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: 12/31/11

Item 1. Reports to Stockholders.

Invesco V.I. Balanced-Risk Allocation Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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.

VIIBRA-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, 2011, Invesco V.I. Balanced-Risk Allocation Fund significantly outperformed the Custom V.I. Balanced-Risk Allocation Index, the Fund’s custom style-specific benchmark. Strong fixed income markets, as measured by the Barclays Capital U.S. Aggregate Index, contributed most to this outperformance over the reporting period. Global equity and commodity markets, as measured by the MSCI World Index and S&P GSCI Index, respectively, detracted from performance. Most of the Fund’s outperformance occurred in the second and third quarters of 2011, when stocks and commodities generally declined.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	10.92	%
Series II Shares	10.61
MSCI World Index▼(Broad Market Index)	-5.54
Custom V.I. Balanced-Risk Allocation Index§ (Style-Specific Index)	0.83

Source(s): ^▼Lipper Inc.; § Invesco, Lipper Inc.

How we invest

The Fund’s investment process, under normal conditions, is implemented with derivatives and other financially linked instruments whose performance is expected to correspond to U.S. and international fixed income, equity and commodity markets. The Fund’s investments in certain derivatives may create significant leveraged exposure to certain equity, fixed income and commodity markets. Leverage occurs when the investments in derivatives create greater economic exposure than the amount invested. The Fund may invest in derivatives and other financially linked instruments such as futures and swap agreements (including total return swaps). The Fund also may invest in U.S. and foreign government debt securities and other securities such as exchange-traded funds and commodity-linked notes. The Fund will seek to gain exposure to the commodity markets primarily through investments in Invesco Cayman Commodity Fund IV Ltd. (the “Subsidiary”), a wholly-owned subsidiary of the Fund organized under the laws of the Cayman Islands.

     Our philosophy is based on the idea that understanding, managing and allocating risk is fundamental to a properly

Risk Allocation

By asset class

				% of Net
	Risk			Assets as of
Asset Class	Allocation			12/31/11*
Equity		33.77	%		32.91	%
Fixed Income		33.77			112.82
Commodities		32.46			28.28

* Due to the use of leverage, the percentages may not equal 100%.

constructed portfolio. The Fund uses a risk premium capture strategy that seeks to generate returns by investing in equity, bond and commodity markets using a risk-balanced investment process. Our primary goal is to build a portfolio that may perform well in diverse economic environments – recessionary, non-inflationary growth and inflationary growth – while balancing the amount of risk contributed by its exposure to equity, fixed income and commodity markets. We use a disciplined, three-step investment process that seeks to build a portfolio that may perform well in any economic environment while attempting to limit the impact that poor performance from any single asset has on overall Fund performance.

     We begin the process by selecting representative assets for each asset class (equities, fixed income and commodities) from a universe of more than 50 assets. We consider three criteria when selecting assets:

n	Low correlation among the assets – We estimate long-term correlation among assets to build a Fund that is fully diversified.
n	Theoretical basis for excess return – We analyze each asset’s expected excess return over cash (its risk premium).
n	Liquidity, transparency and flexibility – The strategy is implemented using exchange-traded futures and other derivative or financially linked instruments. This ensures ample capacity and allows for daily liquidity while providing pure asset-class exposure.

     Next, we seek to construct the portfolio so that an approximately equal amount of risk comes from the equity, fixed income and commodity allocations. This balanced-risk allocation drives the weight of each asset class. We believe this approach may help mitigate large losses in capital and improve the portfolio’s risk/reward profile, which is commonly referred to as the Sharpe ratio. We re-estimate the risk contributed by each asset and re-optimize the portfolio monthly, or when new assets are added to the portfolio. Typically, the majority of the leverage in the Fund stems from the fixed income exposure, since it is the asset class that requires upsizing due to its generally lower risk profile.

     Finally, on a monthly basis, we actively adjust portfolio positions to reflect the near-term environment while remaining consistent with the optimized portfolio structure. The positions are weighted to reflect the volatility of each asset (e.g., bonds tend to have larger active positions than equities). This step is crucial because various asset classes respond differently to different economic environments. Active positioning better aligns the portfolio with the prevailing economic climate.

Market conditions and your Fund

Entering 2011, the equity gains from late 2010 continued, due in part to accommodative monetary policies by major central banks. Government bond yields, which plunged substantially in March, resumed their upward trend in April. The broad-based upward trend in commodities also remained intact. With the exception of Australia, all of the government fixed income investments in the Fund had a negative contribution during this time. The Fund’s equity exposures were generally positive, with particularly strong results by U.S. large- and small-cap positions. Within the Fund, commodities posted mixed results, with crude oil and precious metals faring well, while copper and agricultural commodities declined. Tactical shifts in the first part of 2011 had minimal effect on Fund performance.

     Volatility returned to global equity and commodities markets during the summer months of 2011. The causes of this volatility included performance of the peripheral European economies and the end of another round of quantitative easing. Bonds benefited during this time as yields declined in response to global economic uncertainty. The Fund’s diversified,

Invesco V.I. Balanced-Risk Allocation Fund

strategic exposure to government bonds was the largest contributor to returns. Tactical overweight exposure in government bond markets and gold, along with underweight exposure to soymeal, also proved beneficial.

     Volatility of risky assets continued into the third quarter of 2011 as global equities and most commodities experienced meaningful weakness during this time. Bonds and gold had strong returns in the third quarter as investors sought shelter from the volatility. The Fund’s strategic allocation to bonds was instrumental in defending the portfolio against the weakness experienced in equities and commodities during this challenging period. In addition, a tactical overweight position in bonds and underweight position in equities drove results.

     During the final months of the reporting period, all three asset classes contributed positively to Fund performance. With the exception of Japan, global equities were up sharply in the fourth quarter. Global government bonds also performed well as yields fell. The higher yielding markets of Australia and Great Britain led results for this group. Commodities, while mixed, were the largest contributor to results at the end of the reporting period. Crude oil enjoyed very strong results, trailed by copper, which also posted a good showing. Gold was off as strong gains from earlier in the year were consolidated, and soymeal was slightly negative. Active positioning was a net detractor at the end of the period as negative results from equities and commodities outweighed the positive contribution from fixed income.

     Please note that our strategy is principally implemented using derivative instruments, including futures and total return swaps. Derivatives can be a more liquid and cost effective way to gain exposure to asset classes. Additionally, the leverage used in our strategy is inherent in these instruments.

     Thank you for your continued commitment to Invesco V.I. Balanced-Risk 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 V.I. Balanced-Risk 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 V.I. Balanced-Risk Allocation Fund. Mr. Devine joined Invesco in 1998. 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. Balanced-Risk Allocation Fund. Mr. Hixon joined Invesco in 1994. 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. Balanced-Risk 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 V.I. Balanced-Risk 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.

Assisted by the Global Asset Allocation Team

Invesco V.I. Balanced-Risk Allocation Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment

Fund data from 1/23/09; index data from 1/31/09

1	Source: Lipper Inc.
2	Sources: Invesco, Lipper Inc.

Past performance cannot guarantee comparable future results.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (1/23/09)		16.30	%
1 Year		10.92
Series II Shares
Inception	(1/23/09)	15.99	%
1 Year		10.61

The returns shown above include the returns of Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund (the first predecessor fund) for the period June 1, 2010, to May 2, 2011, the date the first predecessor fund was reorganized into the Fund, and the returns of Van Kampen Life Investment Trust Global Tactical Asset Allocation Portfolio (the second predecessor fund) for the period prior to June 1, 2010, the date the second predecessor fund was reorganized into the first predecessor fund. The second predecessor fund was advised by Van Kampen Asset Management. Returns shown above for Series I and Series II shares are blended returns of the predecessor funds and Invesco V.I. Balanced-Risk Allocation Fund. Share class returns will differ from the predecessor funds 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 0.74% and 0.99%, 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 1.38% and 1.63%, respectively.² 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. Balanced-Risk 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, 2013. 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 0.04% for Invesco V.I. Balanced-Risk Allocation Fund.

Invesco V.I. Balanced-Risk Allocation Fund

Invesco V.I. Balanced-Risk Allocation Fund’s investment objective is total return with a low to moderate correlation to traditional financial market indexes.

n	Unless otherwise stated, information presented in this report is as of December 31, 2011, 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

Commodity-linked notes risk. The Fund’s investments in commodity-linked notes may involve substantial risks, including risk of loss of a significant portion of their principal value. In addition to risks associated with the underlying commodities, they may be subject to additional special risks, such as the lack of a secondary trading market and temporary price distortions due to speculators and/or the continuous rolling over of futures contracts underlying the notes. Commodity-linked notes 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.

     Commodity risk. The Fund’s and the Subsidiary’s investment exposure to the commodities markets and/or a particular sector of the commodities markets, may subject the Fund and the Subsidiary to greater volatility than investments in traditional securities, such as stocks and bonds. The commodities markets may fluctuate widely based on a variety of factors, including changes in overall market movements, domestic and foreign political and economic events and policies, war, acts of terrorism, changes in domestic or foreign interest rates and/or investor expectations concerning interest rates, domestic and foreign inflation rates and investment and trading activities of mutual funds, hedge funds and commodities funds. Prices of various commodities may also be affected by factors such as drought, floods, weather, livestock disease, embargoes, tariffs and other regulatory developments. The prices of commodities can also fluctuate widely due to supply and demand disruptions in major producing or consuming regions. Because the Fund’s and the Subsidiary’s performance is linked to the performance of potentially volatile commodities, investors should be willing to assume the risks of potentially significant fluctuations in the value of the Fund’s shares.

     Counterparty risk. Individually negotiated or over-the-counter derivatives are also subject to counterparty risk, which is the risk that the other party to the contract (such as a futures contract or swap agreement) will not fulfill its contractual

obligations, which may cause losses or additional costs to the Fund.

     Credit risk. 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.

     Currency/exchange rate risk. The dollar value of the Fund’s foreign investments will be affected by changes in the exchange rates between the dollar and the currencies in which those investments are traded.

     Derivatives risk. 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. A 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.

     Developing markets securities risk. 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.

     Exchange-traded funds risk. An investment by the Fund in ETFs generally presents the same primary risks as an investment in a mutual fund. In addition, an ETF 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 the Fund invests in such leveraged ETFs, the more this leverage will magnify any losses on those investments.

     Exchange-traded notes (ETNs) risk. ETNs are subject to credit risk, including the credit risk of the issuer, and the value of the ETN may drop due to a downgrade in the issuer’s credit rating, despite the underlying market benchmark or strategy remaining unchanged. The value of an ETN may also be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying assets, changes in the applicable interest rates, changes in the issuer’s credit rating, and economic, legal, political, or geographic events that affect the referenced underlying asset.

     Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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. 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 risk. Leverage exists when the Fund purchases or sells an instrument or enters into a transaction without investing cash in an amount equal to the full economic exposure of the instrument or transaction and the Fund could lose more than it invested. Leverage created from borrowing or certain types of transactions or instruments, including derivatives, may impair the Fund’s liquidity, cause it to liquidate positions at an unfavorable time, increase volatility or otherwise not achieve its intended objective.

     Liquidity risk. The Fund 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.

     Management risk. The investment techniques and risk analysis used by the

Invesco V.I. Balanced-Risk Allocation Fund

Fund’s portfolio managers may not produce the desired results.

     Market risk. 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.

     Non-diversification risk. 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.

     Subsidiary risk. By investing in the Subsidiary, the Fund is indirectly exposed to risks associated with the Subsidiary’s investments, including derivatives and commodities. Because the Subsidiary is not registered under the Investment Company Act of 1940, the Fund, as the sole investor in the Subsidiary, will not have the protections offered to investors in U.S. registered investment companies. Changes in the laws of the United States and/or the Cayman Islands, under which the Fund and the Subsidiary, respectively, are organized, could result in the inability of the Fund and/or the Subsidiary to operate as described in this prospectus and could negatively affect the Fund and its shareholders.

     Tax risk. As a regulated investment company, the Fund must derive at least 90% of its gross income for each taxable year from sources treated as qualifying income under the Internal Revenue Code of 1986, as amended. The Fund intends to treat the income it derives from commodity-linked notes and the Subsidiary as qualifying income based on the reasoning contained in private letter rulings provided to other Invesco Funds (which the Fund may not cite as precedent). If, however, the Internal Revenue Service were to change its position with respect to the conclusions reached in these private letter rulings, the income and gains from the Fund’s investment in the commodity-linked notes and/or the Subsidiary might be non-qualifying income, and there is a possibility such change in position might be applied to the Fund retroactively, in which case the Fund might not qualify as a regulated investment company for one or more years. In this event, the Fund’s Board may authorize a significant change in investment strategy or Fund liquidation. For more information, please see the “Dividends, Distributions and Tax Matters” section in the Fund’s SAI.

     U.S. government obligations risk. 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.

About indexes used in this report

The MSCI World Index^SM is an unmanaged index considered representative of stocks of developed countries.

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

     The Custom V.I. Balanced-Risk Allocation Index, created by Invesco to serve as a benchmark for Invesco V.I. Balanced-Risk Allocation Fund, is composed of the following indexes: (60%) MSCI World Index, (40%) Barclays Capital U.S. Aggregate Index.

     The S&P GSCI Index is an unmanaged world production-weighted index composed of the principal physical commodities that are the subject of active, liquid futures markets.

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

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

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. Balanced-Risk Allocation Fund

Consolidated Schedule of Investments

December 31, 2011

	Principal
	Amount		Value
U.S. Treasury Bills–5.34%
0.12%, 01/26/12(a)	$	11,000,000	$	10,999,965
0.00%, 02/09/12(a)		3,000,000		2,999,969
Total U.S. Treasury Securities (Cost $13,999,071)				13,999,934
	Shares
Exchange Traded Fund–4.21%
Investment Companies–Exchange Traded Funds–4.21%
PowerShares DB Gold Fund (Cost $11,487,233)(b)		203,100		11,058,795
	Shares		Value
Money Market Funds–79.86%(c)
Invesco V.I. Money Market Fund		177,645,824	$	177,645,824
Liquid Assets Portfolio–Institutional Class		5,940,412		5,940,412
Premier Portfolio–Institutional Class		5,940,412		5,940,412
STIC (Global Series) PLC–U.S. Dollar Liquidity Portfolio–Institutional Class		20,009,982		20,009,982
Total Money Market Funds (Cost $209,536,630)				209,536,630
TOTAL INVESTMENTS–89.41% (Cost $235,022,934)				234,595,359
OTHER ASSETS LESS LIABILITIES–10.59%				27,774,109
NET ASSETS–100.00%			$	262,369,468

Notes to Schedule of Investments:

(a)	Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund.
(b)	Not an affiliate of the Fund or its investment adviser.
(c)	The money market fund and the Fund are affiliated by having the same investment adviser.

Open Futures Contracts and Swap Agreements at Period-End(a)
								Unrealized
		Number of		Expiration		Notional		Appreciation
Long Futures Contracts		Contracts		Month		Value		(Depreciation)
100 Ounce Gold			131		February-2012	$	20,525,080	$	(1,836,273	)
Australian 10 Year Bonds			398		March-2012		48,399,091		502,477
Canada 10 Year Bonds			321		March-2012		42,169,847		438,601
Dow Jones Eurostoxx 50			493		March-2012		14,727,115		452,725
E-Mini S&P 500 Index			296		March-2012		18,538,480		94,391
Euro Bond Future			179		March-2012		32,212,745		1,063,264
FTSE 100 Index			183		March-2012		15,737,309		364,225
Hang Seng Index			80		January-2012		9,505,318		78,410
Japan 10 Year Bonds			23		March-2012		42,571,224		225,518
LME Copper			91		March-2012		17,292,275		613,050
Long Gilt			231		March-2012		41,965,800		751,822
Russell 2000 Index Mini			188		March-2012		13,889,440		(22,727	)
Topix Tokyo Price Index			152		March-2012		14,382,116		(260,878	)
U.S. Treasury 20 Year Bonds			246		March-2012		35,623,875		436,298
WTI Crude			201		June-2012		19,995,480		45,441
Total Futures Contracts						$	387,535,195	$	2,946,344
Long Swap Agreements	Counterparty
Canada 10 Year Bonds	Goldman Sachs		216		March-2012	$	27,717,788	$	292,589
Japan 10 Year Bonds	Merrill Lynch		6		March-2012		10,935,541		46,057
Long Gilt Swap	Goldman Sachs		86		March-2012		15,466,398		255,254
Soybean Meal(b)	Barclays Capital		19,600		May-2012		9,236,825		864,640
Total Swap Agreements						$	63,356,552	$	1,458,540
Total								$	4,404,884

(a)	Futures collateralized by $25,045,000 cash held with Goldman Sachs, the futures commission merchant.
(b)	Receive a return equal to Barclays Capital Soybean Meal S2 Nearby Excess Return Index and pay the product of (i) 0.30% of the Notional Amount multiplied by (ii) days in the period divided by 365.

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

Invesco V.I. Balanced-Risk Allocation Fund

Consolidated Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $25,486,304)	$	25,058,729
Investments in affiliated money market funds, at value and cost		209,536,630
Total investments, at value (Cost $235,022,934)		234,595,359
Foreign currencies, at value (Cost $110,021)		111,907
Receivable for:
Deposits with brokers for open futures contracts		25,045,000
Variation margin		1,531,584
Fund shares sold		74,328
Dividends		10,868
Unrealized appreciation on swap agreements		1,458,540
Premiums paid on swap agreements		87
Investment for trustee deferred compensation and retirement plans		11,695
Total assets		262,839,368
Liabilities:
Payable for:
Fund shares reacquired		43,906
Dividends		2,851
Accrued fees to affiliates		369,559
Accrued other operating expenses		37,173
Trustee deferred compensation and retirement plans		16,411
Total liabilities		469,900
Net assets applicable to shares outstanding	$	262,369,468
Net assets consist of:
Shares of beneficial interest	$	245,936,818
Undistributed net investment income		8,294,288
Undistributed net realized gain		4,159,380
Unrealized appreciation		3,978,982
	$	262,369,468
Net Assets:
Series I	$	4,471,664
Series II	$	257,897,804
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		387,876
Series II		22,453,752
Series I:
Net asset value per share	$	11.53
Series II:
Net asset value per share	$	11.49

Consolidated Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $39,767)	$	453,985
Dividends from affiliated money market funds		57,976
Interest		21,399
Total investment income		533,360
Expenses:
Advisory fees		1,261,677
Administrative services fees		394,133
Custodian fees		2,002
Distribution fees — Series II		339,937
Trustees’ and officers’ fees and benefits		20,707
Other		(2,173	)
Total expenses		2,016,283
Less: Fees waived		(703,730	)
Net expenses		1,312,553
Net investment income (loss)		(779,193	)
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		9,113,262
Foreign currencies		(246,343	)
Futures contracts		5,616,363
Swap agreements		2,521,712
		17,004,994
Change in net unrealized appreciation (depreciation) of:
Investment securities		(7,266,015	)
Foreign currency contracts		31,734
Futures contracts		2,812,103
Swap agreements		1,311,978
		(3,110,200	)
Net realized and unrealized gain		13,894,794
Net increase in net assets resulting from operations	$	13,115,601

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

Invesco V.I. Balanced-Risk Allocation Fund

Consolidated Statement of Changes in Net Assets

For the years ended December 31, 2011 and 2010

	2011			2010
Operations:
Net investment income (loss)	$	(779,193	)	$	468,578
Net realized gain		17,004,994			5,198,426
Change in net unrealized appreciation (depreciation)		(3,110,200	)		127,094
Net increase in net assets resulting from operations		13,115,601			5,794,098
Distributions to shareholders from net investment income:
Series I		(136	)		(196	)
Series II		(301,687	)		(185,515	)
Total distributions from net investment income		(301,823	)		(185,711	)
Distributions to shareholders from net realized gains:
Series I		(3,582	)		(1,436	)
Series II		(14,743,368	)		(1,359,183	)
Total distributions from net realized gains		(14,746,950	)		(1,360,619	)
Share transactions–net:
Series I		4,242,158			(107,942	)
Series II		185,367,819			(39,141,623	)
Net increase (decrease) in net assets resulting from share transactions		189,609,977			(39,249,565	)
Net increase (decrease) in net assets		187,676,805			(35,001,797	)
Net assets:
Beginning of year		74,692,663			109,694,460
End of year (includes undistributed net investment income (loss) of $8,294,288 and $(66,801), respectively)	$	262,369,468		$	74,692,663

Notes to Consolidated Financial Statements

December 31, 2011

NOTE 1—Significant Accounting Policies

Invesco V.I. Balanced-Risk 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 twenty-eight separate portfolios, (each constituting a “Fund”). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these consolidated financial statements pertains only to the Fund. Matters affecting each 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 will seek to gain exposure to the commodity markets primarily through investments in the Invesco Cayman Commodity Fund IV Ltd. (the “Subsidiary”), a wholly-owned subsidiary of the Fund organized under the laws of the Cayman Islands. The Subsidiary was organized by the Fund to invest in commodity-linked derivatives. The Fund may invest up to 25% of its total assets in the Subsidiary.

  Prior to May 2, 2011, the Fund operated as Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund (the“Acquired Fund”), an investment portfolio of the Trust. The Acquired Fund was reorganized May 2, 2011 (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 Series I and Series II shares received Series I and Series II shares, respectively of the Fund. Information for the Acquired Fund’s Series I and Series 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 provide total return with a low to moderate correlation to traditional financial market indices.

