolio–Institutional Class(c)(d) (Cost $1,641,032)		1,641,032		1,641,032
TOTAL INVESTMENTS–102.5% (Cost $67,121,313)				81,446,017
LIABILITIES IN EXCESS OF OTHER ASSETS–(2.5%)				(1,972,333	)
NET ASSETS–100.0%			$	79,473,684

Percentages are calculated as a percentage of net assets.

Investment Abbreviation:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

(a)	Non-income producing security.
(b)	All or a portion of this security was out on loan at December 31, 2010.
(c)	The money market fund and the Fund are affiliated by having the same investment advisor.
(d)	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.

Invesco Van Kampen V.I. Mid Cap Growth Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $63,392,465)*	$	77,717,169
Investments in affiliated money market funds, at value and cost		3,728,848
Receivables:
Dividends		25,148
Investments sold		54,678
Fund shares sold		3,715
Other		2,039
Total assets		81,531,597
Liabilities:
Payables:
Collateral upon return of securities loaned		1,641,032
Investments purchased		200,114
Distributor and affiliates		144,041
Fund shares repurchased		25,265
Trustees’ deferred compensation and retirement plans		1,308
Accrued expenses		46,153
Total liabilities		2,057,913
Net assets	$	79,473,684
Net assets consist of:
Capital (Par value of $0.001 per share with an unlimited number of shares authorized)	$	67,413,700
Net unrealized appreciation		14,324,704
Accumulated net realized gain (loss)		(2,263,412	)
Accumulated undistributed net investment income (loss)		(1,308	)
Net assets	$	79,473,684
Series I Shares:
Net asset value and offering price per share (Based on net assets of $12,286 and 3,030 shares of beneficial interest issued and outstanding)	$	4.05
Series II Shares:
Net asset value and offering price per share (Based on net assets of $79,461,398 and 19,591,091 shares of beneficial interest issued and outstanding)	$	4.06

*  At December 31, 2010, securities with an aggregate value of $1,601,784 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2010

Investment Income:
Dividends (Net of foreign withholding taxes of $4,464)	$	440,740
Dividends from affiliated money market funds (Includes securities lending income of $3,017)		6,954
Interest		5,653
Total income		453,347
Expenses:
Investment advisory fee		467,936
Distribution fees
Series II		155,892
Administrative service fees		144,443
Professional fees		35,511
Trustees’ and officers’ fees and benefits		16,933
Transfer agent fees		11,934
Custody		10,266
Other		9,773
Total expenses		852,688
Expense reduction		68,914
Net expenses		783,774
Net investment income (loss)		(330,427	)
Realized and unrealized gain (loss):
Realized gain (loss):
Investments		3,959,072
Foreign currency transactions		3,056
Net realized gain		3,962,128
Unrealized appreciation:
Beginning of the period		1,634,826
End of the Period		14,324,704
Net unrealized appreciation during the period		12,689,878
Net realized and unrealized gain		16,652,006
Net increase in net assets from operations	$	16,321,579

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Mid Cap Growth Fund

Statements of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
From investment activities:
Operations:
Net investment income (loss)	$	(330,427	)	$	(115,269	)
Net realized gain (loss)		3,962,128			(2,218,749	)
Net unrealized appreciation during the period		12,689,878			16,601,867
Net change in net assets from investment activities		16,321,579			14,267,849
From capital transactions:
Proceeds from shares sold		27,548,493			15,050,265
Cost of shares repurchased		(9,847,092	)		(6,470,867	)
Net change in net assets from capital transactions		17,701,401			8,579,398
Total increase in net assets		34,022,980			22,847,247
Net assets:
Beginning of the period		45,450,704			22,603,457
End of the period (Including accumulated undistributed net investment income (loss) of $(1,308) and ($151,137), respectively)	$	79,473,684		$	45,450,704

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Mid Cap Growth Fund

Financial Highlights

The following schedules present financial highlights for a share of the Fund outstanding throughout the periods indicated.

	Series I shares
	June 1, 2010
	(Commencement of
	operations) to
	December 31, 2010
Net asset value, beginning of the period	$	3.30
Net investment income (loss)(a)		(0.00	)(b)
Net realized and unrealized gain		0.75
Total from investment operations		0.75
Net asset value, end of the period	$	4.05
Total return*(c)		22.73	%
Net assets at end of the period (in thousands)	$	12.3
Ratio of expenses to average net assets*		1.01	%(d)
Ratio of net investment income (loss) to average net assets*		(0.18	)%(d)
Portfolio turnover(e)		105	%
* If certain expenses had not been assumed by the adviser, total return would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		1.12	%
Ratio of net investment income (loss) to average net assets		(0.29	)%

(a)	Based on average shares outstanding.
(b)	Amount is less than $0.01 per share.
(c)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(d)	Ratios are annualized and based on average daily net assets (000’s omitted) of $11.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Mid Cap Growth Fund

Financial Highlights—(continued)

	Series II sharesˆ
	Years ended December 31,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	3.19		$	2.04		$	5.72		$	5.24		$	5.40
Net investment income (loss)(a)		(0.02	)		(0.01	)		(0.02	)		(0.02	)		(0.03	)
Net realized and unrealized gain (loss)		0.89			1.16			(2.01	)		0.88			0.31
Total from investment operations		0.87			1.15			(2.03	)		0.86			0.28
Less distributions from capital gains		-0-			-0-			1.65			0.38			0.44
Net asset value, end of the period	$	4.06		$	3.19		$	2.04		$	5.72		$	5.24
Total return*		27.27	%(b)		56.37	%(c)		(46.83	)%(c)		17.60	%(c)		4.92	%(c)
Net assets at end of the period (in millions)	$	79.5		$	45.5		$	22.6		$	43.3		$	42.5
Ratio of expenses to average net assets*		1.26	%(d)		1.26	%		1.26	%		1.26	%		1.26	%
Ratio of net investment income (loss) to average net assets*		(0.53	)%(d)		(0.36	)%		(0.66	)%		(0.37	)%		(0.61	)%
Portfolio turnover(e)		105	%		42	%		42	%		201	%		154	%
* If certain expenses had not been assumed by the adviser, total return would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		1.37	%		1.52	%		1.61	%		1.39	%		1.45	%
Ratio of net investment income (loss) to average net assets		(0.64	)%		(0.62	)%		(1.01	)%		(0.51	)%		(0.80	)%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	These returns include combined Rule 12b-1 fees and service fees of up to 0.25%.
(d)	Ratios are annualized and based on average daily net assets (000’s omitted) of $62,357.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year.
ˆ	On June 1, 2010, the Class II shares of the predecessor fund were reorganized into Series II shares of the Fund.

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen V.I. Mid Cap Growth Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as Van Kampen Life Investment Trust Mid Cap Growth Portfolio (the “Acquired Fund”), an investment portfolio of Van Kampen Life Investment Trust. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class II shares received Series II shares of the Fund.

  Information for the Acquired Fund’s — Class II shares prior to the Reorganization are included with Series II shares of the Fund throughout this report.

  The Fund’s investment objective is to seek capital growth.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean

Invesco Van Kampen V.I. Mid Cap Growth Fund

	between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to

Invesco Van Kampen V.I. Mid Cap Growth Fund

	federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $500 million		0	.75%
Next $500 million		0	.70%
Over $1 billion		0	.65%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee of $165,682 to Van Kampen Asset Management (“Van Kampen”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

Invesco Van Kampen V.I. Mid Cap Growth Fund

  Effective on the Reorganization date, the Adviser has contractually agreed, through at least June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 1.01% and Series II shares to 1.26% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Prior to the Reorganization, Van Kampen had voluntarily agreed to waive fees and/or reimburse expenses of Class II shares of $26,591.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the period ended December 31, 2010, the Adviser waived advisory fees of $42,323.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $29,317 for accounting and fund administrative services and reimbursed $100,680 for services provided by insurance companies. Prior to the Reorganization, under separate accounting services and Chief Compliance Officer (“CCO”) employment agreements, Van Kampen Investments, Inc. (“VKII”) provided accounting services and the CCO provided compliance services to the Acquired Fund. Pursuant to such agreements, the Acquired Fund paid $4,050 to VKII.

  Also, the Trust has entered into service agreements whereby State Street Bank & Trust Company (“SSB”) serves as custodian and fund accountant and provides certain administrative services to the Fund.

  Prior to June 1, 2010, under a legal services agreement, VKII provided legal services to the Fund. Pursuant to such agreement, the Fund paid $10,056 to VKII.

  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. Prior to the Reorganization, the Acquired Fund paid $7,134 to Van Kampen Investor Services Inc., which served as the Acquired Fund’s transfer agent. For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund.

  Prior to the Reorganization, the Acquired Fund had entered into master distribution agreements with Van Kampen Funds Inc. (“VKFI”) to serve as the distributor for the Class II shares. Pursuant to such agreements, the Acquired Fund paid $55,227 to VKFI. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. 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.

Invesco Van Kampen V.I. Mid Cap Growth Fund

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	81,446,017	$	—	$	—	$	81,446,017

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $626 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. Prior to the Reorganization, the Acquired Fund recognized expense of $526 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom LLP, of which a director of the Acquired Fund was a partner of such firm and he and his law firm provided legal services as legal counsel to the Acquired Fund.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

There were no ordinary or long-term capital gain distributions paid during the years ended December 31, 2010 and 2009.

Tax Components of Net Assets at Period-End:

	2010
Net unrealized appreciation — investments	$	14,037,850
Temporary book/tax differences		(1,308	)
Capital loss carryforward		(1,976,558	)
Shares of beneficial interest		67,413,700
Total net assets	$	79,473,684

  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 utilized $2,009,408 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	593,897
December 31, 2017		1,382,661
Total capital loss carryforward	$	1,976,558

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

Invesco Van Kampen V.I. Mid Cap Growth Fund

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $81,447,049 and $58,453,870, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	14,786,715
Aggregate unrealized (depreciation) of investment securities		(748,865	)
Net unrealized appreciation of investment securities	$	14,037,850
Cost of investments for tax purposes is $67,408,167.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency and convertible preferred stock transactions and net operating losses, on December 31, 2010, undistributed net investment income (loss) was increased by $480,256, undistributed net realized gain (loss) was decreased by $50,711 and capital decreased by $429,545. This reclassification had no effect on the net assets of the Fund.

NOTE 9—Share Information

For the years ended December 31, 2010 and 2009, transactions were as follows:

	For the years ended December 31,
	2010(a)						2009
	Shares			Value			Shares			Value
Sales:
Series I		3,030		$	10,000			-0-		$	-0-
Series II		8,162,383			27,538,493			5,735,245			15,050,265
Total sales		8,165,413		$	27,548,493			5,735,245		$	15,050,265
Repurchases:
Series I		-0-		$	-0-			-0-		$	-0-
Series II		(2,832,428	)		(9,847,092	)		(2,544,014	)		(6,470,867	)
Total repurchases		(2,832,428	)	$	(9,847,092	)		(2,544,014	)	$	(6,470,867	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 93% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. In addition, less than 1% of the outstanding shares of the Fund are owned by Invesco or an investment advisor under common control.