  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”).

Invesco V.I. Balanced-Risk Allocation Fund

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

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Debt obligations (including convertible 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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 consolidated financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Consolidated Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Consolidated Statement of Operations and the Consolidated Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Consolidated Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Consolidated Statement of Operations and Consolidated Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Consolidated Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.

Invesco V.I. Balanced-Risk Allocation Fund

C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Consolidated Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from 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 consolidated financial statements.
	The Subsidiary is classified as a controlled foreign corporation under Subchapter N of the Internal Revenue Code. Therefore, the Fund is required to increase its taxable income by its share of the Subsidiary’s income. Net investment losses of the Subsidiary cannot be deducted by the Fund in the current period nor carried forward to offset taxable income in future periods.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund 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 financial statements are prepared on a consolidated basis in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. The accompanying financial statements reflect the financial position of the Fund and its Subsidiary and the results of operations on a consolidated basis. All inter-company accounts and transactions have been eliminated in consolidation.
	In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the consolidated financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust, and under the Subsidiary’s organizational documents, the directors and officers of the Subsidiary, are indemnified against certain liabilities that may arise out of performance of their duties to the Fund and/or the Subsidiary, respectively. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Futures Contracts — The Fund or the Subsidiary 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 Consolidated Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Consolidated Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Consolidated Statement of Assets and Liabilities.
J.	Swap Agreements — The Fund or the Subsidiary 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 V.I. Balanced-Risk Allocation 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. If a counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties, the Fund may experience significant delays in obtaining any recovery in a bankruptcy or other reorganization proceeding. The Fund may obtain only limited recovery or may obtain no recovery in such circumstances.
	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 Consolidated Statement of Operations by “marking to market” on a daily basis to reflect the value of the swap agreement at the end of each trading day. Payments received or paid at the beginning of the agreement are reflected as such on the Consolidated Statement of Assets and Liabilities and may be referred to as upfront payments. The Fund accrues for the fixed payment stream and amortizes upfront payments, if any, on swap agreements on a daily basis with the net amount, recorded as a component of realized gain (loss) on the Consolidated Statement of Operations. A liquidation payment received or made at the termination of a swap agreement is recorded as realized gain (loss) on the Consolidated Statement of Operations. The Fund segregates liquid securities having a value at least equal to the amount of the potential obligation of a Fund under any swap transaction. 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 Consolidated Statement of Assets and Liabilities. Such risks involve the possibility that a swap is difficult to sell or liquidate; the counterparty does not honor its obligations under the agreement and unfavorable interest rates and market fluctuations.
K.	Other Risks — The Fund will seek to gain exposure to commodity markets primarily through an investment in the Subsidiary and through investments in exchange traded funds. The Subsidiary, unlike the Fund, may invest without limitation in commodities, commodity-linked derivatives and other securities, such as exchange traded notes, that may provide leverage and non-leveraged exposure to commodity markets. The Fund is indirectly exposed to the risks associated with the Subsidiary’s investments.
	The Fund is non-diversified and may invest in securities of fewer issuers than if it were diversified. Thus, the value of the Fund’s shares may vary more widely and the Fund may be subject to greater market and credit risk than if the Fund invested more broadly.
L.	Collateral — To the extent the Fund or the Subsidiary 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

Effective May 2, 2011, 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	.950%
Next $250 million		0	.925%
Next $500 million		0	.90%
Next $1.5 billion		0	.875%
Next $2.5 billion		0	.85%
Next $2.5 billion		0	.825%
Next $2.5 billion		0	.80%
Over $10 billion		0	.775%

  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. Balanced-Risk Allocation Fund

Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Subsidiary has entered into a separate contract with the Adviser whereby the Adviser provides investment advisory and other services to the Subsidiary. In consideration of these services, the Subsidiary pays an advisory fee to the Adviser based on the annual rate of the Subsidiary’s average daily net assets as set forth in the table above.

  Effective May 2, 2011, the Adviser has contractually agreed, through at least June 30, 2013, 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 0.95% of average daily net assets. Prior to May 2, 2011, the Adviser had contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses to 0.90% and 1.15% for Series I and Series II shares, respectively. Effective January 1, 2012, 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 to 0.62% and 0.87% for Series I and Series II shares, respectively. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; (5) expenses of the underlying funds that are paid indirectly as a result of share ownership of the underlying funds; and (6) 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, 2013.

  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.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $703,730.

  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, 2011, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $344,133 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, 2011, expenses incurred under the agreement are shown in the Consolidated 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, 2011, expenses incurred under the Plan are detailed in the Consolidated Statement of Operations as distribution fees.

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

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available 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, 2011. 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 consolidated financial statements may materially differ from the value received upon actual sale of those investments.

Invesco V.I. Balanced-Risk Allocation Fund

  During the year ended December 31, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Exchange-Traded Funds	$	11,058,795	$	—	$	—	$	11,058,795
U.S. Treasury Securities		—		13,999,934		—		13,999,934
Money Market Funds		209,536,630		—		—		209,536,630
	$	220,595,425	$	13,999,934	$	—	$	234,595,359
Futures*		2,946,344		—		—		2,946,344
Swap Agreements*		—		1,458,540		—		1,458,540
Total Investments	$	223,541,769	$	15,458,474	$	—	$	239,000,243

*  Unrealized appreciation.

NOTE 4—Derivative Investments

The following 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 consolidated 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, 2011:

	Value
Risk Exposure/Derivative Type	Assets		Liabilities
Commodity risk
Futures contracts(a)	$	658,491	$	(1,836,273	)
Swap agreements(b)		864,640		—
Interest rate risk
Futures contracts(a)		3,417,980		—
Swap agreements(b)		593,900		—
Market risk
Futures contracts(a)		989,751		(283,605	)
	$	6,524,762	$	(2,119,878	)

(a)	Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable is reported within the Consolidated Statement of Assets & Liabilities.
(b)	Values are disclosed on the Consolidated Statement of Assets and Liabilities under the Unrealized appreciation on swap agreements.

Effect of Derivative Instruments for the year ended December 31, 2011

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)
Commodity risk	$	(1,447,729	)	$	(3,194,608	)
Interest rate risk		10,921,466			5,716,320
Market risk		(3,857,374	)		—
Change in Unrealized Appreciation (Depreciation)
Commodity risk	$	(1,177,782	)	$	864,640
Interest rate risk		3,433,286			593,900
Market risk		556,599			(146,562	)
Total	$	8,428,466		$	3,833,690

*  The average notional value of futures and swap agreements outstanding during the period was $204,609,974 and $48,482,719, respectively.

Invesco V.I. Balanced-Risk Allocation 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, 2011, the Fund paid legal fees of $1,225 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010:

	2011		2010
Ordinary income	$	10,127,848	$	1,156,905
Long-term capital gain		4,920,925		389,425
Total distributions	$	15,048,773	$	1,546,330

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	9,353,715
Undistributed long-term gain		4,013,671
Net unrealized appreciation (depreciation) — investments		(627,440	)
Net unrealized appreciation — other investments		3,708,741
Temporary book/tax differences		(16,037	)
Shares of beneficial interest		245,936,818
Total net assets	$	262,369,468

  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 Trust to utilize. The Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund does not have a capital loss carryforward at period-end.

Invesco V.I. Balanced-Risk Allocation 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, 2011 was $27,425,156 and $69,294,484, 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	$	5,913,101
Aggregate unrealized (depreciation) of investment securities		(6,540,541	)
Net unrealized appreciation (depreciation) of investment securities	$	(627,440	)
Cost of investments for tax purposes is $235,222,799.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign futures, swap income and net operating losses, on December 31, 2011, undistributed net investment income was increased by $9,442,105, undistributed net realized gain was decreased by $3,456,088 and shares of beneficial interest decreased by $5,986,017.

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		258,487		$	2,871,722			—		$	58
Series II		12,355,475			139,883,748			2,727,339			33,427,450
Issued as reinvestment of dividends:
Series I		—			—			—			—
Series II		1,398,239			15,045,054			101,831			1,546,330
Issued in connection with acquisitions:(b)
Series I		174,025			1,876,288			—			—
Series II		6,178,799			66,483,294			—			—
Reacquired:
Series I		(45,961	)		(505,852	)		(8,675	)		(108,000	)
Series II		(3,202,503	)		(36,044,277	)		(6,161,080	)		(74,115,403	)
Net increase (decrease) in share activity		17,116,561		$	189,609,977			(3,340,585	)	$	(39,249,565	)

(a)	There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 91% 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)	As of the opening of business on May 2, 2011, the Fund acquired all the net assets of Invesco V.I. Global Multi-Asset Fund (the “Target Fund”) pursuant to a plan of reorganization approved by the Trustees of the Fund on November 10, 2010 and by the shareholders the Target Fund on April 1, 2011. The acquisition was accomplished by a taxable exchange of 6,352,824 shares of the Fund for 5,245,904 shares outstanding of the Target Fund as of the close of business on April 29, 2011. Each class of the Target Fund was exchanged for the like class of shares of the Fund based on the relative net asset value of the Target Fund to the net asset value of the Fund on the close of business, April 29, 2011. The Target Fund’s net assets at that date of $68,359,582 was combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $73,364,971 and $141,724,553 immediately after the acquisition.
	The pro forma results of operations for the year ended December 31, 2011 assuming the reorganization had been completed on January 1, 2011, the beginning of the annual reporting period, are as follows:

Net investment income	$	(432,423	)
Net realized/unrealized gains		14,147,497
Change in net assets resulting from operations	$	13,715,074

The combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Target Fund that have been included in the Fund’s Statement of Operations since May 2, 2011.

Invesco V.I. Balanced-Risk Allocation Fund

NOTE 11—Consolidated Financial Highlights

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

																										Ratio of			Ratio of
																										expenses			expenses
						Net gains																				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 12/31/11	$	13.09	$	(0.04	)	$	1.28	$	1.24	$	(0.10	)	$	(2.70	)	$	(2.80	)	$	11.53		11.00	%	$	4,472		0.71	%(d)(e)		1.22	%(e)		(0.32	)%(e)		142	%
Year ended 12/31/10(f)		12.00		0.10			1.15		1.25		(0.02	)		(0.14	)		(0.16	)		13.09		10.57			17		0.89			1.29			0.88	(g)		444
Eleven months ended 12/31/09(h)		10.00		0.04			2.67		2.71		(0.25	)		(0.46	)		(0.71	)		12.00		28.21			120		0.90	(i)(j)		1.46	(i)(j)		0.41	(g)(i)(j)		87
Series II*
Year ended 12/31/11		13.05		(0.07	)		1.27		1.20		(0.06	)		(2.70	)		(2.76	)		11.49		10.61			257,898		0.96	(d)(e)		1.47	(e)		(0.57	)(e)		142
Year ended 12/31/10(f)		12.10		0.07			1.04		1.11		(0.02	)		(0.14	)		(0.16	)		13.05		9.32			75		1.14			1.54			0.59	(g)		444
Eleven months ended 12/31/09(h)		10.00		0.05			2.74		2.79		(0.23	)		(0.46	)		(0.69	)		12.10		27.86	(k)		110		1.15	(i)(j)		1.71	(i)(j)		0.44	(g)(i)(j)		87

*	Prior to May 2, 2011, the Fund operated as Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund (the “Predecessor Fund”). On such date, holders of the Acquired Fund’s Series I and Series II shares received Series I and Series II shares, respectively of the Fund.
(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)	In addition to the fees and expenses which the Fund bears directly; the Fund indirectly bears a pro rata share of the fees and expenses of the underlying funds in which the Fund invests. Because the underlying funds have varied expenses and fee levels and the Fund may own different proportions at different times, the amount of fees and expenses incurred indirectly by the Fund will vary. Estimated underlying fund expenses are not expenses that are incurred directly by your Fund. They are expenses that are incurred directly by the underlying funds and are deducted from the value of the funds your Fund invests in. The effect of the estimated underlying fund expenses that you bear indirectly is included in your Fund’s total return. Estimated acquired fund fees from underlying funds was 0.04%.
(e)	Ratios are annualized and based on average daily net assets (000’s omitted) of $1,952 and $135,975 for Series I and Series II shares, respectively.
(f)	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.
(g)	Ratio of net investment income to average net assets without fee waivers and/or expenses absorbed for the year ended December 31, 2010 and the period ending December 31, 2009 was 0.48% and (0.15)% for Series I shares and 0.19% and (0.12)% for Series II shares, respectively.
(h)	Commencement date of January 23, 2009.
(i)	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.
(j)	Annualized.
(k)	These returns include combined 12b-1 fees and service fees of up to 0.25%.

Invesco V.I. Balanced-Risk 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 V.I. Balanced-Risk Allocation Fund:

In our opinion, the accompanying consolidated statement of assets and liabilities, including the consolidated schedule of investments, and the related consolidated statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the consolidated financial position of Invesco V.I. Balanced-Risk Allocation Fund (formerly known as Invesco Van Kampen V.I. Global Tactical Asset Allocation Fund; one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These consolidated 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. 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 17, 2012

Houston, Texas

Invesco V.I. Balanced-Risk 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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2,3		(12/31/11)		Period2,4		Ratio
Series I	$	1,000.00	$	1,080.60	$	3.72	$	1,021.63	$	3.62		0.71	%
Series II		1,000.00		1,079.90		5.03		1,020.37		4.89		0.96

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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. Effective on January 1, 2012, 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 to 0.62% and 0.87% for Series I and Series II shares, respectively. The waiver agreement is in effect through at least June 30, 2013. The annualized expense ratios restated as if this agreement had been in effect throughout the entire most recent fiscal half year are 0.57% and 0.82% for Series I and Series II shares, respectively.
3	The actual expenses paid restated as if the changes discussed above had been in effect throughout the entire most recent fiscal half year are $2.99 and $4.30 for Series I and Series II shares, respectively.
4	The hypothetical expenses paid restated as if changes discussed above had been in effect throughout the entire most recent fiscal half year are $2.91 and $4.18 for Series I and Series II shares, respectively.

Invesco V.I. Balanced-Risk 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, 2011:

Federal and State Income Tax
Long-Term Capital Gain Dividends	$	4,920,925
Corporate Dividends Received Deduction*		4.95%
U.S. Treasury Obligations*		0.05%

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

Invesco V.I. Balanced-Risk 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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. Balanced-Risk Allocation Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. Balanced-Risk Allocation Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. Balanced-Risk Allocation Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. Balanced-Risk Allocation Fund

Invesco V.I. Basic Value Fund

Annual Report to Shareholders   §   December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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

For the year ended December 31, 2011, Invesco V.I. Basic Value Fund, excluding variable product issuer charges, posted a small loss and underperformed its style-specific benchmark, the Russell 1000 Value Index. The Fund’s underperformance was largely due to a lack of exposure to the utilities sector and an overweight position in the financials sector. Alternatively, an overweight position in the consumer discretionary sector and good stock selection in the energy sector contributed to the Fund’s performance versus its style-specific benchmark. The Fund’s health care holdings were the largest contributors to absolute performance during the year, while its financials holdings were the largest detractors.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	-3.05	%
Series II Shares	-3.39
S&P 500 Index▼ (Broad Market Index)	2.09
Russell 1000 Value Index▼ (Style-Specific Index)	0.39
Lipper VUF Large-Cap Value Funds Index▼ (Peer Group Index)	-1.70

Source(s): ^▼Lipper Inc.

How we invest

We seek to exploit market inefficiencies by investing in companies that appear undervalued relative to the market in general. 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. Although we are benchmark agnostic, we feel that stock picking, as compared to making sector bets, may provide a more consistent path to success. In addition, investors can take advantage of pricing anomalies by purchasing undervalued stocks before a recognizable catalyst arises. We believe that there are four keys to investing: valuation, fundamentals, accounting and psychology.

     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 on the growth or cyclical nature of their business. The result of this filtering process is a pool of liquid securities that we believe is 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 only initiate a purchase of a security if we believe the potential for stock price appreciation outweighs the potential downside risk. To be eligible for inclusion in the Fund, a stock must meet the following criteria:

n	If we determine 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 our rigorous fundamental analysis determines 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 also pay attention to investor psychology, as we believe it is one reason why securities become undervalued and overvalued.

     We look to manage risk through portfolio construction – chiefly through 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. Portfolio managers 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 our 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	If 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 volatile during 2011, and the broad market, as measured by the S&P 500 Index, posted only a small gain. In the first quarter, most major indexes performed very well,

Portfolio Composition

By sector

Financials	32.8	%
Consumer Discretionary	21.1
Energy	14.1
Consumer Staples	9.6
Information Technology	7.6
Health Care	6.7
Industrials	3.5
Telecommunication Services	2.2
Materials	1.2
Money Market Funds Plus Other Assets Less Liabilities	1.2

Top 10 Equity Holdings*

1.	Chubb Corp. (The)	6.3	%
2.	Omnicom Group Inc.	5.7
3.	Royal Dutch Shell PLC-ADR	4.8
4.	Chevron Corp.	4.3
5.	Time Warner Cable Inc.	4.1
6.	JPMorgan Chase & Co.	3.8
7.	Macy’s, Inc.	3.7
8.	Molson Coors Brewing Co.-Class B	3.7
9.	Procter & Gamble Co. (The)	3.0
10.	Wells Fargo & Co.	3.0

Top Five Industries

1.	Property & Casualty Insurance	15.0	%
2.	Integrated Oil & Gas	13.1
3.	Other Diversified Financial Services	6.5
4.	Cable & Satellite	6.3
5.	Diversified Banks	5.9

Total Net Assets	$239.2 million
Total Number of Holdings*		41

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

fueled by the second round of “quantitative easing” from the U.S. Federal Reserve. However, with the spring came increased volatility and significant macroeconomic distortions due to civil unrest in Egypt and Libya, flooding in Australia and a devastating earthquake and tsunami in Japan. Corporate earnings remained strong with largely positive surprises, but were often overshadowed by investor concerns about continued high unemployment and soft housing data.

     Although markets stabilized and were generally in positive territory through the summer, major equity indexes sold off precipitously in August as the U.S. government struggled to raise the nation’s debt ceiling. Despite an eventual agreement between the White House and Congress, credit rating agency Standard & Poor’s announced the first-ever downgrade of long-term U.S. government debt. Uncertainty created by the downgrade, combined with worries over the sovereign debt crisis in the eurozone, caused fears of a global recession. Despite signs of sustained but muted growth, these macroeconomic factors continued to weigh on markets through the end of the reporting period. Sector performance within the S&P 500 Index was mixed during the year, with the utilities sector leading and the financials sector lagging.

     In this environment, the Fund underperformed the Russell 1000 Value Index. The Fund’s lack of exposure to utilities detracted the most from its relative performance given that this was the best performing sector within the index during the year. We did not find attractive investment opportunities in utilities stocks based on those stocks’ elevated valuations. Indeed, only once in the last 40 years have electric utilities been as expensive as they were, as of the close of the reporting period, relative to the S&P 500 Index.¹

     The Fund’s overweight exposure to the financials sector, the worst performing market sector for the year, also detracted from Fund performance versus the Russell 1000 Value Index. More specifically, fears of an economic slowdown and European sovereign debt uncertainties weighed heavily on Fund holdings Bank of America, JP Morgan Chase and Morgan Stanley.

     Unlike many other financials, several of the Fund’s property and casualty insurance holdings posted gains. Indeed, Chubb was one of the largest contributors to the Fund’s performance. Chubb’s attractive franchises, good capital management and favorable valuation – combined with possible early signs of

insurance pricing improvement off of trough levels – led to positive performance.

     An overweight position in consumer discretionary stocks and good stock selection in the energy sector contributed to the Fund’s performance versus its style-specific benchmark. Consumer discretionary holding Macy’s helped drive performance as the company improved its operations through localization and enhanced employee training, combined with a high level of free cash flow and an inexpensive valuation. Chevron performed well as the energy company generated some of the industry’s highest returns on capital, combined with an attractive valuation and favorable oil prices.

     Pfizer benefited from good results from a new anti-stroke medicine, Eliquis, and from its announcement that it is considering selling some of its more valuable businesses, such as animal health and consumer. UnitedHealth Group benefited from lower medical utilization as consumers with increasingly higher deductibles become more thoughtful about their health care spending.

     We believe that market volatility over the reporting period created opportunities to invest in companies with attractive valuations. Our contrarian philosophy and deep value approach of buying companies that we consider extremely undervalued capitalizes on market volatility and periods of down markets as value is created for new investment opportunities.

     Markets experienced increased volatility during the reporting period. We would like to caution investors against making investment decisions based on short-term performance.

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

1 Source: Empirical Research Partners

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.

Yogi Kak
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Basic Value Fund. He joined Invesco in 2011. Mr. Kak earned a bachelor of technology degree in electrical engineering from the Institute of Technology, Banares Hindu University. He also earned an M.B.A. from Tulane University.

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 manager, 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

Fund and index data from 12/31/01*

1

Source: Lipper Inc.

*

During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (9/10/01)			0.67	%
	10	Years	0.43
	5	Years	-5.48
	1	Year	-3.05
Series II Shares
Inception (9/10/01)			0.41	%
	10	Years	0.17
	5	Years	-5.74
	1	Year	-3.39

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, 2011, 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

Developing markets securities risk. 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.

     Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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.

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

     Market risk. 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 investing style risk. 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.

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 market 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

December 31, 2011

	Shares			Value
Common Stocks & Other Equity Interests–98.82%(a)
Advertising–5.67%
Omnicom Group Inc.		304,212		$	13,561,771
Aerospace & Defense–1.78%
Honeywell International Inc.		78,459			4,264,247
Asset Management & Custody Banks–1.62%
Bank of New York Mellon Corp. (The)		194,348			3,869,469
Automobile Manufacturers–1.63%
Renault S.A. (France)		113,229			3,902,952
Brewers–3.71%
Molson Coors Brewing Co.–Class B		203,856			8,875,890
Cable & Satellite–6.25%
Comcast Corp.–Class A		213,948			5,072,707
Time Warner Cable Inc.		155,321			9,873,756
					14,946,463
Computer Hardware–5.92%
Apple Inc.(b)		13,615			5,514,075
Dell Inc.(b)		204,112			2,986,159
Hewlett-Packard Co.		219,277			5,648,575
					14,148,809
Data Processing & Outsourced Services–1.68%
Western Union Co.		219,508			4,008,216
Department Stores–3.74%
Macy’s, Inc.		278,340			8,956,981
Diversified Banks–5.92%
Comerica Inc.		95,460			2,462,868
U.S. Bancorp		171,122			4,628,850
Wells Fargo & Co.(b)		256,461			7,068,065
					14,159,783
General Merchandise Stores–2.08%
Target Corp.		97,337			4,985,601
Homebuilding–1.76%
Ryland Group, Inc. (The)		267,108			4,209,622
Household Products–3.03%
Procter & Gamble Co. (The)		108,642			7,247,508
Hypermarkets & Super Centers–2.81%
Wal-Mart Stores, Inc.		112,449			6,719,952
Industrial Conglomerates–1.71%
General Electric Co.		228,400			4,090,644
Integrated Oil & Gas–13.10%
Chevron Corp.		97,255			10,347,931
Exxon Mobil Corp.		62,980			5,338,185
Petroleo Brasileiro S.A.–ADR (Brazil)		169,757			4,218,462
Royal Dutch Shell PLC–ADR (United Kingdom)		156,470			11,436,392
					31,340,970
Investment Banking & Brokerage–2.24%
Goldman Sachs Group, Inc. (The)		25,519			2,307,683
Morgan Stanley		201,990			3,056,109
					5,363,792
Life & Health Insurance–1.47%
MetLife, Inc.		112,685			3,513,518
Managed Health Care–2.16%
UnitedHealth Group Inc.		101,986			5,168,651
Oil & Gas Drilling–1.02%
Noble Corp.(b)		80,647			2,437,152
Other Diversified Financial Services–6.53%
Bank of America Corp.		438,012			2,435,347
Citigroup Inc.		153,209			4,030,929
JPMorgan Chase & Co.		275,108			9,147,341
					15,613,617
Pharmaceuticals–4.54%
Bristol-Myers Squibb Co.		108,909			3,837,953
Pfizer Inc.		323,941	��		7,010,083
					10,848,036
Property & Casualty Insurance–15.01%
Allied World Assurance Co. Holdings AG (Switzerland)(b)		72,171			4,541,721
Allstate Corp. (The)		193,315			5,298,764
Aspen Insurance Holdings Ltd.		248,571			6,587,132
Chubb Corp. (The)		216,718			15,001,220
Travelers Cos., Inc. (The)		75,388			4,460,708
					35,889,545
Steel–1.22%
POSCO–ADR (South Korea)		35,542			2,917,998
Wireless Telecommunication Services–2.22%
Vodafone Group PLC–ADR (United Kingdom)		189,629			5,315,301
Total Common Stocks & Other Equity Interests (Cost $210,982,736)					236,356,488

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

Invesco V.I. Basic Value Fund

	Shares		Value
Money Market Funds–1.20%
Liquid Assets Portfolio–Institutional Class(c)		1,431,733	$	1,431,733
Premier Portfolio–Institutional Class(c)		1,431,733		1,431,733
Total Money Market Funds (Cost $2,863,466)				2,863,466
TOTAL INVESTMENTS–100.02% (Cost $213,846,202)				239,219,954
OTHER ASSETS LESS LIABILITIES–(0.02)%				(37,855	)
NET ASSETS–100.00%			$	239,182,099

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. Basic Value Fund

Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $210,982,736)	$	236,356,488
Investments in affiliated money market funds, at value and cost		2,863,466
Total investments, at value (Cost $213,846,202)		239,219,954
Receivable for:
Fund shares sold		65,383
Dividends		648,247
Investment for trustee deferred compensation and retirement plans		28,008
Total assets		239,961,592
Liabilities:
Payable for:
Fund shares reacquired		444,643
Accrued fees to affiliates		210,809
Accrued other operating expenses		32,304
Trustee deferred compensation and retirement plans		91,737
Total liabilities		779,493
Net assets applicable to shares outstanding	$	239,182,099
Net assets consist of:
Shares of beneficial interest	$	281,117,108
Undistributed net investment income		3,119,843
Undistributed net realized gain (loss)		(70,428,604	)
Unrealized appreciation		25,373,752
	$	239,182,099
Net Assets:
Series I	$	135,644,325
Series II	$	103,537,774
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		22,177,087
Series II		17,016,633
Series I:
Net asset value per share	$	6.12
Series II:
Net asset value per share	$	6.08

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $134,866)	$	6,241,973
Dividends from affiliated money market funds		7,686
Total investment income		6,249,659
Expenses:
Advisory fees		1,902,600
Administrative services fees		727,733
Custodian fees		6,741
Distribution fees — Series II		290,544
Transfer agent fees		30,300
Trustees’ and officers’ fees and benefits		28,836
Other		47,953
Total expenses		3,034,707
Less: Fees waived		(10,843	)
Net expenses		3,023,864
Net investment income		3,225,795
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains from securities sold to affiliates of $520,464)		13,181,581
Foreign currencies		(1,509	)
		13,180,072
Change in net unrealized appreciation (depreciation) of investment securities		(23,850,063	)
Net realized and unrealized gain (loss)		(10,669,991	)
Net increase (decrease) in net assets resulting from operations	$	(7,444,196	)

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, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	3,225,795		$	1,797,336
Net realized gain		13,180,072			1,972,585
Change in net unrealized appreciation (depreciation)		(23,850,063	)		17,975,887
Net increase (decrease) in net assets resulting from operations		(7,444,196	)		21,745,808
Distributions to shareholders from net investment income:
Series I		(1,326,452	)		(1,104,262	)
Series II		(702,510	)		(467,104	)
Total distributions from net investment income		(2,028,962	)		(1,571,366	)
Share transactions–net:
Series I		(40,031,379	)		(56,488,740	)
Series II		(25,126,460	)		(10,025,853	)
Net increase (decrease) in net assets resulting from share transactions		(65,157,839	)		(66,514,593	)
Net increase (decrease) in net assets		(74,630,997	)		(46,340,151	)
Net assets:
Beginning of year		313,813,096			360,153,247
End of year (includes undistributed net investment income of $3,119,843 and $1,919,672, respectively)	$	239,182,099		$	313,813,096

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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

Invesco V.I. Basic Value Fund

	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 Daily 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide 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, 2013, 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, including litigation expenses; 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, 2013. 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, 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.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $10,843.

  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, 2011, Invesco was paid $73,168 for accounting and fund administrative services and reimbursed $654,565 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, Invesco Ltd., 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, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	235,317,002	$	3,902,952	$	—	$	239,219,954

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, 2011, the Fund engaged in securities sales of $1,845,703, which resulted in net realized gain of $520,464.

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

Invesco V.I. Basic Value Fund

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, 2011, the Fund paid legal fees of $1,495 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010:

	2011		2010
Ordinary income	$	2,028,962	$	1,571,366

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	3,210,688
Net unrealized appreciation — investments		23,734,411
Temporary book/tax differences		(90,845	)
Capital loss carryforward		(68,789,263	)
Shares of beneficial interest		281,117,108
Total net assets	$	239,182,099

  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.

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund utilized $12,040,127 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, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term		Long-Term		Total
December 31, 2016	$	28,504,080	$	—	$	28,504,080
December 31, 2017		32,409,899				32,409,899
December 31, 2018		7,875,284				7,875,284
	$	68,789,263	$	—	$	68,789,263

*  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 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, 2011 was $41,358,302 and $98,335,592, 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	$	44,100,350
Aggregate unrealized (depreciation) of investment securities		(20,365,939	)
Net unrealized appreciation of investment securities	$	23,734,411
Cost of investments for tax purposes is $215,485,543.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, on December 31, 2011, undistributed net investment income was increased by $3,338 and undistributed net realized gain (loss) was decreased by $3,338. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		969,060		$	6,229,063			1,839,415		$	11,111,452
Series II		2,174,535			13,057,835			4,402,680			25,876,503
Issued as reinvestment of dividends:
Series I		248,399			1,326,452			188,763			1,104,262
Series II		132,299			702,510			80,258			467,104
Reacquired:
Series I		(7,489,282	)		(47,586,894	)		(11,391,121	)		(68,704,454	)
Series II		(6,151,667	)		(38,886,805	)		(6,127,464	)		(36,369,460	)
Net increase (decrease) in share activity		(10,116,656	)	$	(65,157,839	)		(11,007,469	)	$	(66,514,593	)

^(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 Fund 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 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) on																						to average			to average net			Ratio of net
	Net asset				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 12/31/11	$	6.38	$	0.08	$	(0.28	)	$	(0.20	)	$	(0.06	)	$	—		$	(0.06	)	$	6.12		(3.05	)%	$	135,644		1.00	%(d)		1.00	%(d)		1.28	%(d)		15	%
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			1.00			0.65			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
Series II
Year ended 12/31/11		6.34		0.06		(0.28	)		(0.22	)		(0.04	)		—			(0.04	)		6.08		(3.39	)		103,538		1.25	(d)		1.25	(d)		1.03	(d)		15
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			1.25			0.40			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

(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 $158,424 and $116,218 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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, 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 audits 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, 2011 by correspondence with the custodian, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	938.60	$	4.98	$	1,020.06	$	5.19		1.02	%
Series II		1,000.00		936.50		6.20		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, 2011 through December 31, 2011, 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, 2011:

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. Basic Value Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
				��
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. Basic Value Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. Basic Value Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. Basic Value Fund

Invesco V.I. Capital Appreciation Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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 fiscal year ended December 31, 2011, Invesco V.I. Capital Appreciation Fund had negative returns and 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.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	-7.91	%
Series II Shares	-8.12
S&P 500 Index▼ (Broad Market Index)	2.09
Russell 1000 Growth Index▼ (Style-Specific Index)	2.64
Lipper VUF Multi-Cap Growth Funds Category Average▼ (Peer Group)	-3.59

Source: ^▼ 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 valuations 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. The result of this distillation process is a set of stocks we 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 employ 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. 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 dividing 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	We identify a more attractive investment opportunity.