NOTE 10—Change in Independent Registered Public Accounting Firm (unaudited)

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Invesco Van Kampen V.I. Mid Cap Growth Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco Van Kampen V.I. Mid Cap Growth Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen V.I. Mid Cap Growth Fund (formerly known as Van Kampen Life Investment Trust Mid Cap Growth Portfolio; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 19, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco Van Kampen V.I. Mid Cap Growth Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,289.81	$	5.83	$	1,021.11	$	5.14		1.01	%
Series II		1,000.00		1,288.89		7.27		1,018.85		6.41		1.26

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco Van Kampen V.I. Mid Cap 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Long-Term Capital Gain Dividends	$	0
Qualified Dividend Income*		0%
U.S. Treasury Obligations*		0%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco Van Kampen V.I. Mid Cap Growth Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco Van Kampen V.I. Mid Cap Value Fund

Annual Report to Shareholders § December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VK-VIMCV-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the year ended December 31, 2010, Invesco Van Kampen V.I. Mid Cap Value Fund underperformed its index, the Russell Midcap Value Index. Stock selection in the energy and materials sectors, and underweight exposure to the utilities sector, contributed to Fund performance versus its benchmark. Alternatively, stock selection in the financials and health care sectors hampered Fund performance.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	22.24	%
Series II Shares	22.18
Russell Midcap Value Index▼ (Broad Market/Style-Specific Index)	24.75

^▼Lipper Inc.

How we invest

We call our investment philosophy “value with a catalyst.” We believe that undervalued companies which are experiencing positive changes (i.e., “catalysts”) have the potential to generate long-term stock price growth for shareholders. We generally seek to identify companies that are out of favor with investors, underearning relative to their potential and attractively valued. For these companies, we attempt to identify catalysts that may improve the financial results and/or correct the undervaluation. Examples of catalysts typically include improved operational efficiency, changing industry dynamics and/or a change in management.

     We initially identify potential investments through a series of quantitative screens including, but not limited to, return on capital and enterprise value to sales metrics. We then conduct fundamental research on the most attractive opportunities. The research process includes a thorough review of a company’s financial statements, an evaluation of its competitive position and

stability and meetings with its executives. During the research process, we also value the company under various scenarios to determine if the investment is an attractive opportunity relative to its risks. This is also where we typically identify the positive catalyst, a prerequisite for potential investment. Finally, we generally set a price target for a stock based on normalized earnings and historical valuation multiples.

     In short, our objective is to exploit negative sentiment toward a company’s stock by analyzing the company’s operations in the context of a cyclical environment and identifying one or more catalysts that may improve the company’s financial performance. Improved financial performance, in turn, has the potential to drive the company’s stock price higher.

     We typically sell an investment when it reaches our estimate of fair value or when we identify a more attractive investment opportunity.

Market conditions and your Fund

Equity markets were choppy during the fiscal year as investors weighed the competing issues of solid corporate profits and soft macroeconomic data. Corporate earnings were largely positive but often were overshadowed by concerns about high unemployment, weak consumer spending, soft housing data and the possibility of additional U.S. Federal Reserve accommodation. After rising through April, major equity indexes sold off precipitously in May as the sovereign debt crisis unfolded in the eurozone while U.S. economic indicators remained weak, prompting fears of a “double-dip” recession. Uncertainty created by the debt crisis – combined with subdued employment, consumer spending and housing data – added to concerns that the recovery was slowing. Just as abruptly, however, the markets reversed course starting in September and rallied through the end of the year on modestly better economic news.

     Major equity indexes produced positive returns for the fiscal year, and all 10 sectors of the S&P 500 Index posted gains. More economically sensitive sectors such as consumer discretionary and industrials had the highest returns, while less economically sensitive sectors such as health care had some of the lowest returns.

     All sectors of the Fund posted positive performance for the year, as equity markets climbed throughout 2010. However, on a relative basis, the Fund underperformed its style-specific index, the Russell Midcap Value Index.

     The energy sector was the largest contributor to relative performance versus the Fund’s benchmark. Although the Fund was underweight in the sector, stock

Portfolio Composition

By sector

Financials	20.4	%
Industrials	14.1
Consumer Discretionary	11.9
Health Care	10.2
Information Technology	8.3
Utilities	8.0
Energy	7.6
Materials	7.5
Consumer Staples	7.1
Money Market Funds
Plus Other Assets Less Liabilities	4.9

Top 10 Equity Holdings*

1.	Snap-on, Inc.	3.7	%
2.	Brookdale Senior Living, Inc.	3.7
3.	Avery Dennison Corp.	3.5
4.	El Paso Corp.	3.2
5.	Zebra Technologies Corp.-Class A	3.1
6.	Newell Rubbermaid Inc.	3.1
7.	Goodrich Corp.	3.0
8.	Edison International	3.0
9.	Willis Group Holdings PLC	3.0
10.	Harley-Davidson, Inc.	2.7

Total Net Assets	$314.5 million
Total Number of Holdings*		46

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.

Invesco Van Kampen V.I. Mid Cap Value Fund

selection drove relative performance.
Smith International, an oil services company, made a significant contribution to Fund performance when it was acquired by Schlumberger (not a Fund holding).
Pioneer Natural Resources and El Paso also made positive contributions.

     Materials stocks also aided the Fund’s relative performance. The Fund was overweight in this sector and stock selection helped drive returns. Cyclical stocks in the materials sector performed well as the economy showed signs of strengthening.

     In the utilities sector, stock selection helped Fund performance. The Fund was underweight in this sector versus the Fund’s benchmark, and we avoided many of the deregulated utility companies which performed poorly.

     The largest detractor from the Fund’s relative performance was the financials sector. In general, financial stocks performed strongly over the reporting period. However, the Fund was underweight in the financials sector relative to its benchmark, and our financial stocks did not appreciate as much as those of the index. In general, we focused on what we believed were lower risk financial companies with stronger balance sheets and less credit risk given the systemic risk in most financial stocks.

     Overweight exposure to, and weak stock selection in, the health care sector detracted from the Fund’s performance relative to its benchmark. This was particularly the case in the health care equipment and services industry. Beckman Coulter, a biomedical instrument manufacturer and distributor, disclosed a regulatory issue that affected its profitability and caused its stock price to fall. Brookdale Senior Living, an assisted living provider, had lower occupancy due to weak consumer spending in a weak economy, which hurt the company’s profitability.

     Equity markets experienced a strong recovery during the period covered by this report. We believe that the market volatility that occurred during 2010 will continue to create opportunities to invest in companies with attractive valuations and strong fundamentals. We believe that ultimately those valuations and fundamentals may be reflected in those companies’ stock prices.

     As always, we would like to caution investors against making investment decisions based on short-term performance. We recommend that you consult your financial adviser to discuss your individual financial program.

     Thank you for your investment in Invesco Van Kampen V.I. Mid Cap Value Fund and for sharing our long-term investment horizon.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Thomas Copper
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco Van Kampen V.I. Mid Cap Value Fund. He joined Invesco in 2010. Mr. Copper earned a B.A. in economics and political science from Baylor University.

Sergio Marcheli
Portfolio manager, is manager of Invesco Van Kampen V.I. Mid Cap Value Fund. He joined Invesco in 2010. Mr. Marcheli earned a B.B.A. from the University of Houston and an M.B.A. from the University of St. Thomas.

John Mazanec
Portfolio manager, is manager of Invesco Van Kampen V.I. Mid Cap Value Fund. He joined Invesco in 2010. Mr. Mazanec earned a B.S. from DePauw University and an M.B.A. from Harvard University.

Invesco Van Kampen V.I. Mid Cap Value Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 12/31/96, Fund data from 1/2/97

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (1/2/97)	9.56	%
10 Years	5.14
5 Years	5.40
1 Year	22.24
Series II Shares
Inception (5/5/03)	10.86	%
5 Years	5.30
1 Year	22.18

Effective June 1, 2010, Class I and Class II shares of the predecessor fund advised by Morgan Stanley Investment Management Inc. were reorganized into Series I and Series II shares, respectively, of Invesco Van Kampen V.I. Mid Cap Value Fund. Returns shown above for Series I and Series II shares are blended returns of the predecessor fund and Invesco Van Kampen V.I. Mid Cap Value Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future

results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.06% and 1.16%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.06% and 1.31%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco Van Kampen V.I. Mid Cap Value Fund, a series portfolio of AIM Variable Insurance Funds (Invesco

Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco Van Kampen V.I. Mid Cap Value Fund

Invesco Van Kampen V.I. Mid Cap Value Fund’s investment objective is to provide above-average total return over a market cycle of three to five years by investing in common stocks and other equity securities.

§	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
§	Unless otherwise noted, all data provided by Invesco.
§	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

Market risk is the possibility that the market values of securities owned by the Fund will decline. Investments in common stocks and other equity securities generally are affected by changes in the stock markets, which fluctuate substantially over time, sometimes suddenly and sharply. Convertible securities have risks associated with both common stocks and debt securities. Investments in debt securities generally are affected by changes in interest rates and the credit-worthiness of the issuer. The prices of such securities tend to fall as interest rates rise, and such declines tend to be greater among securities with longer maturities. The value of a convertible security tends to decline as interest rates rise and, because of the conversion feature, tends to vary with fluctuations in the market value of the underlying equity security.

     Investing in securities of medium capitalization companies may involve greater risk than is customarily associated with investing in more established companies. Often, medium capitalization companies and the industries in which they are focused are still evolving. Medium-sized companies often have less predictable earnings and more limited product lines, markets, distribution channels or financial resources. The market movements of equity securities of medium-sized companies may be more abrupt and volatile than the market movements of equity securities of larger, more established companies or the stock market in general.

     The Fund emphasizes a value style of investing, which focuses on undervalued companies with characteristics for improved valuations. This style of investing is subject to the risk that the valuations never improve or that the returns on “value” equity securities are less than returns on other styles of investing or the overall stock market. Value stocks also may decline in price, even though in theory they are already underpriced.

     The risks of investing in securities of foreign issuers can include fluctuations in foreign currencies, foreign currency exchange controls, political and economic instability, differences in financial reporting, differences in securities regulation and trading, and foreign taxation issues.

     Investing in real estate investment trusts (REITs) makes the Fund more susceptible to risks associated with the ownership of real estate and with the real estate industry in general and may involve duplication of management fees and other expenses. REITs may be less diversified than other pools of securities, may have lower trading volumes and may be subject to more abrupt or erratic price movements than the overall securities markets.

     Risks of derivatives include the possible imperfect correlation between the value of the instruments and the underlying assets; risks of default by the other party to the transaction; risks that the transactions may result in losses that partially or completely offset gains in portfolio positions; and risks that the transactions may not be liquid. Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss.

About indexes used in this report

The Russell Midcap^® Value Index is an unmanaged index considered representative of mid-cap value stocks. The Russell Midcap Value Index is a trademark/ service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco Van Kampen V.I. Mid Cap Value Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–95.13%
Aerospace & Defense–3.02%
Goodrich Corp.		107,903	$	9,503,017
Asset Management & Custody Banks–1.95%
Northern Trust Corp.		110,412		6,117,929
Auto Parts & Equipment–1.95%
Lear Corp.(b)		62,197		6,139,466
Building Products–1.97%
Lennox International Inc.		131,211		6,204,968
Computer Hardware–2.01%
Diebold, Inc.		197,407		6,326,894
Data Processing & Outsourced Services–2.21%
Fidelity National Information Services, Inc.		253,261		6,936,819
Diversified Banks–1.81%
Comerica Inc.		134,873		5,697,036
Diversified Chemicals–1.01%
PPG Industries, Inc.		37,931		3,188,859
Electric Utilities–5.09%
Edison International		245,877		9,490,852
Great Plains Energy Inc.		336,709		6,528,788
				16,019,640
Electronic Manufacturing Services–1.00%
Flextronics International Ltd. (Singapore)(b)		401,279		3,150,040
Food Distributors–1.91%
Sysco Corp.		204,357		6,008,096
Health Care Distributors–2.47%
Henry Schein, Inc.(b)		126,477		7,764,423
Health Care Equipment–1.47%
Beckman Coulter, Inc.(c)		42,991		3,234,213
Teleflex Inc.		25,877		1,392,441
				4,626,654
Health Care Facilities–6.28%
Brookdale Senior Living Inc.(b)		539,156		11,543,330
Healthsouth Corp.(b)		395,395		8,188,630
				19,731,960
Heavy Electrical Equipment–1.32%
Babcock & Wilcox Co.(b)		161,912		4,143,328
Home Furnishings–1.70%
Mohawk Industries, Inc.(b)		94,421		5,359,336
Housewares & Specialties–3.06%
Newell Rubbermaid Inc.		529,610		9,628,310
Industrial Machinery–3.68%
Snap-on Inc.		204,219		11,554,711
Insurance Brokers–5.57%
Marsh & McLennan Cos., Inc.		296,568		8,108,169
Willis Group Holdings PLC (Ireland)		271,449		9,400,279
				17,508,448
Investment Banking & Brokerage–2.19%
Charles Schwab Corp. (The)		402,601		6,888,503
Motorcycle Manufacturers–2.72%
Harley-Davidson, Inc.		246,704		8,553,228
Multi-Utilities–2.91%
CenterPoint Energy, Inc.		187,480		2,947,186
Wisconsin Energy Corp.		105,339		6,200,253
				9,147,439
Office Electronics–3.11%
Zebra Technologies Corp.–Class A(b)		257,459		9,780,867
Office Services & Supplies–3.53%
Avery Dennison Corp.		262,326		11,106,883
Oil & Gas Exploration & Production–1.94%
Pioneer Natural Resources Co.		70,101		6,086,169
Oil & Gas Storage & Transportation–5.68%
El Paso Corp.		724,961		9,975,463
Williams Cos., Inc. (The)		319,278		7,892,552
				17,868,015
Packaged Foods & Meats–2.17%
ConAgra Foods, Inc.		302,463		6,829,615
Paper Packaging–1.99%
Sonoco Products Co.		185,976		6,261,812
Personal Products–1.74%
Avon Products, Inc.		188,289		5,471,678
Property & Casualty Insurance–2.12%
ACE Ltd. (Switzerland)		107,111		6,667,660
Regional Banks–5.28%
BB&T Corp.		202,015		5,310,974
First Horizon National Corp.(b)		271,646		3,199,992

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Mid Cap Value Fund

	Shares		Value
Regional Banks–(continued)
Wintrust Financial Corp.		149,534	$	4,939,108
Zions Bancorp.		129,725		3,143,237
				16,593,311
Restaurants–2.42%
Darden Restaurants, Inc.		163,808		7,607,244
Retail REIT’s–1.52%
Weingarten Realty Investors		200,600		4,766,256
Soft Drinks–1.23%
Coca-Cola Enterprises, Inc.		154,399		3,864,607
Specialty Chemicals–4.54%
Valspar Corp. (The)		180,420		6,220,882
WR Grace & Co.(b)		228,850		8,039,500
				14,260,382
Trucking–0.56%
Swift Transportation Co.(b)(d)		141,102		1,765,186
Total Common Stocks & Other Equity Interests (Cost $260,275,168)				299,128,789

	Number of		Exercise		Expiration
	Contracts		Price		Date		Value
Put Option Purchased–0.01%
Health Care Equipment–0.01%
Beckman Coulter, Inc. (Cost $47,436)		215		65		Feb-11	$	22,575

	Shares
Money Market Funds–4.91%
Liquid Assets Portfolio–Institutional Class(e)		7,719,901		7,719,901
Premier Portfolio–Institutional Class(e)		7,719,901		7,719,901
Total Money Market Funds (Cost $15,439,802)				15,439,802
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.05% (Cost $275,762,406)				314,591,166
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–0.19%
Liquid Assets Portfolio–Institutional Class (Cost $610,763)(e)(f)		610,763		610,763
TOTAL INVESTMENTS–100.24% (Cost $276,373,169)				315,201,929
OTHER ASSETS LESS LIABILITIES–(0.24)%				(745,465	)
NET ASSETS–100.00%			$	314,456,464

Investment Abbreviations:

REIT – Real Estate Investment Trust

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	A portion of this security is subject to call options written. See Note 1J and Note 7.
(d)	All or a portion of this security was out on loan at December 31, 2010.
(e)	The money market fund and the Fund are affiliated by having the same investment adviser.
(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.

Invesco Van Kampen V.I. Mid Cap Value Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $260,322,604)*	$	299,151,364
Investments in affiliated money market funds, at value and cost		16,050,565
Total investments, at value (Cost $276,373,169)		315,201,929
Receivables for:
Fund shares sold		276,503
Dividends		291,682
Fund expenses absorbed		54,493
Investment for trustee deferred compensation and retirement plans		1,410
Total assets		315,826,017
Liabilities:
Payable for:
Fund shares reacquired		104,420
Options written, at value (premiums received $67,120)		91,375
Collateral upon return of securities loaned		610,763
Accrued fees to affiliates		521,382
Accrued other operating expenses		38,905
Trustee deferred compensation and retirement plans		2,708
Total liabilities		1,369,553
Net assets applicable to shares outstanding	$	314,456,464
Net assets consist of:
Shares of beneficial interest	$	327,867,413
Undistributed net investment income		1,955,705
Undistributed net realized gain (loss)		(54,171,159	)
Unrealized appreciation		38,804,505
	$	314,456,464
Net Assets:
Series I	$	162,471,575
Series II	$	151,984,889
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		12,700,381
Series II		11,948,027
Series I:
Net asset value per share	$	12.79
Series II:
Net asset value per share	$	12.72

*  At December 31, 2010, securities with an aggregate value of $599,267 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends	$	5,077,888
Dividends from affiliated money market funds (includes securities lending income of $2,445)		3,960
Interest		7,108
Total investment income		5,088,956
Expenses:
Advisory fees		2,102,407
Administrative services fees		775,462
Custodian fees		17,247
Distribution fees — Series II		386,891
Transfer agent fees		12,180
Trustees’ and officers’ fees and benefits		13,142
Other		72,753
Total expenses		3,380,082
Less: Fees waived		(268,138	)
Net expenses		3,111,944
Net investment income		1,977,012
Realized and unrealized gain (loss) from:
Net realized gain from investment securities (include net gains from securities sold to affiliates of $72,390)		15,581,654
Change in net unrealized appreciation (depreciation) of:
Investment securities		42,024,505
Option contracts written		(24,255	)
		42,000,250
Net realized and unrealized gain		57,581,904
Net increase in net assets resulting from operations	$	59,558,916

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Mid Cap Value Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	1,977,012		$	2,610,346
Net realized gain (loss)		15,581,654			(12,760,447	)
Change in net unrealized appreciation		42,000,250			93,463,377
Net increase in net assets resulting from operations		59,558,916			83,313,276
Distributions to shareholders from net investment income:
Series I		(1,468,515	)		(1,846,024	)
Series II		(1,117,364	)		(1,144,481	)
Total distributions from net investment income		(2,585,879	)		(2,990,505	)
Share transactions–net:
Series I		(26,790,802	)		(27,209,501	)
Series II		4,375,683			2,613,501
Net increase (decrease) in net assets resulting from share transactions		(22,415,119	)		(24,596,000	)
Net increase in net assets		34,557,918			55,726,771
Net assets:
Beginning of year		279,898,546			224,171,775
End of year (includes undistributed net investment income of $1,955,705 and $2,603,881, respectively)	$	314,456,464		$	279,898,546

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen V.I. Mid Cap Value Fund (the “Fund”) is a series portfolio of Variable Insurance Funds (Invesco Variable Insurance Funds), formerly AIM Variable Insurance 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 consisting of forty-one separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as Universal Institutional Funds Mid Cap Value Portfolio (the “Acquired Fund”), an investment portfolio of The Universal Institutional Funds, Inc.. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class I and Class II shares received Series I and Series II shares of the Fund.

  Information for the Acquired Fund’s — Class I and Class II shares prior to the Reorganization is included with Series I and Series II shares of the Fund throughout this report.

  The Fund’s investment objective is above-average total return over a market cycle of three to five years by investing primarily in a portfolio of common stocks and other equity securities.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an

Invesco Van Kampen V.I. Mid Cap Value Fund

	independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to

Invesco Van Kampen V.I. Mid Cap Value Fund

	federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Lending — The Fund may lend portfolio securities having a market value up to one-third of the Fund’s total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Fund’s policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if and to the extent that the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliates on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Call Options Written and Purchased — The Fund may write and/or buy call options. A call option gives the purchaser of such option the right to buy, and the writer the obligation to sell, the underlying security at the stated exercise price during the option period. 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.
	When the Fund writes a 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 call option expires on the stipulated expiration date, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or a loss if the closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written option is exercised, the Fund realizes a gain or a loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received. Realized and unrealized gains and losses on these contracts are included in the Statement of Operation. A risk in writing a covered call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised.
	When the Fund buys a call option, an amount equal to the premium paid by the Fund is recorded as an investment on the Statement of Assets and Liabilities. The amount of the investment is subsequently “marked-to-market” to reflect the current value of the option purchased. Realized and unrealized gains and losses on these contracts are included in the Statement of Operations. A risk in buying an option is that the Fund pays a premium whether or not the option is exercised. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased.
K.	Put Options Purchased — The Fund may purchase put options including options on securities indexes and/or futures contracts. By purchasing a put option, the Fund obtains the right (but not the obligation) to sell the option’s underlying instrument at a fixed strike price. In return for this right, the Fund pays an option premium. The option’s underlying instrument may be a security, securities index, or a futures contract. Put options may be used by the Fund to hedge securities it owns by locking in a minimum price at which the Fund can sell. If security prices fall, the put option could be exercised to offset all or a portion of the Fund’s resulting losses. At the same time, because the maximum the Fund has at risk is the cost of the option, purchasing put options does not eliminate the potential for the Fund to profit from an increase in the value of the securities hedged. Realized and unrealized gains and losses on these contracts are included in the Statement of Operations. 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.