Market conditions and your Fund

The fiscal year began with equity markets fueled on the second round of “quantitative easing” by the U.S. Federal Reserve, and markets rose through the first quarter of 2011. However, with the spring came increased volatility and significant macroeconomic distortions due to civil unrest in Egypt and Libya, flooding in Australia and a devastating earthquake and tsunami in Japan. Corporate earnings remained strong with largely positive surprises, but were often overshadowed by investor concerns about continuing high unemployment and soft housing data. Although markets stabilized and were generally in positive territory through the summer, major equity indexes sold off precipitously in August as the U.S. government struggled to raise the nation’s debt ceiling. Despite an eventual agreement between the White House and Congress, credit rating agency Standard & Poor’s announced the first-ever downgrade to long-term U.S. government debt. Uncertainty created by the downgrade, combined with the continuing saga surrounding the debt crisis in the eurozone, reignited fears of a global recession. Despite evidence of sustained, but muted, growth, these macroeconomic factors continued to weigh on markets through the end of the reporting period.

     In this environment, the Fund produced negative absolute returns and underperformed the Russell 1000 Growth Index for the reporting period. The Fund underperformed the style-specific index by the widest margins in the information technology (IT), industrials, consumer discretionary, energy, health care and financials sectors. Underperformance overall was driven predominately by stock selection.

Portfolio Composition

By sector

Information Technology	30.5	%
Consumer Discretionary	16.5
Industrials	11.9
Energy	11.2
Health Care	10.2
Consumer Staples	8.3
Materials	3.9
Financials	3.6
Telecommunication Services	2.3
Money Market Funds Plus
Other Assets Less Liabilities	1.6

Top 10 Equity Holdings*

1.	Apple Inc.	6.9	%
2.	Google Inc.-Class A	3.8
3.	DIRECTV-Class A	3.3
4.	QUALCOMM Inc.	2.9
5.	Amazon.com, Inc.	2.8
6.	Halliburton Co.	2.8
7.	MasterCard, Inc.-Class A	2.6
8.	CVS Caremark Corp.	2.5
9.	UnitedHealth Group, Inc.	2.4
10.	JPMorgan Chase & Co.	2.2

Total Net Assets	$531.7 million
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 V.I. Capital Appreciation Fund

     For the fiscal year, the Fund underperformed its style-specific index by the widest margin in the IT sector due primarily to stock selection. In this sector, Rovi was the largest detractor from Fund performance. Weakening consumer spending in August, along with fourth quarter guidance that some legacy product revenue was decelerating while newer growth products would be postponed, hurt company performance. Despite these obstacles, we believe long-term growth potential still exists for Rovi, as the company generally benefits from secular tail-winds – such as the transition from analog to digital cable and the growing adoption of connected televisions. Broadcom also detracted from Fund performance during the reporting period. Weak sales of smart-phones and tablets using their semiconductors led management to reduce future earnings expectations. Positions in both Rovi and Broadcom offset the positive performance from two of the largest contributors to Fund performance, Apple and MasterCard.

     In the industrials sector, the Fund’s underperformance was driven by stock selection. One of the largest single detractors to the Fund’s performance was construction and engineering services firm Foster Wheeler. The company missed out on an anticipated contract and, later in the reporting period, was disproportionately affected as energy prices declined. Examples of other holdings that were key detractors from Fund performance included industrial electric equipment producer ABB and commercial truck and engine maker Navistar International. Both companies were affected by wavering sentiment on the prospects for global growth.

     The Fund also underperformed its style-specific index in the consumer discretionary sector, driven again by stock selection. Our position in Amazon detracted from Fund performance due to weak revenue growth late in the reporting period after initial high expectations for the stock. Amazon’s spending was also higher than expected, although directed to building out rapid distribution centers and new products, which may drive future growth.

     In the energy sector, the Fund also underperformed its style-specific index due to stock selection and an emphasis on service providers and exploration companies with higher growth rates, which were down more than the defensive integrated oil companies and broader energy group. These firms included Halliburton, National Oilwell Varco and Weatherford International. We sold our position in National Oilwell Varco before the end of the reporting period.

     Some of the Fund’s underperformance was offset by outperformance from holdings in other sectors. The Fund outperformed by the widest margin in the consumer staples sector, driven by stock selection. Specialty coffeemaker and producer Green Mountain Coffee Roasters benefited from strong revenue and earnings growth, and increasing distribution agreements to use its Keurig single cup brewing system. The stock was sold from the portfolio during the reporting period. Costco Wholesale and beverage company Hansen Natural also contributed to performance.

     As we’ve discussed, the stock market experienced heavy volatility during the fiscal year. We would like to caution investors against making investment decisions based on short-term performance. We thank you for your commitment to Invesco V.I. Capital Appreciation 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.

Erik Voss
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Capital Appreciation Fund. He joined Invesco in 2010. Mr. Voss earned a B.S. in mathematics and an M.S. in finance from the University of Wisconsin.

Ido Cohen
Portfolio manager, is manager of Invesco V.I. Capital Appreciation Fund. He joined Invesco in 2010. Mr. Cohen is a cum laude graduate of The Wharton School of the University of Pennsylvania with a B.S. in economics.

Invesco V.I. Capital Appreciation Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class(es)

Fund and index data from 12/31/01*

* During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (5/5/93)			5.30	%
	10	Years	0.03
	5	Years	-3.67
	1	Year	-7.91
Series II Shares
Inception (8/21/01)			-0.03	%
	10	Years	-0.22
	5	Years	-3.91
	1	Year	-8.12

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 0.91% and 1.16%, 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 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. 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, 2011, 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

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

     Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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.

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

     Market risk. 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 market 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 indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

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

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. Capital Appreciation Fund

Schedule of Investments^(a)

December 31, 2011

	Shares		Value
Common Stocks & Other Equity Interests–98.36%
Aerospace & Defense–2.62%
Boeing Co. (The)		53,034	$	3,890,044
Precision Castparts Corp.		60,983		10,049,388
				13,939,432
Apparel Retail–0.12%
Limited Brands, Inc.		16,469		664,524
Apparel, Accessories & Luxury Goods–0.99%
Coach, Inc.		27,115		1,655,100
Prada S.p.A. (Italy)(b)(c)		347,300		1,562,230
Prada S.p.A. (Italy)(c)		455,500		2,048,936
				5,266,266
Application Software–1.19%
Citrix Systems, Inc.(c)		103,927		6,310,447
Asset Management & Custody Banks–1.40%
BlackRock, Inc.		41,690		7,430,826
Auto Parts & Equipment–0.30%
BorgWarner, Inc.(c)		24,815		1,581,708
Automotive Retail–0.57%
AutoZone, Inc.(c)		9,322		3,029,370
Biotechnology–1.90%
Celgene Corp.(c)		60,331		4,078,376
Gilead Sciences, Inc.(c)		147,744		6,047,162
				10,125,538
Cable & Satellite–4.45%
Comcast Corp.–Class A		265,532		6,295,764
DIRECTV–Class A(c)		406,260		17,371,677
				23,667,441
Casinos & Gaming–0.79%
Las Vegas Sands Corp.(c)		98,801		4,221,767
Communications Equipment–3.61%
F5 Networks, Inc.(c)		21,252		2,255,262
Juniper Networks, Inc.(c)		68,044		1,388,778
QUALCOMM Inc.		284,420		15,557,774
				19,201,814
Computer Hardware–6.94%
Apple Inc.(c)		91,142		36,912,510
Computer Storage & Peripherals–3.37%
EMC Corp.(c)		535,947		11,544,298
NetApp, Inc.(c)		119,966		4,351,167
SanDisk Corp.(c)		40,721		2,003,881
				17,899,346
Construction & Engineering–1.09%
Foster Wheeler AG (Switzerland)(c)		301,569		5,772,031
Construction & Farm Machinery & Heavy Trucks–1.47%
Cummins Inc.		68,759		6,052,167
Navistar International Corp.(c)		46,304		1,753,996
				7,806,163
Data Processing & Outsourced Services–2.61%
MasterCard, Inc.–Class A		37,275		13,896,866
Department Stores–1.83%
Macy’s, Inc.		301,947		9,716,654
Drug Retail–2.48%
CVS Caremark Corp.		323,205		13,180,300
Fertilizers & Agricultural Chemicals–1.56%
Monsanto Co.		69,173		4,846,952
Mosaic Co. (The)		68,288		3,443,764
				8,290,716
Food Retail–0.50%
Kroger Co. (The)		109,697		2,656,861
Footwear–1.02%
NIKE, Inc.–Class B		56,437		5,438,834
General Merchandise Stores–0.34%
Dollar Tree, Inc.(c)		21,701		1,803,570
Gold–2.32%
Barrick Gold Corp. (Canada)		69,568		3,147,952
Goldcorp, Inc. (Canada)		208,072		9,207,186
				12,355,138
Health Care Distributors–0.16%
Cardinal Health, Inc.		21,347		866,902
Health Care Equipment–0.40%
Baxter International Inc.		43,362		2,145,552
Health Care Services–1.40%
Express Scripts, Inc.(c)		166,165		7,425,914