Invesco Van Kampen V.I. Mid Cap Value Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $1 billion		0	.72%
Over $1 billion		0	.65%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee to Morgan Stanley Investment Management Inc. (“MS Investment Management”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed, through at least June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 1.18% and Series II shares to 1.28% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012. The Adviser did not waive fees and/or reimbursed expenses during the period under this limitation.

  Prior to the Reorganization, MS Investment Management had voluntarily agreed to waive fees and/or reimburse expenses of Class I and Class II shares to 1.05% and 1.15%, respectively of the Acquired Fund’s average daily net assets.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  Prior to the Reorganization, investment advisory fees paid by the Acquired Fund were reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class shares.

  For the year ended December 31, 2010, the Adviser and MS Investment Management waived advisory fees of $9,215 and $5,341, respectively.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $45,220 for accounting and fund administrative services and reimbursed $427,809 for services provided by insurance companies. Prior to the Reorganization, the Acquired Fund paid an administration fee of $302,433 to MS Investment Management and JPMorgan Investor Services Co.

  Also, the Trust has entered into service agreements whereby State Street Bank & Trust Company (“SSB”) serves as custodian, fund accountant and provide certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. Prior to the Reorganization, the Acquired Fund paid $1,118 to Morgan Stanley Services Company Inc., which served as the Acquired Fund’s transfer agent.

  For the year ended December 31, 2010, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund.

  Prior to the Reorganization, the Acquired Fund paid distribution fees to Morgan Stanley Distribution Inc. (MSDI) based on the annual rate of 0.35% of the Acquired Fund’s average daily net assets of Class II shares. MSDI had voluntarily agreed to waive 0.25% distribution fee that it received. MSDI was paid distribution fees of $53,410, after fee waivers of $133,477.

  For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

Invesco Van Kampen V.I. Mid Cap Value Fund

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1			Level 2		Level 3		Total
Equity Securities	$	315,201,929		$	—	$	—	$	315,201,929
Options*		(24,255	)		—		—		(24,255	)
Total Investments	$	315,177,674		$	—	$	—	$	315,177,674

*  Unrealized appreciation (depreciation).

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuance to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $622,350 and securities sales of $404,584, which resulted in net realized gains of $72,390.

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the period ended June 1, 2010 to December 31, 2010, the Fund paid legal fees of $780 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

Invesco Van Kampen V.I. Mid Cap Value Fund

NOTE 7—Option Contracts Written

Transactions During the Period
	Call Option Contracts
	Number of		Premiums
	Contracts		Received
Written		215	$	67,120

Open Options Written at Period-End

Unrealized

Contract

Strike

Number of

Premiums

Appreciation

Month

Price

Contracts

Received

Value

(Depreciation)

Calls

Beckman Coulter, Inc.

Feb-11

$

75

215

$

67,120

$

91,375

$

(24,255

)

NOTE 8—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	2,585,879	$	2,990,505

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	1,958,286
Net unrealized appreciation — investments		37,877,280
Net unrealized appreciation (depreciation) — other investments		(24,255	)
Temporary book/tax differences		(2,581	)
Capital loss carryforward		(53,219,679	)
Shares of beneficial interest		327,867,413
Total net assets	$	314,456,464

  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 utilized $16,557,673 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	18,692,646
December 31, 2017		34,527,033
Total capital loss carryforward	$	53,219,679

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

Invesco Van Kampen V.I. Mid Cap Value Fund

NOTE 9—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $109,734,251 and $139,568,356, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	43,193,629
Aggregate unrealized (depreciation) of investment securities		(5,316,349	)
Net unrealized appreciation of investment securities	$	37,877,280
Cost of investments for tax purposes is $277,324,649.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of prior provision adjustment, on December 31, 2010, undistributed net investment income was decreased by $39,309, undistributed net realized gain was increased by $24,122 and shares of beneficial interest increased by $15,187. This reclassification had no effect on the net assets of the Fund.

NOTE 11—Share Information

	Summary of Share Activity
	Year ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		735,988		$	8,422,816			1,020,122		$	8,047,125
Series II		2,861,100			32,148,812			2,173,867			18,541,180
Issued as reinvestment of dividends:
Series I		130,767			1,468,515			231,041			1,846,024
Series II		100,033			1,117,364			143,779			1,144,481
Reacquired:
Series I		(3,211,388	)		(36,682,133	)		(4,278,358	)		(37,102,650	)
Series II		(2,538,804	)		(28,890,493	)		(1,944,912	)		(17,072,160	)
Net increase (decrease) in share activity		(1,922,304	)	$	(22,415,119	)		(2,654,461	)	$	(24,596,000	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 77% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

Invesco Van Kampen V.I. Mid Cap Value Fund

NOTE 12—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																											Ratio of			Ratio of
																											expenses			expenses
					Net gains																						to average			to average net			Ratio of net
	Net asset		Net		(losses) on						Dividends			Distributions													net assets			assets without			investment
	value,		investment		securities (both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		income		realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)(a)		unrealized)			operations			income			gains			Distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	10.56	$	0.08	$	2.25		$	2.33		$	(0.10	)	$	—		$	(0.10	)	$	12.79		22.24	%	$	162,472		1.02	%(d)		1.03	%(d)		0.72	%(d)		40	%
Year ended 12/31/09		7.69		0.10		2.88			2.98			(0.11	)		—			(0.11	)		10.56		39.21			158,853		1.02			1.02			1.12			64
Year ended 12/31/08		19.11		0.13		(6.43	)		(6.30	)		(0.14	)		(4.98	)		(5.12	)		7.69		(41.29	)		138,914		1.01			1.01			0.95			53
Year ended 12/31/07		19.74		0.13		1.53			1.66			(0.14	)		(2.15	)		(2.29	)		19.11		7.84			302,575		1.01			1.01			0.62			68
Year ended 12/31/06		18.75		0.13		3.35			3.48			(0.06	)		(2.43	)		(2.49	)		19.74		20.70			381,064		1.01			1.01			0.67			65
Series II
Year ended 12/31/10		10.50		0.07		2.25			2.32			(0.10	)		—			(0.10	)		12.72		22.18			151,985		1.12	(d)		1.32	(d)		0.62	(d)		40
Year ended 12/31/09		7.64		0.09		2.87			2.96			(0.10	)		—			(0.10	)		10.50		39.16			121,046		1.12			1.37			1.01			64
Year ended 12/31/08		19.04		0.11		(6.41	)		(6.30	)		(0.12	)		(4.98	)		(5.10	)		7.64		(41.42	)		85,258		1.11			1.36			0.89			53
Year ended 12/31/07		19.68		0.11		1.52			1.63			(0.12	)		(2.15	)		(2.27	)		19.04		7.74			134,886		1.11			1.36			0.54			68
Year ended 12/31/06		18.70		0.11		3.34			3.45			(0.04	)		(2.43	)		(2.47	)		19.68		20.62			108,859		1.11			1.36			0.59			65

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $158,601 and $133,400 for Series I and Series II shares, respectively.

NOTE 13—Change in Independent Registered Public Accounting Firm (unaudited)

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Invesco Van Kampen V.I. Mid Cap Value Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco Van Kampen V.I. Mid Cap Value Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen V.I. Mid Cap Value Fund (formerly known as Universal Institutional Funds Mid Cap Value Portfolio; one of the funds constituting Invesco Variable Insurance Funds (formerly known as AIM Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 19, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco Van Kampen V.I. Mid Cap Value Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,223.90	$	5.77	$	1,020.01	$	5.24		1.03	%
Series II		1,000.00		1,224.30		6.34		1,091.51		5.75		1.13

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco Van Kampen V.I. Mid Cap Value 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco Van Kampen V.I. Mid Cap Value Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

Invesco Van Kampen V.I. Value Fund

Annual Report to Shareholders ▪ December 31, 2010

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund’s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07452 and 033-57340. The Fund’s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies (“variable products”) that invest in the Fund.

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 on the Invesco website, invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is available at invesco.com/proxysearch. In addition, this information is available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is available on the SEC website under the predecessor fund.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing.

Invesco Distributors, Inc.

VK-VIVAL-AR-1

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Management’s Discussion of Fund Performance

Performance summary

For the 12 months ended December 31, 2010, Invesco Van Kampen V.I. Value Fund performed in line with its style-specific index, the Russell 1000 Value Index. The Fund’s performance was helped by stock selection and an overweight position in the consumer discretionary sector. Alternatively, stock selection in the information technology (IT) sector detracted the most from the Fund’s performance versus the index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 12/31/09 to 12/31/10, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	15.74	%
Series II Shares	15.50
S&P 500 Index▼ (Broad Market Index)	15.08
Russell 1000 Value Index▼ (Style-Specific Index)	15.51

^▼ Lipper Inc.

How we invest

We seek to exploit market inefficiencies by investing in companies that appear undervalued relative to the overall market. Ultimately, we believe that the market will recognize the value in these companies and will sell them as their stock price begins to reflect their intrinsic value. We feel that stock picking, as compared to making sector bets, provides a more consistent path to potential success. In addition, we may be able to take advantage of pricing anomalies by purchasing undervalued stocks before a recognizable catalyst arises.

     The Fund’s primary investable universe includes all U.S. denominated equities. In order to distill the investment universe, we filter for companies with sufficient liquidity. We filter the remaining securities on valuation metrics depending upon the growth or cyclical nature of their business. The result of this filtering process is a pool of securities that we believe are statistically inexpensive relative to the broader market. Companies identified in the ifltering process are thoroughly

analyzed to assess intrinsic value and their ability to achieve fair value.

     We will purchase a security only if we believe the potential for stock price appreciation outweighs potential downside risk. To be eligible for inclusion in the Fund, a stock must meet the following criteria:

n	The security is statistically cheap on the basis of its primary valuation criteria, which depends on the cyclical or growth nature of its business.
n	Rigorous fundamental analysis shows that the company is undervalued and possesses potential financial strength and improved quality of management for future growth.

     We maintain an intense focus on the quality of a company’s accounting and on financial statement analysis. Portfolio construction is bottom-up and stock specific, concentrating on individual company fundamental analysis and valuations. Therefore, while we monitor and are aware of our positions relative to the benchmark, it does not play a major role in the construction of the Fund.