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 Technology–0.82%
Allscripts Healthcare Solutions, Inc.(c)		230,011	$	4,356,408
Heavy Electrical Equipment–1.88%
ABB Ltd. (Switzerland)(c)		141,930		2,671,766
ABB Ltd.–ADR (Switzerland)(c)		388,390		7,313,383
				9,985,149
Home Improvement Retail–0.67%
Home Depot, Inc. (The)		84,607		3,556,878
Hotels, Resorts & Cruise Lines–0.63%
Starwood Hotels & Resorts Worldwide, Inc.		70,020		3,358,859
Household Products–2.05%
Procter & Gamble Co. (The)		163,702		10,920,560
Hypermarkets & Super Centers–0.78%
Costco Wholesale Corp.		49,535		4,127,256
Industrial Conglomerates–1.60%
Danaher Corp.		181,021		8,515,228
Industrial Machinery–0.72%
Ingersoll-Rand PLC (Ireland)		126,153		3,843,882
Integrated Oil & Gas–2.16%
Exxon Mobil Corp.		47,767		4,048,731
Occidental Petroleum Corp.		79,429		7,442,497
				11,491,228
Internet Retail–2.79%
Amazon.com, Inc.(c)		85,692		14,833,285
Internet Software & Services–5.47%
Baidu, Inc.–ADR (China)(c)		34,395		4,005,986
eBay Inc.(c)		160,982		4,882,584
Google Inc.–Class A(c)		31,290		20,210,211
				29,098,781
IT Consulting & Other Services–3.43%
Accenture PLC–Class A (Ireland)		148,065		7,881,500
Cognizant Technology Solutions Corp.–Class A(c)		160,826		10,342,720
				18,224,220
Life Sciences Tools & Services–1.47%
Agilent Technologies, Inc.(c)		223,216		7,796,935
Managed Health Care–2.36%
UnitedHealth Group Inc.		247,582		12,547,456
Oil & Gas Drilling–1.44%
Ensco PLC–ADR (United Kingdom)		162,865		7,641,626
Oil & Gas Equipment & Services–4.87%
Cameron International Corp.(c)		109,469		5,384,780
Halliburton Co.		433,690		14,966,642
Weatherford International Ltd.(c)		379,619		5,557,622
				25,909,044
Oil & Gas Exploration & Production–2.78%
Anadarko Petroleum Corp.		144,973		11,065,789
Noble Energy, Inc.		39,160		3,696,312
				14,762,101
Other Diversified Financial Services–2.24%
JPMorgan Chase & Co.		358,444		11,918,263
Packaged Foods & Meats–0.30%
Mead Johnson Nutrition Co.		23,253		1,598,179
Pharmaceuticals–1.64%
Allergan, Inc.		99,424		8,723,462
Railroads–1.57%
Union Pacific Corp.		78,849		8,353,263
Restaurants–1.94%
Krispy Kreme Doughnuts Inc.–Wts., expiring 03/02/12(d)		1,194		72
Starbucks Corp.		224,609		10,334,260
				10,334,332
Semiconductors–1.53%
Broadcom Corp.–Class A(c)		225,046		6,607,350
Xilinx, Inc.		47,830		1,533,430
				8,140,780
Soft Drinks–2.22%
Coca-Cola Co. (The)		128,488		8,990,305
Hansen Natural Corp.(c)		30,434		2,804,189
				11,794,494
Systems Software–2.33%
Check Point Software Technologies Ltd. (Israel)(c)		87,385		4,591,208
Oracle Corp.		41,902		1,074,786
Rovi Corp.(c)		272,654		6,701,836
				12,367,830
Trucking–0.92%
J.B. Hunt Transport Services, Inc.		107,993		4,867,245

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

Invesco V.I. Capital Appreciation Fund

	Shares		Value
Wireless Telecommunication Services–2.32%
America Movil SAB de C.V.–Series L–ADR (Mexico)		134,919	$	3,049,170
American Tower Corp.–Class A		154,428		9,267,224
				12,316,394
Total Common Stocks & Other Equity Interests (Cost $466,669,459)				522,989,628
Money Market Funds–1.64%
Liquid Assets Portfolio–Institutional Class(e)		4,368,252		4,368,252
Premier Portfolio–Institutional Class(e)		4,368,253		4,368,253
Total Money Market Funds (Cost $8,736,505)				8,736,505
TOTAL INVESTMENTS–100.00% (Cost $475,405,964)				531,726,133
OTHER ASSETS LESS LIABILITIES–0.00%				15,945
NET ASSETS–100.00%			$	531,742,078

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)	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, 2011 represented 0.29% of the Fund’s Net Assets.
(c)	Non-income producing security.
(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.

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, 2011

Assets:
Investments, at value (Cost $466,669,459)	$	522,989,628
Investments in affiliated money market funds, at value and cost		8,736,505
Total investments, at value (Cost $475,405,964)		531,726,133
Receivable for:
Investments sold		2,363,469
Fund shares sold		100,509
Dividends		203,784
Investment for trustee deferred compensation and retirement plans		134,932
Other assets		388
Total assets		534,529,215
Liabilities:
Payable for:
Investments purchased		1,739,199
Fund shares reacquired		298,716
Accrued fees to affiliates		415,382
Accrued other operating expenses		39,637
Trustee deferred compensation and retirement plans		294,203
Total liabilities		2,787,137
Net assets applicable to shares outstanding	$	531,742,078
Net assets consist of:
Shares of beneficial interest	$	706,507,315
Undistributed net investment income (loss)		(289,869	)
Undistributed net realized gain (loss)		(230,795,537	)
Unrealized appreciation		56,320,169
	$	531,742,078
Net Assets:
Series I	$	383,916,540
Series II	$	147,825,538
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		17,925,665
Series II		7,020,795
Series I:
Net asset value per share	$	21.42
Series II:
Net asset value per share	$	21.06

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $37,724)	$	5,922,067
Dividends from affiliated money market funds (includes securities lending income of $4,376)		19,737
Total investment income		5,941,804
Expenses:
Advisory fees		3,863,883
Administrative services fees		1,602,073
Custodian fees		22,757
Distribution fees — Series II		428,792
Transfer agent fees		62,019
Trustees’ and officers’ fees and benefits		45,137
Other		65,226
Total expenses		6,089,887
Less: Fees waived		(22,772	)
Net expenses		6,067,115
Net investment income (loss)		(125,311	)
Realized and unrealized gain (loss) from:
Net realized gain from:
Investment securities (includes net gains from securities sold to affiliates of $149,410)		57,777,721
Foreign currencies		57,222
		57,834,943
Change in net unrealized appreciation (depreciation) of investment securities		(103,856,532	)
Net realized and unrealized gain (loss)		(46,021,589	)
Net increase (decrease) in net assets resulting from operations	$	(46,146,900	)

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, 2011 and 2010

	2011			2010
Operations:
Net investment income (loss)	$	(125,311	)	$	735,384
Net realized gain		57,834,943			45,392,890
Change in net unrealized appreciation (depreciation)		(103,856,532	)		47,561,475
Net increase (decrease) in net assets resulting from operations		(46,146,900	)		93,689,749
Distributions to shareholders from net investment income:
Series I		(666,196	)		(3,537,619	)
Series II		—			(915,129	)
Total distributions from net investment income		(666,196	)		(4,452,748	)
Share transactions–net:
Series I		(80,956,764	)		(78,894,363	)
Series II		(24,185,092	)		(32,232,888	)
Net increase (decrease) in net assets resulting from share transactions		(105,141,856	)		(111,127,251	)
Net increase (decrease) in net assets		(151,954,952	)		(21,890,250	)
Net assets:
Beginning of year		683,697,030			705,587,280
End of year (includes undistributed net investment income (loss) of $(289,869) and $379,618, respectively)	$	531,742,078		$	683,697,030

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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

Invesco V.I. Capital Appreciation Fund

	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 Daily 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide 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, 2013, 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

Invesco V.I. Capital Appreciation Fund

expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2013. 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, 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 (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $22,772.

  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, 2011, Invesco was paid $153,324 for accounting and fund administrative services and reimbursed $1,448,749 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, IIS and/or IDI.

NOTE 3—Additional Valuation Information

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

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

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	528,114,967	$	3,611,166	$	—	$	531,726,133

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, 2011, the Fund engaged in securities purchases of $12,754,416 and securities sales of $8,049,534, which resulted in net realized gains of $149,410.

Invesco V.I. Capital Appreciation 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, 2011, the Fund paid legal fees of $1,943 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010:

	2011		2010
Ordinary income	$	666,196	$	4,452,748

Tax Components of Net Assets at Period-End:

	2011
Net unrealized appreciation — investments	$	53,902,447
Temporary book/tax differences		(289,869	)
Capital loss carryforward		(228,377,815	)
Shares of beneficial interest		706,507,315
Total net assets	$	531,742,078

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund utilized $56,271,633 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, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term		Long-Term		Total
December 31, 2017	$	228,377,815	$	—	$	228,377,815

*  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 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, 2011 was $787,064,070 and $882,059,722, 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	$	85,530,142
Aggregate unrealized (depreciation) of investment securities		(31,627,695	)
Net unrealized appreciation of investment securities	$	53,902,447
Cost of investments for tax purposes is $477,823,686.

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, 2011, undistributed net investment income (loss) was increased by $122,020, undistributed net realized gain (loss) was decreased by $15,904 and shares of beneficial interest decreased by $106,116. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		490,125		$	11,275,302			587,627		$	12,238,362
Series II		421,024			9,533,391			512,761			10,258,765
Issued as reinvestment of dividends:
Series I		32,168			666,196			170,899			3,537,619
Series II		—			—			44,903			915,129
Reacquired:
Series I		(3,993,846	)		(92,898,262	)		(4,572,413	)		(94,670,344	)
Series II		(1,480,197	)		(33,718,483	)		(2,127,908	)		(43,406,782	)
Net increase (decrease) in share activity		(4,530,726	)	$	(105,141,856	)		(5,384,131	)	$	(111,127,251	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 41% of the outstanding shares of the Fund. 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 Fund 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 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) on																to average			to average net			Ratio of net
	Net asset					securities						Dividends										net assets			assets without			investment
	value,		Net			(both			Total from			from net			Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		investment			realized and			investment			investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income (loss)			unrealized)			operations			income			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/11	$	23.30	$	0.01	(c)	$	(1.85	)	$	(1.84	)	$	(0.04	)	$	21.42		(7.91	)%	$	383,917		0.91	%(d)		0.91	%(d)		0.06	%(d)		128	%
Year ended 12/31/10		20.33		0.04	(c)		3.09			3.13			(0.16	)		23.30		15.49			498,493		0.90			0.91			0.19			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			0.91			0.79			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
Series II
Year ended 12/31/11		22.92		(0.04	)(c)		(1.82	)		(1.86	)		—			21.06		(8.12	)		147,826		1.16	(d)		1.16	(d)		(0.19	)(d)		128
Year ended 12/31/10		20.00		(0.01	)(c)		3.04			3.03			(0.11	)		22.92		15.21			185,204		1.15			1.16			(0.06	)		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			1.16			0.54			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

(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 $451,630 and $171,517 for Series I and Series II shares, respectively.

NOTE 12—Proposed Reorganization

The Board of Trustees of the Fund 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”).

  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 2012. 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.

Invesco V.I. Capital Appreciation 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. 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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, the results of its operations for the year then ended, and 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	879.00	$	4.36	$	1,020.57	$	4.69		0.92	%
Series II		1,000.00		878.20		5.54		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, 2011 through December 31, 2011, 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, 2011:

Federal and State Income Tax
Corporate Dividends Received Deduction*	98.53%

*  The above percentage is 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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. Capital Appreciation Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. Capital Appreciation Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. Capital Appreciation Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. Capital Appreciation Fund

Invesco V.I. Capital Development Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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

On March 22, 2011, James Leach joined the Fund’s management team as portfolio manager. On the same date, Paul Rasplicka left the Fund’s management team.

     For the fiscal year ended December 31, 2011, Invesco V.I. Capital Development Fund had negative returns and underperformed the Fund’s style-specific benchmark, the Russell Midcap Growth Index. Underperformance was driven primarily by stock selection in several sectors.