     We look to manage risk through portfolio construction, chiefly diversification across most major sectors, and through the assistance of an independent quantitative risk control group. Risk management is continual. The Fund is regularly reviewed to ensure it is optimally constructed on a risk/reward basis We have the final say on construction of the Fund and a collegial relationship exists between the risk management team and the Fund teams.

     Our sell discipline is just as important as the buy decision and is based on the same principles: relative value and fundamentals. While no sale is automatic, a security is typically sold if it meets one or more of the following criteria:

n	We believe the target price has been realized, and we no longer consider the company undervalued.
n	We determine that a better value opportunity can be found elsewhere.
n	Our research shows that a company is experiencing deteriorating fundamentals beyond what we feel to be a tolerable level, and the trend is likely to be a long-term issue.

Market conditions and your Fund

Equity markets were choppy during the fiscal year as investors weighed the competing issues of solid corporate profits and soft macroeconomic data. Corporate earnings were largely positive but often were overshadowed by concerns about high unemployment, weak consumer spending, soft housing data and the possibility of additional U.S. Federal Reserve accommodation. After rising through April, major equity indexes sold off precipitously in May as the sovereign debt crisis unfolded in the eurozone while U.S. economic indicators remained weak, prompting fears of a “double-dip” recession. Uncertainty

Portfolio Composition

By sector

Financials	21.0	%
Consumer Discretionary	17.3
Health Care	12.0
Energy	10.5
Information Technology	10.4
Consumer Staples	9.1
Industrials	6.9
Materials	5.2
Telecommunication Services	4.0
Utilities	1.5
Money Market Funds
Plus Other Assets Less Liabilities	2.1

Top 10 Equity Holdings*

1.	Comcast Corp.-Class A	4.8	%
2.	Viacom Inc.-Class B	3.7
3.	JPMorgan Chase & Co.	3.0
4.	International Paper Co.	2.9
5.	Pfizer, Inc.	2.5
6.	Haliburton Co.	2.4
7.	Chubb Corp. (The)	2.2
8.	Kraft Foods Inc.-Class A	2.2
9.	Chevron Corp.	2.2
10.	Bank of New York Mellon Corp. (The)	2.1

Total Net Assets	$24.3 million
Total Number of Holdings*		77

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.

Invesco Van Kampen V.I. Value Fund

created by the debt crisis – combined with subdued employment, consumer spending and housing data – added to concerns that the recovery was slowing. Just as abruptly, however, the markets reversed course starting in September and rallied through the end of the year on modestly better economic news.

     Major equity indexes produced positive returns for the fiscal year, and all 10 sectors of the S&P 500 Index posted gains. More economically sensitive sectors such as consumer discretionary and industrials had the highest returns, while less economically sensitive sectors such as health care had some of the lowest returns.

     In this environment, the Fund performed in line with its style-specific benchmark, the Russell 1000 Value Index. The Fund’s consumer discretionary exposure acted as the largest contributor to relative and absolute returns. The Fund’s notable overweight position in this sector, combined with strong stock selection, contributed to Fund performance. Specifically, the Fund’s holdings in media companies Comcast and Viacom made significant contributions to results as both stocks posted strong double-digit returns for the year.

     Financials acted as another primary driver of relative performance when measured against the Russell 1000 Value Index. Specifically, the Fund’s material overweight exposure to the property and casualty insurance industry enhanced Fund returns. Chubb, a property and casualty insurance company, was one of the Fund’s largest holdings for much of 2010. The company’s strong performance was due to its strong balance sheet and the company’s well-diversified, conservative underwriting policies. Chubb has done an admirable job of returning cash to shareholders through buybacks and dividends, while operating in a difficult pricing environment.

     The IT sector was the largest detractor from relative performance. Among technology stocks, the Fund’s overweight exposure to the sector, combined with unfavorable stock selection among hardware and select Internet-related companies, dampened Fund returns. More specifically, the unexpected departure of the chief executive officer of Fund holding Hewlett Packard temporarily weighed heavily on the company’s shares. Shares of Yahoo!, a relatively new addition to the portfolio, were weak as investors questioned the rate and sustainability of the recovery in advertising and the economic environment in general.

     Stock selection in materials and a small overweight position in the health care sector also detracted from our results relative to the Russell 1000 Value Index.

     Toward the end of the reporting period, we paired down our exposure to select insurance and media names, using the proceeds to opportunistically increase the Fund’s exposure to energy and industrial companies.

     We believe that market volatility, and the market correction that occurred during the second quarter of 2010, created opportunities to invest in companies with attractive valuations. Our contrarian philosophy and deep value approach of buying extremely undervalued companies may capitalize on market volatility and down markets as value is created for new investment opportunities.

     Equity markets experienced a strong recovery during the period covered by this report. We would like to caution investors against making investment decisions based on short-term performance. We recommend that you consult your financial adviser to discuss your individual financial program.

     Thank you for your investment in Invesco Van Kampen V.I. Value Fund and for sharing our long-term investment horizon.

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. 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.

Kevin Holt
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco Van Kampen V.I. Value Fund. He joined Invesco in 2010. Mr. Holt earned a B.A. from the University of Iowa and an M.B.A. from the University of Chicago.

Devin Armstrong
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Value Fund. He joined Invesco in 2010. Mr. Armstrong earned a B.S. in psychology and finance from the University of Illinois and an M.B.A. in finance from Columbia University.

Jason Leder
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Value Fund. He joined Invesco in 2010. Mr. Leder earned a B.A. from The University of Texas and an M.B.A. from Columbia University.

Matthew Seinsheimer
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Value Fund. He joined Invesco in 1992. Mr. Seinsheimer earned a B.B.A. from Southern Methodist University and an M.B.A. from The University of Texas at Austin.

James Warwick
Portfolio manager, is manager of Invesco Van Kampen V.I. Value Fund. He joined Invesco in 2010. Mr. Warwick earned a B.B.A. from Stephen F. Austin State University and an M.B.A. from the University of Houston.

Invesco Van Kampen V.I. Value Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 12/31/96, Fund data from 1/2/97

Past performance cannot guarantee comparable future results.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or

100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

Average Annual Total Returns

As of 12/31/10

Series I Shares
Inception (1/2/97)			5.46	%
	10	Years	3.78
	5	Years	1.96
	1	Year	15.74
Series II Shares
	10	Years	3.53	%
	5	Years	1.72
	1	Year	15.50

Effective June 1, 2010, Class I shares of the predecessor fund advised by Morgan Stanley Investment Management Inc. were reorganized into Series I shares, respectively, of Invesco Van Kampen V.I. Value Fund. Returns shown above for Series I shares are blended returns of the predecessor fund and Invesco Van Kampen V.I. Value Fund. Share class returns will differ from the predecessor fund because of different expenses.

     Series II shares incepted on June 1, 2010. Series II shares performance shown prior to that date is that of the predecessor fund’s Class I shares restated to reflect the higher 12b-1 fees applicable to Series II shares. Class I shares performance reflects any applicable fee waivers or expense

reimbursements. The inception date of the predecessor fund’s Class I shares is January 2, 1997.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.86% and 1.11%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 1.22% and 1.47%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Invesco Van Kampen V.I. Value Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return.

     The most recent month-end performance data at the Fund level, excluding variable product charges, is available at 800 451 4246. As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser.

     Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

Invesco Van Kampen V.I. Value Fund

Invesco Van Kampen V.I. Value Fund’s investment objective is above-average total return over a market cycle of three to five years by investing primarily in a portfolio of common stocks and other equity securities.

n	Unless otherwise stated, information presented in this report is as of December 31, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus, visit invesco.com/fundreports.

Principal risks of investing in the Fund

In general, stock and other equity security values fluctuate, and sometimes widely fluctuate, in response to activities specific to the company as well as general market, economic and political conditions. Investments in convertible securities subject the Fund to the risks associated with both fixed income securities, including credit risk and interest rate risk, and common stocks.

     The Fund emphasizes a value style of investing, which focuses on undervalued companies with characteristics for improved valuations. This style of investing is subject to the risk that the valuations never improve or that the returns on “value” equity securities are less than returns on other styles of investing or the overall stock market. Value stocks also may decline in price, even though in theory they are already underpriced

     Investments in foreign markets entail special risks such as currency, political, economic and market risks. There also may be greater market volatility, less reliable financial information, higher transaction and custody costs, decreased market liquidity and less government and exchange regulation associated with investments in foreign markets.

      All fixed income securities are subject to two types of risk: credit risk and interest rate risk. When the general level of interest rates goes up, the prices of most fixed income securities go down. When the general level of interest rates goes down, the prices of most fixed income securities go up.

      With respect to U.S. government securities that are not backed by the full faith and credit of the U.S. government, there is the risk that the U.S. government will not provide financial support to such U.S. government agencies, instrumentalities or sponsored enterprises if it is not obligated to do so by law.

     Investing in real estate investment trusts (REITs) makes a fund more susceptible to risks associated with the ownership of real estate and with the real estate industry in general and may involve duplication of management fees and other expenses. REITs and foreign real estate companies may be less diversified than other pools of securities, may have lower trading volumes and may be subject to more abrupt or erratic price movements than the overall securities markets.

About indexes used in this report

The S&P 500^® Index is an unmanaged index considered representative of the U.S. stock market.

     The Russell 1000^® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell^® is a trademark of the Frank Russell Co.

     The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).

     A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

     Industry 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.

     The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights. Additionally, the returns and net asset values shown throughout this report are at the Fund level only and do not include variable product issuer charges. If such charges were included, the total returns would be lower.

Invesco Van Kampen V.I. Value Fund

Schedule of Investments^(a)

December 31, 2010

	Shares		Value
Common Stocks & Other Equity Interests–97.85%
Aerospace & Defense–1.29%
Honeywell International Inc.		5,904	$	313,857
Aluminum–1.83%
Alcoa Inc.		28,914		444,986
Asset Management & Custody Banks–2.53%
Bank of New York Mellon Corp. (The)		16,729		505,216
State Street Corp.		2,351		108,945
				614,161
Automobile Manufacturers–0.75%
General Motors Co.(b)		4,918		181,277
Cable & Satellite–6.98%
Comcast Corp.–Class A		52,636		1,156,413
DIRECTV–Class A(b)		3,667		146,423
Time Warner Cable Inc.		5,980		394,860
				1,697,696
Communications Equipment–0.87%
Cisco Systems, Inc.(b)		10,465		211,707
Computer Hardware–2.83%
Dell Inc.(b)		18,486		250,485
Hewlett-Packard Co.		10,379		436,956
				687,441
Data Processing & Outsourced Services–0.29%
Western Union Co.		3,815		70,845
Department Stores–0.76%
JC Penney Co., Inc.		3,631		117,318
Macy’s, Inc.		2,682		67,854
				185,172
Diversified Banks–1.93%
U.S. Bancorp		6,464		174,334
Wells Fargo & Co.		9,555		296,110
				470,444
Diversified Chemicals–0.41%
E. I. du Pont de Nemours and Co.		1,986		99,062
Drug Retail–1.56%
CVS Caremark Corp.		10,887		378,541
Electric Utilities–1.19%
American Electric Power Co., Inc.		3,036		109,235
FirstEnergy Corp.		4,891		181,065
				290,300
Electrical Components & Equipment–0.83%
Emerson Electric Co.		3,526		201,581
General Merchandise Stores–0.44%
Target Corp.		1,763		106,009
Health Care Distributors–1.40%
Cardinal Health, Inc.		8,911		341,380
Home Improvement Retail–1.84%
Home Depot, Inc. (The)		6,268		219,756
Lowe’s Cos., Inc.		9,108		228,429
				448,185
Household Products–0.29%
Procter & Gamble Co. (The)		1,087		69,927
Hypermarkets & Super Centers–1.56%
Wal-Mart Stores, Inc.		7,034		379,344
Industrial Conglomerates–3.44%
General Electric Co.		18,118		331,378
Textron Inc.		6,750		159,570
Tyco International Ltd.		8,325		344,988
				835,936
Industrial Machinery–1.34%
Ingersoll-Rand PLC (Ireland)		6,920		325,863
Integrated Oil & Gas–6.43%
BP PLC–ADR (United Kingdom)		5,252		231,981
Chevron Corp.		5,778		527,243
ConocoPhillips		3,439		234,196
Royal Dutch Shell PLC–ADR (United Kingdom)		5,918		395,204
Total S.A.–ADR (France)		3,236		173,061
				1,561,685
Integrated Telecommunication Services–3.06%
AT&T Inc.		11,052		324,708
Verizon Communications Inc.		11,743		420,164
				744,872
Internet Software & Services–3.70%
eBay Inc.(b)		17,790		495,096
Yahoo! Inc.(b)		24,357		405,057
				900,153
Investment Banking & Brokerage–2.14%
Goldman Sachs Group, Inc. (The)		1,543		259,471
Morgan Stanley		9,563		260,209
				519,680

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Value Fund

	Shares		Value
IT Consulting & Other Services–0.61%
Accenture PLC–Class A (Ireland)		3,036	$	147,216
Life & Health Insurance–2.98%
Aflac, Inc.		2,155		121,607
MetLife, Inc.		7,639		339,477
Torchmark Corp.		4,407		263,274
				724,358
Managed Health Care–2.36%
UnitedHealth Group Inc.		11,433		412,846
WellPoint Inc.(b)		2,840		161,482
				574,328
Movies & Entertainment–6.55%
News Corp.–Class B		20,174		331,257
Time Warner Inc.		11,295		363,360
Viacom Inc.–Class B		22,639		896,731
				1,591,348
Multi-Utilities–0.30%
Sempra Energy		1,371		71,950
Oil & Gas Drilling–0.51%
Noble Corp.		3,463		123,872
Oil & Gas Equipment & Services–3.60%
Halliburton Co.		14,459		590,361
Weatherford International Ltd.(b)		12,473		284,384
				874,745
Other Diversified Financial Services–6.37%
Bank of America Corp.		35,261		470,382
Citigroup Inc.(b)		74,926		354,400
JPMorgan Chase & Co.		17,067		723,982
				1,548,764
Packaged Foods & Meats–3.74%
Kraft Foods, Inc.–Class A		16,959		534,378
Unilever N.V.- New York Shares (Netherlands)		11,911		374,005
				908,383
Paper Products–2.93%
International Paper Co.		26,120		711,509
Personal Products–0.49%
Avon Products, Inc.		4,073		118,361
Pharmaceuticals–8.23%
Abbott Laboratories		3,588		171,901
Bristol-Myers Squibb Co.		18,262		483,578
GlaxoSmithKline PLC–ADR (United Kingdom)		3,527		138,329
Merck & Co., Inc.		12,019		433,165
Pfizer Inc.		35,286		617,858
Roche Holdings AG–ADR (Switzerland)		4,211		154,733
				1,999,564
Property & Casualty Insurance–3.65%
Chubb Corp. (The)		9,144		545,348
Travelers Cos., Inc. (The)		6,128		341,391
				886,739
Regional Banks–1.38%
PNC Financial Services Group, Inc.		5,525		335,478
Semiconductor Equipment–0.50%
KLA-Tencor Corp.		3,136		121,175
Semiconductors–0.97%
Intel Corp.		11,212		235,788
Soft Drinks–1.47%
Coca-Cola Co. (The)		4,283		281,693
PepsiCo, Inc.		1,175		76,763
				358,456
Systems Software–0.60%
Microsoft Corp.		5,219		145,714
Wireless Telecommunication Services–0.92%
Vodafone Group PLC–ADR (United Kingdom)		8,423		222,620
Total Common Stocks & Other Equity Interests (Cost $21,201,849)				23,780,472
Money Market Funds–2.36%
Liquid Assets Portfolio–Institutional Class(c)		286,758		286,758
Premier Portfolio–Institutional Class(c)		286,758		286,758
Total Money Market Funds (Cost $573,516)				573,516
TOTAL INVESTMENTS–100.21% (Cost $21,775,365)				24,353,988
OTHER ASSETS LESS LIABILITIES–(0.21)%				(50,517	)
NET ASSETS–100.00%			$	24,303,471

Investment Abbreviations:

ADR – American Depositary Receipt

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	Non-income producing security.
(c)	The money market fund and the Fund are affiliated by having the same investment adviser.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Value Fund

Statement of Assets and Liabilities

December 31, 2010

Assets:
Investments, at value (Cost $21,201,849)	$	23,780,472
Investments in affiliated money market funds, at value and cost		573,516
Total investments, at value (Cost $21,775,365)		24,353,988
Receivable for:
Investments sold		22,617
Fund shares sold		9,530
Dividends		27,493
Investment for trustee deferred compensation and retirement plans		1,071
Total assets		24,414,699
Liabilities:
Payable for:
Investments purchased		38,717
Fund shares reacquired		3,930
Accrued fees to affiliates		38,941
Accrued other operating expenses		28,568
Trustee deferred compensation and retirement plans		1,072
Total liabilities		111,228
Net assets applicable to shares outstanding	$	24,303,471
Net assets consist of:
Shares of beneficial interest	$	28,095,037
Undistributed net investment income		310,609
Undistributed net realized gain (loss)		(6,680,798	)
Unrealized appreciation		2,578,623
	$	24,303,471
Net Assets:
Series I	$	24,291,548
Series II	$	11,923
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Series I		2,522,099
Series II		1,239
Series I:
Net asset value per share	$	9.63
Series II:
Net asset value per share	$	9.62

Statement of Operations

For the year ended December 31, 2010

Investment income:
Dividends (net of foreign withholding taxes of $4,927)	$	511,366
Dividends from affiliated money market funds		405
Total investment income		511,771
Expenses:
Advisory fees		127,371
Administrative services fees		87,024
Custodian fees		5,140
Distribution fees — Series II		16
Transfer agent fees		2,196
Trustees’ and officers’ fees and benefits		7,208
Professional services fees		27,482
Other		13,123
Total expenses		269,560
Less: Fees waived		(72,167	)
Net expenses		197,393
Net investment income		314,378
Realized and unrealized gain from:
Net realized gain from investment securities (includes net gains from securities sold to affiliates of $36,612)		545,439
Change in net unrealized appreciation of investment securities		2,538,222
Net realized and unrealized gain		3,083,661
Net increase in net assets resulting from operations	$	3,398,039

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

Invesco Van Kampen V.I. Value Fund

Statement of Changes in Net Assets

For the years ended December 31, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	314,378		$	348,940
Net realized gain (loss)		545,439			(2,293,566	)
Change in net unrealized appreciation		2,538,222			7,640,320
Net increase in net assets resulting from operations		3,398,039			5,695,694
Distributions to shareholders from net investment income:
Series I		(348,598	)		(716,371	)
Share transactions-net:
Series I		(2,508,731	)		(2,730,935	)
Series II		10,000			—
Net increase (decrease) in net assets resulting from share transactions		(2,498,731	)		(2,730,935	)
Net increase in net assets		550,710			2,248,388
Net assets:
Beginning of year		23,752,761			21,504,373
End of year (includes undistributed net investment income of $310,609 and $344,829, respectively)	$	24,303,471		$	23,752,761

Notes to Financial Statements

December 31, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen V.I. Value Fund (the “Fund”) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance 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 consisting of forty-one separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission (“SEC”) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class.

  Prior to June 1, 2010, the Fund operated as Universal Institutional Funds Value Portfolio (the “Acquired Fund”), an investment portfolio of The Universal Institutional Funds, Inc. The Acquired Fund was reorganized on June 1, 2010 (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class I shares received Series I shares of the Fund. Information for the Acquired Fund’s Class I shares prior to the Reorganization is included with Series I shares of the Fund throughout this report.

  The Fund’s investment objective is above-average total return over a market cycle of three to five years by investing primarily in a portfolio of common stocks and other equity securities.

  The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies (“variable products”).

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.

Security Valuations — Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).

Invesco Van Kampen V.I. Value Fund

	Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
	Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution- size trading in similar groups of securities, developments related to specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments.
	Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security’s fair value.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.

Invesco Van Kampen V.I. Value Fund

	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Net Assets	Rate
First $500 million		0	.55%
Next $500 million		0	.50%
Over $1 billion		0	.45%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee of $54,279 to Morgan Stanley Investment Management Inc. (“MSIM”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed, through at least June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 0.86% and Series II shares to 1.11% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Prior to the Reorganization, MS Investment Management had voluntarily agreed to waive fees and/or reimburse expenses of Class I shares to 0.85% of the Acquired Fund’s average daily net assets.

  Further, the Adviser has contractually agreed, through at least June 30, 2011, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  Prior to the Reorganization, investment advisory fees paid by the Acquired Fund were reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class shares.

  For the year ended December 31, 2010, the Adviser and MSIM waived advisory fees of $45,201 and $26,966, respectively.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants’ accounts. Pursuant to such agreement, for the year ended December 31, 2010, Invesco was paid $29,315 for accounting and fund administrative services and reimbursed $33,256 for services provided by insurance companies. Prior to the Reorganization, the Acquired Fund paid an administration fee of $24,453 to MSIM and JPMorgan Investor Services Co.

  Also, the Trust has entered into service agreements whereby State Street Bank & Trust Company (“SSB”) serves as custodian, fund accountant and provide certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. Prior to the Reorganization, the Acquired Fund paid $96 to Morgan Stanley Services Company Inc., which served as the Acquired Fund’s

Invesco Van Kampen V.I. Value Fund

transfer agent. For the year ended December 31, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into a master distribution agreement with IDI to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Series II shares (the “Plan”). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the year ended December 31, 2010, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of December 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended December 31, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	24,199,255	$	154,733	$	—	$	24,353,988

NOTE 4—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2010, the Fund engaged in securities purchases of $16,660 and securities sales of $109,973, which resulted in net realized gains of $36,612.

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended December 31, 2010, the Fund paid legal fees of $595 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

Invesco Van Kampen V.I. Value Fund

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2010 and 2009:

	2010		2009
Ordinary income	$	348,598	$	716,371

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	311,574
Net unrealized appreciation — investments		2,280,941
Temporary book/tax differences		(975	)
Capital loss carryforward		(6,383,106	)
Shares of beneficial interest		28,095,037
Total net assets	$	24,303,471

  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 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 utilized $544,166 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of December 31, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
December 31, 2016	$	1,878,019
December 31, 2017		4,505,087
Total capital loss carryforward	$	6,383,106

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2010 was $4,066,849 and $6,446,633, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	3,311,277
Aggregate unrealized (depreciation) of investment securities		(1,030,336	)
Net unrealized appreciation of investment securities	$	2,280,941
Cost of investments for tax purposes is $22,073,047.

Invesco Van Kampen V.I. Value Fund

NOTE 9—Share Information

	Summary of Share Activity
	Years ended December 31,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Series I		105,255		$	905,209			165,564		$	1,168,035
Series II(b)		1,239			10,000			—			—
Issued as reinvestment of dividends:
Series I		41,849			348,598			108,871			716,371
Series II(b)		—			—			—			—
Reacquired:
Series I		(436,185	)		(3,762,538	)		(678,120	)		(4,615,341	)
Series II(b)		—			—			—			—
Net increase (decrease) in share activity		(287,842	)	$	(2,498,731	)		(403,685	)	$	(2,730,935	)

(a)

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 97% of the outstanding shares of the Fund. The Fund and the Fund’s principal underwriter or adviser, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

(b)

Commencement date of June 1, 2010.

NOTE 10—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																											Ratio of			Ratio of
					Net gains																						expenses			expenses
					(losses)																						to average			to average net			Ratio of net
	Net asset				on securities						Dividends			Distributions													net assets			assets without			investment
	value,		Net		(both			Total from			from net			from net						Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			Distributions			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/10	$	8.45	$	0.12	$	1.19		$	1.31		$	(0.13	)	$	—		$	(0.13	)	$	9.63		15.74	%	$	24,292		0.85	%(d)		1.16	%(d)		1.36	%(d)		18	%
Year ended 12/31/09		6.69		0.12		1.88			2.00			(0.24	)		—			(0.24	)		8.45		31.00	(e)		23,753		0.85	(f)		0.97	(f)		1.66	(f)(g)		21
Year ended 12/31/08		13.17		0.21		(4.43	)		(4.22	)		(0.37	)		(1.89	)		(2.26	)		6.69		(35.85	)		21,504		0.87	(f)(h)		1.04	(f)		2.15	(f)(g)		19
Year ended 12/31/07		14.87		0.25		(0.57	)		(0.32	)		(0.29	)		(1.09	)		(1.38	)		13.17		(3.07	)		46,863		0.85	(f)		0.91	(f)		1.69	(f)(g)		17
Year ended 12/31/06		14.49		0.26		1.96			2.22			(0.27	)		(1.57	)		(1.84	)		14.87		16.89			70,091		0.85			0.93			1.83	(g)		23
Series II
Year ended 12/31/10(i)		8.07		0.06		1.49			1.55			—			—			—			9.62		19.21			12		1.11	(d)(j)		1.57	(d)(j)		1.10	(d)(j)		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. Total returns are not annualized for periods less than one year, if applicable and do not reflect charges assessed in connection with a variable product, which if included would reduce total returns.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s) of $23,152 and $11 for Series I and Series II shares, respectively
(e)	Performance was positively impacted by approximately 1.40% due to the receipt of proceeds from the settlements of class action suits involving primarily two of the Fund’s past holdings. This was a one-time settlement, and as a result, the impact on the NAV and consequently the performance will not likely be repeated in the future. Had these settlements not occurred, the total return would have been approximately 29.60%.
(f)	The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is less than 0.005%.
(g)	Ratio of net investment income to average net assets without fee waivers and/or expenses absorbed was 1.54%, 1.98%, 1.63% and 1.75% for the years ended December 31, 2009, 2008, 2007 and 2006, respectively.
(h)	Ratio of Expenses to Average Net Assets Excluding Bank Overdraft Expense was 0.85%.
(i)	Commencement date of June 1, 2010.
(j)	Annualized.

Invesco Van Kampen V.I. Value Fund

NOTE 11—Significant Event

The Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco Van Kampen V.I. Comstock Fund (the “Acquiring Fund”) in exchange for shares of the Acquiring Fund. The Agreement requires approval of the Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

NOTE 12—Change in Independent Registered Public Accounting Firm (unaudited)

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Invesco Van Kampen V.I. Value Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

and Shareholders of Invesco Van Kampen V.I. Value Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen V.I. Value Fund (formerly known as Universal Institutional Funds Value Portfolio; one of the funds constituting Invesco Variable Insurance Funds (formerly known as AIM Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended December 31, 2009 and prior were audited by other independent auditors whose report dated February 19, 2010 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

February 9, 2011

Houston, Texas

Invesco Van Kampen V.I. Value Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur ongoing costs, including management fees; distribution and/or service fees (12b-1); 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 July 1, 2010 through December 31, 2010.

  The actual and hypothetical expenses in the examples below do not represent the effect of any fees or other expenses assessed in connection with a variable product; if they did, the expenses shown would be higher while the ending account values shown would be lower.

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. Therefore, the hypothetical information is useful in comparing ongoing costs, and will not help you determine the relative total costs of owning different funds.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(07/01/10)		(12/31/10)1		Period2		(12/31/10)		Period2		Ratio
Series I	$	1,000.00	$	1,230.50	$	4.83	$	1,020.87	$	4.38		0.86	%
Series II		1,000.00		1,230.20		6.24		1,019.61		5.65		1.11

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2010 through December 31, 2010, 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.

Invesco Van Kampen V.I. Value 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 advisors.

  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 December 31, 2010:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

Invesco Van Kampen V.I. Value Fund

Trustees and Officers

The address of each trustee and officer is AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, 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.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, 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)	208	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, Invesco Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	208	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	226	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	208	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	226	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

¹ Mr. Flanagan is considered an interested person 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 to the Trust.

² Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.

³ Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2004	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	208	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	208	None
James T. Bunch — 1942 Trustee	2004	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	208	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Vice Chairman of Anixter International. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	226	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	208	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	208	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	208	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	208	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	208	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	208	None
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	226	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	208	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and Chief Legal Officer, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	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 prospectus for information on the Fund’s sub-advisers.

Office of the Fund
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Counsel to the Fund
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square

Philadelphia, PA 19103

Investment Adviser
Invesco Advisers, Inc.
1555 Peachtree Street, N.E.
Atlanta, GA 30309

Counsel to the
Independent Trustees

Kramer, Levin, Naftalis & Frankel
LLP
1177 Avenue of the Americas
New York, NY 10036-2714

Distributor
Invesco Distributors, Inc.
11 Greenway Plaza,
Suite 2500
Houston, TX 77046-1173

Transfer Agent
Invesco Investment Services,
Inc.
P.O. Box 4739

Houston, TX 77210-4739

Auditors
PricewaterhouseCoopers LLP
1201 Louisiana Street,
Suite 2900
Houston, TX 77002-5678

Custodian
State Street bank and Trust Company

225 Franklin

Boston, MA 02110-2801

T-4

ITEM 2. CODE OF ETHICS.

As of the end of the period covered by this report, the Registrant had adopted a code of ethics (the “Code”) that applies to the Registrant’s principal executive officer (“PEO”) and principal financial officer (“PFO”). The Code was amended in June, 2010, to (i) add an individual to Exhibit A and (ii) update the names of certain legal entities. 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 expert is Raymond Stickel, Jr. Mr. Stickel is “independent” within the meaning of that term as used in Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Fees Billed by PWC Related to the Registrant

     PWC billed the Registrant aggregate fees for services rendered to the Registrant for the last two fiscal years as follows:

			Percentage of Fees					Percentage of Fees
			Billed Applicable to					Billed Applicable to
			Non-Audit Services					Non-Audit Services
			Provided for fiscal					Provided for fiscal
	Fees Billed for		year end 2010			Fees Billed for		year end 2009
	Services Rendered to		Pursuant to Waiver of			Services Rendered to		Pursuant to Waiver of
	the Registrant for		Pre-Approval			the Registrant for		Pre-Approval
	fiscal year end 2010		Requirement(1)			fiscal year end 2009		Requirement(1)
Audit Fees	$	972,550		N/A		$	556,364		N/A
Audit-Related Fees	$	0		0	%	$	0		0	%
Tax Fees(2)	$	99,500		0	%	$	75,879		0	%
All Other Fees	$	0		0	%	$	0		0	%
Total Fees	$	1,072,050		0	%	$	632,243		0	%

PWC billed the Registrant aggregate non-audit fees of $99,500 for the fiscal year ended 2010, and $75,879 for the fiscal year ended 2009, for non-audit services rendered to the Registrant.

(1)

With respect to the provision of non-audit services, the pre-approval requirement is waived pursuant to a de minimis exception if (i) such services were not recognized as non-audit services by the Registrant at the time of engagement, (ii) the aggregate amount of all such services provided is no more than 5% of the aggregate audit and non-audit fees paid by the Registrant to PWC during a fiscal year; and (iii) such services are promptly brought to the attention of the Registrant’s Audit Committee and approved by the Registrant’s Audit Committee prior to the completion of the audit.

(2)

Tax fees for the fiscal year end December 31, 2010 includes fees billed for reviewing tax returns. Tax fees for fiscal year end December 31, 2009 includes fees billed for reviewing tax returns and consultation services.

Fees Billed by PWC Related to Invesco and Invesco Affiliates

     PWC billed Invesco Advisers, Inc. (“Invesco”), the Registrant’s adviser, and any entity controlling, controlled by or under common control with Invesco that provides ongoing services to the Registrant (“Invesco Affiliates”) aggregate fees for pre-approved non-audit services rendered to Invesco and Invesco Affiliates for the last two fiscal years as follows:

	Fees Billed for Non-					Fees Billed for Non-
	Audit Services					Audit Services
	Rendered to Invesco		Percentage of Fees			Rendered to Invesco		Percentage of Fees
	and Invesco Affiliates		Billed Applicable to			and Invesco Affiliates		Billed Applicable to
	for fiscal year end		Non-Audit Services			for fiscal year end		Non-Audit Services
	2010 That Were		Provided for fiscal year			2009 That Were		Provided for fiscal year
	Required		end 2010 Pursuant to			Required		end 2009 Pursuant to
	to be Pre-Approved		Waiver of Pre-			to be Pre-Approved		Waiver of Pre-
	by the Registrant’s		Approval			by the Registrant’s		Approval
	Audit Committee		Requirement(1)			Audit Committee		Requirement(1)
Audit-Related Fees	$	0		0	%	$	0		0	%
Tax Fees	$	0		0	%	$	0		0	%
All Other Fees	$	0		0	%	$	0		0	%
Total Fees(2)	$	0		0	%	$	0		0	%

(1)	With respect to the provision of non-audit services, the pre-approval requirement is waived pursuant to a de minimis exception if (i) such services were not recognized as non-audit services by the Registrant at the time of engagement, (ii) the aggregate amount of all such services provided is no more than 5% of the aggregate audit and non-audit fees paid by the Registrant, Invesco and Invesco Affiliates to PWC during a fiscal year; and (iii) such services are promptly brought to the attention of the Registrant’s Audit Committee and approved by the Registrant’s Audit Committee prior to the completion of the audit.
(2)	Including the fees for services not required to be pre-approved by the registrant’s audit committee, PWC billed Invesco and Invesco Affiliates aggregate non-audit fees of $0 for the fiscal year ended 2010, and $0 for the fiscal year ended 2009, for non-audit services rendered to Invesco and Invesco Affiliates.
	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.

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 May 4, 2010

Statement of Principles

Under the Sarbanes-Oxley Act of 2002 and rules adopted by the Securities and Exchange Commission (“SEC”) (“Rules”), the Audit Committees of the Funds’ (the “Audit Committees”) Board of Trustees (the “Board”) are responsible for the appointment, compensation and oversight of the work of independent accountants (an “Auditor”). As part of this responsibility and to assure that the Auditor’s independence is not impaired, the Audit Committees pre-approve the audit and non-audit services provided to the Funds by each Auditor, as well as all non-audit services provided by the Auditor to the Funds’ investment adviser and to affiliates of the adviser that provide ongoing services to the Funds (“Service Affiliates”) if the services directly impact the Funds’ operations or financial reporting. The SEC Rules also specify the types of services that an Auditor may not provide to its audit client. The following policies and procedures comply with the requirements for pre-approval and provide a mechanism by which management of the Funds may request and secure pre-approval of audit and non-audit services in an orderly manner with minimal disruption to normal business operations.

Proposed services either may be pre-approved without consideration of specific case-by-case services by the Audit Committees (“general pre-approval”) or require the specific pre-approval of the Audit Committees (“specific pre-approval”). As set forth in these policies and procedures, unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committees. Additionally, any fees exceeding 110% of estimated pre-approved fee levels provided at the time the service was pre-approved will also require specific approval by the Audit Committees before payment is made. The Audit Committees will also consider the impact of additional fees on the Auditor’s independence when determining whether to approve any additional fees for previously pre-approved services.

The Audit Committees will annually review and generally pre-approve the services that may be provided by each Auditor without obtaining specific pre-approval from the Audit Committee generally on an annual basis. The term of any general pre-approval runs from the date of such pre-approval through September 30^th of the following year, unless the Audit Committees consider a different period and state otherwise. The Audit Committees will add to or subtract from the list of general pre-approved services from time to time, based on subsequent determinations.

The purpose of these policies and procedures is to set forth the guidelines to assist the Audit Committees in fulfilling their responsibilities.

Delegation

The Audit Committees may from time to time delegate pre-approval authority to one or more of its members who are Independent Trustees. All decisions to pre-approve a service by a delegated member shall be reported to the Audit Committees at the next quarterly meeting.

Audit Services

The annual audit services engagement terms will be subject to specific pre-approval of the Audit Committees. Audit services include the annual financial statement audit and other procedures such as tax provision work that is required to be performed by the independent auditor to be able to form an opinion on the Funds’ financial statements. The Audit Committees will obtain, review and consider sufficient information concerning the proposed Auditor to make a reasonable evaluation of the Auditor’s qualifications and independence.

In addition to the annual Audit services engagement, the Audit Committees may grant either general or specific pre-approval of other audit services, which are those services that only the independent auditor reasonably can provide. Other Audit services may include services such as issuing consents for the

inclusion of audited financial statements with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings.

Non-Audit Services

The Audit Committees may provide either general or specific pre-approval of any non-audit services to the Funds and its Service Affiliates if the Audit Committees believe that the provision of the service will not impair the independence of the Auditor, is consistent with the SEC’s Rules on auditor independence, and otherwise conforms to the Audit Committees’ general principles and policies as set forth herein.

Audit-Related Services

“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 the 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; and agreed-upon procedures related to mergers, compliance with ratings agency requirements and interfund lending activities.

Tax Services

“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 Committees will scrutinize carefully the retention of the Auditor in connection with a transaction initially recommended by the Auditor, the major business purpose of which may be tax avoidance or the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committees will consult with the Funds’ Treasurer (or his or her designee) and may consult with outside counsel or advisors as necessary to ensure the consistency of Tax services rendered by the Auditor with the foregoing policy.

No Auditor shall represent any Fund or any Service Affiliate before a tax court, district court or federal court of claims.

Under rules adopted by the Public Company Accounting Oversight Board and approved by the SEC, in connection with seeking Audit Committees’ pre-approval of permissible Tax services, the Auditor shall:

1. Describe in writing to the Audit Committees, which writing may be in the form of the proposed engagement letter:

a.	The scope of the service, the fee structure for the engagement, and any side letter or amendment to the engagement letter, or any other agreement between the Auditor and the Fund, relating to the service; and
b.	Any compensation arrangement or other agreement, such as a referral agreement, a referral fee or fee-sharing arrangement, between the Auditor and any person (other than the Fund) with respect to the promoting, marketing, or recommending of a transaction covered by the service;

2.	Discuss with the Audit Committees the potential effects of the services on the independence of the Auditor; and
3.	Document the substance of its discussion with the Audit Committees.

All Other Auditor Services

The Audit Committees may pre-approve non-audit services classified as “All other services” that are not categorically prohibited by the SEC, as listed in Exhibit 1 to this policy.

Pre-Approval Fee Levels or Established Amounts

Pre-approval of estimated fees or established amounts for services to be provided by the Auditor under general or specific pre-approval policies will be set periodically by the Audit Committees. Any proposed fees exceeding 110% of the maximum estimated pre-approved fees or established amounts for pre-approved audit and non-audit services will be reported to the Audit Committees at the quarterly Audit Committees meeting and will require specific approval by the Audit Committees before payment is made. The Audit Committees will always factor in the overall relationship of fees for audit and non-audit services in determining whether to pre-approve any such services and in determining whether to approve any additional fees exceeding 110% of the maximum pre-approved fees or established amounts for previously pre-approved services.

Procedures

Generally on an annual basis, Invesco Advisers, Inc. (“Invesco”) will submit to the Audit Committees for general pre-approval, a list of non-audit services that the Funds or Service Affiliates of the Funds may request from the Auditor. The list will describe the non-audit services in reasonable detail and will include an estimated range of fees and such other information as the Audit Committee may request.

Each request for services to be provided by the Auditor under the general pre-approval of the Audit Committees will be submitted to the Funds’ Treasurer (or his or her designee) and must include a detailed description of the services to be rendered. The Treasurer or his or her designee will ensure that such services are included within the list of services that have received the general pre-approval of the Audit Committees. The Audit Committees will be informed at the next quarterly scheduled Audit Committees meeting of any such services for which the Auditor rendered an invoice and whether such services and fees had been pre-approved and if so, by what means.

Each request to provide services that require specific approval by the Audit Committees shall be submitted to the Audit Committees jointly by the Fund’s Treasurer or his or her designee and the Auditor, and must include a joint statement that, in their view, such request is consistent with the policies and procedures and the SEC Rules.

Each request to provide tax services under either the general or specific pre-approval of the Audit Committees will describe in writing: (i) the scope of the service, the fee structure for the engagement, and any side letter or amendment to the engagement letter, or any other agreement between the Auditor and the audit client, relating to the service; and (ii) any compensation arrangement or other agreement between the Auditor and any person (other than the audit client) with respect to the promoting, marketing, or recommending of a transaction covered by the service. The Auditor will discuss with the Audit Committees the potential effects of the services on the Auditor’s independence and will document the substance of the discussion.

Non-audit services pursuant to the de minimis exception provided by the SEC Rules will be promptly brought to the attention of the Audit Committees for approval, including documentation that each of the conditions for this exception, as set forth in the SEC Rules, has been satisfied.

On at least an annual basis, the Auditor will prepare a summary of all the services provided to any entity in the investment company complex as defined in section 2-01(f)(14) of Regulation S-X in sufficient detail as to the nature of the engagement and the fees associated with those services.

The Audit Committees have designated the Funds’ Treasurer to monitor the performance of all services provided by the Auditor and to ensure such services are in compliance with these policies and procedures. The Funds’ Treasurer will report to the Audit Committees on a periodic basis as to the results of such monitoring. Both the Funds’ Treasurer and management of Invesco will immediately report to the chairman of the Audit Committees any breach of these policies and procedures that comes to the attention of the Funds’ Treasurer or senior management of Invesco.

Exhibit 1 to Pre-Approval of Audit and Non-Audit Services Policies and Procedures

Conditionally Prohibited Non-Audit Services (not prohibited if the Fund can reasonably conclude that the results of the service would not be subject to audit procedures in connection with the audit of the Fund’s 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

• Internal audit outsourcing services

Categorically Prohibited Non-Audit Services

• Management functions

• Human resources

• Broker-dealer, investment adviser, or investment banking services

• Legal 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

• Any other service that the Public Company Oversight Board determines by regulation is impermissible.

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, 2010, 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, 2010, the Registrant’s disclosure controls and procedures were reasonably designed to ensure: (1) that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission; and (2) that material information relating to the Registrant is made known to the PEO and PFO as appropriate to allow timely decisions regarding required disclosure.

(b)

There have been no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

ITEM 12. EXHIBITS.

12(a) (1)	Code of Ethics.
12(a) (2)	Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
12(a) (3)	Not applicable.
12(b)	Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant: AIM Variable Insurance Funds (Invesco Variable Insurance Funds)

By:	/s/ PHILIP A. TAYLOR
	Philip A. Taylor
	Principal Executive Officer

Date: February 25, 2011

Pursuant to the requirements of the Securities and Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By:	/s/ PHILIP A. TAYLOR
	Philip A. Taylor
	Principal Executive Officer

Date: February 25, 2011

By:	/s/ Sheri Morris
	Sheri Morris
	Principal Financial Officer

Date: February 25, 2011

EXHIBIT INDEX

12(a) (1)	Not applicable.
12(a) (2)	Certifications of principal executive officer and Principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
12(a) (3)	Not applicable.
12(b)	Certifications of principal executive officer and Principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940.