     The Fund underperformed the broad market, as represented by the S&P 500 Index, as mid-cap stocks generally underperformed large-cap stocks.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	-7.16	%
Series II Shares	-7.37
S&P 500 Index▼ (Broad Market Index)	2.09
Russell Midcap Growth Index▼ (Style-Specific Index)	-1.65
Lipper VUF Mid-Cap Growth Funds Index▼ (Peer Group Index)	-4.69

Source(s):^▼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 valuations 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. The result of this distillation process is a set of stocks we 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 employ 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. 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 dividing 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	We identify a more attractive investment opportunity.

Market conditions and your Fund

The fiscal year began with equity markets fueled on the second round of “quantitative easing” by the U.S. Federal Reserve, and markets rose through the first quarter of 2011. However, with the spring came increased volatility and significant macroeconomic distortions due to civil unrest in Egypt and Libya, flooding in Australia and a devastating earthquake and tsunami in Japan. Corporate earnings remained strong with largely positive surprises, but were often overshadowed by investor concerns about continuing high unemployment and soft housing data. Although markets stabilized and were generally in positive territory through the summer, major equity indexes sold off precipitously in August as the U.S. government struggled to raise the nation’s debt ceiling. Despite an eventual agreement between the White House and Congress, credit rating agency Standard & Poor’s announced the first-ever downgrade to long-term U.S. government debt. Uncertainty created by the downgrade, combined with the continuing saga surrounding the debt crisis in the eurozone, reignited fears of a global recession. Despite evidence of sustained, but muted, growth, these macroeconomic factors continued to weigh on markets through the end of the reporting period.

Portfolio Composition

By sector

Consumer Discretionary	22.0	%
Information Technology	18.5
Industrials	16.9
Health Care	16.6
Energy	9.1
Materials	5.9
Consumer Staples	3.3
Telecommunication Services	3.0
Financials	2.8
Money Market Funds Plus
Other Assets Less Liabilities	1.9

Top 10 Equity Holdings*

1.	Cameron International Corp.	2.4	%
2.	Kansas City Southern	2.4
3.	DaVita, Inc.	2.3
4.	Amphenol Corp.-Class A	2.1
5.	Airgas, Inc.	2.0
6.	Whiting Petroleum Corp.	2.0
7.	Aetna Inc.	2.0
8.	Church & Dwight Co., Inc.	2.0
9.	PetSmart, Inc.	2.0
10.	Discovery Communications, Inc.
	-Class A	2.0

Total Net Assets	$193.6 million
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. Capital Development Fund

     In this environment, the Fund produced negative absolute returns and underperformed the Russell Midcap Growth Index for the fiscal year. The Fund underperformed by the widest margins in the consumer discretionary, industrials, consumer staples and telecommunication services sectors. Some of this underperformance was offset by outperformance in other sectors, including financials and information technology (IT).

     The Fund underperformed most significantly in the consumer discretionary sector, primarily driven by stock selection. In this sector, clothing retailer Abercrombie & Fitch detracted from Fund performance. The company’s exposure to Europe, amid ongoing austerity and debt concerns, hurt stock performance. Internet-based publishing and production service Shutterfly also detracted from Fund performance as management guided down its earnings outlook late in the year. Both of these holdings were sold during the reporting period. Hotel operator Starwood Hotels was also a detractor for the fiscal year; its revenues tend to be correlated to economic growth, and sentiment turned mostly negative during the reporting period. The negative effect of these holdings offset the contribution to Fund performance from ULTA Salon, Cosmetics & Fragrance, which was the Fund’s top contributor.

     The industrials sector was another area of weakness for the Fund due to stock selection and an overweight position in the underperforming sector. Holdings that detracted from Fund performance included construction equipment manufacturer Terex and commercial truck and engine maker Navistar International. Both companies were affected by wavering sentiment on the prospects for global growth. Construction and engineering services firm Foster Wheeler also detracted from Fund performance. The company did not win an anticipated contract and, later in the reporting period, was disproportionately affected as energy prices declined. Terex and Foster Wheeler were both sold during the reporting period.

     Investors sought stability during the reporting period and rotated into the more defensive consumer staples sector. Returns for this sector were higher than most other sectors, and the Fund’s underweight position detracted from Fund performance.

     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 financials sector, due to stock selection and an underweight position. One holding that made a positive contribution to performance was commercial real estate brokerage firm CB Richard Ellis, as investors reacted positively to news of increasing property sales and leasing in the U.S. and abroad. Discover Financial Services and Moody’s contributed to Fund performance, with Moody’s benefiting from the significant tailwind of new debt issuance during the year. Our holdings in CB Richard Ellis and Moody’s were both sold during the reporting period.

     Outperformance in the IT sector was a result of strong stock selection. Data warehousing solution provider Teradata, middleware provider TIBCO Software and semiconductor capital equipment designer KLA-Tencor all contributed to Fund performance during the year. All three stocks were sold during the reporting period in favor of new opportunities.

     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. We thank you for your commitment to Invesco V.I. Capital Development 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.

James Leach
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Capital Development Fund. He joined Invesco in 2011. Mr. Leach earned a B.S. in mechanical engineering from the University of California and an M.B.A. from the Stern School of Business at New York University.

Invesco V.I. Capital Development Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class(es)

Fund and index data from 12/31/01*

* During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (5/1/98)			4.12	%
	10	Years	3.77
	5	Years	-1.61
	1	Year	-7.16
Series II Shares
Inception (8/21/01)			3.43	%
	10	Years	3.51
	5	Years	-1.85
	1	Year	-7.37

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. Capital Development 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. 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, 2011, 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

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

     Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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 investing risk. 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.

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

     Market risk. 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.

     Small- and mid-capitalization risks. 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.

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 indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

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

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. Capital Development Fund

Schedule of Investments^(a)

December 31, 2011

	Shares		Value
Common Stocks–98.06%
Aerospace & Defense–1.08%
Triumph Group, Inc.		35,825	$	2,093,971
Air Freight & Logistics–1.57%
C.H. Robinson Worldwide, Inc.		43,643		3,045,409
Apparel, Accessories & Luxury Goods–2.85%
Coach, Inc.		53,390		3,258,926
Michael Kors Holdings Ltd.(b)		82,646		2,252,103
				5,511,029
Application Software–0.86%
Citrix Systems, Inc.(b)		27,317		1,658,688
Asset Management & Custody Banks–1.21%
Affiliated Managers Group, Inc.(b)		24,382		2,339,453
Auto Parts & Equipment–3.10%
BorgWarner, Inc.(b)(c)		35,910		2,288,903
Gentex Corp.		125,611		3,716,830
				6,005,733
Automobile Manufacturers–1.11%
Tesla Motors, Inc.(b)(c)		75,380		2,152,853
Biotechnology–2.59%
BioMarin Pharmaceutical Inc.(b)		81,832		2,813,384
United Therapeutics Corp.(b)		46,687		2,205,961
				5,019,345
Broadcasting–1.98%
Discovery Communications, Inc.–Class A(b)		93,483		3,829,998
Communications Equipment–2.57%
F5 Networks, Inc.(b)		18,542		1,967,677
Juniper Networks, Inc.(b)		88,722		1,810,816
Sycamore Networks, Inc.(b)		67,425		1,206,908
				4,985,401
Computer Storage & Peripherals–1.58%
NetApp, Inc.(b)		32,076		1,163,396
Western Digital Corp.(b)		61,289		1,896,895
				3,060,291
Construction & Engineering–1.16%
MasTec Inc.(b)		129,200		2,244,204
Construction & Farm Machinery & Heavy Trucks–2.61%
AGCO Corp.(b)		63,671		2,735,943
Navistar International Corp.(b)		60,990		2,310,301
				5,046,244
Consumer Finance–1.61%
Discover Financial Services		129,591		3,110,184
Electrical Components & Equipment–1.59%
Cooper Industries PLC (Ireland)		56,674		3,068,897
Electronic Components–2.10%
Amphenol Corp.–Class A		89,718		4,072,300
Fertilizers & Agricultural Chemicals–1.41%
Intrepid Potash, Inc.(b)		120,463		2,726,078
Footwear–1.05%
Deckers Outdoor Corp.(b)		26,901		2,032,909
General Merchandise Stores–1.64%
Dollar Tree, Inc.(b)		38,098		3,166,325
Health Care Equipment–1.36%
CareFusion Corp.(b)		103,982		2,642,183
Health Care Facilities–3.06%
Brookdale Senior Living Inc.(b)		140,491		2,443,138
Universal Health Services, Inc.–Class B		89,417		3,474,745
				5,917,883
Health Care Services–4.98%
DaVita, Inc.(b)		59,325		4,497,428
Express Scripts, Inc.(b)		66,828		2,986,544
HMS Holdings Corp.(b)		67,546		2,160,121
				9,644,093
Health Care Technology–1.51%
Allscripts Healthcare Solutions, Inc.(b)		154,345		2,923,294
Hotels, Resorts & Cruise Lines–1.49%
Starwood Hotels & Resorts Worldwide, Inc.		60,200		2,887,794
Household Products–1.99%
Church & Dwight Co., Inc.		84,032		3,845,304
Human Resource & Employment Services–1.32%
Robert Half International, Inc.		89,647		2,551,354
Industrial Gases–2.02%
Airgas, Inc.		50,095		3,911,418
Industrial Machinery–3.48%
Flowserve Corp.		30,044		2,983,970
Gardner Denver Inc.		48,778		3,758,833
				6,742,803
Internet Software & Services–1.61%
Equinix, Inc.(b)		30,832		3,126,365

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

Invesco V.I. Capital Development Fund

	Shares		Value
IT Consulting & Other Services–1.60%
Cognizant Technology Solutions Corp.–Class A(b)		38,070	$	2,448,282
Gartner, Inc.(b)		18,916		657,709
				3,105,991
Managed Health Care–3.05%
Aetna Inc.		92,374		3,897,259
Aveta, Inc.(b)(d)		237,251		2,016,634
				5,913,893
Movies & Entertainment–1.29%
Cinemark Holdings, Inc.		135,366		2,502,917
Oil & Gas Drilling–0.59%
Patterson-UTI Energy, Inc.		57,269		1,144,235
Oil & Gas Equipment & Services–4.36%
Cameron International Corp.(b)		96,180		4,731,094
Key Energy Services, Inc.(b)		110,824		1,714,447
Weatherford International Ltd.(b)		136,459		1,997,760
				8,443,301
Oil & Gas Exploration & Production–4.14%
Cabot Oil & Gas Corp.		45,312		3,439,181
Sanchez Energy Corp.(b)(c)		38,946		672,208
Whiting Petroleum Corp.(b)		83,494		3,898,335
				8,009,724
Packaged Foods & Meats–1.34%
H.J. Heinz Co.		48,136		2,601,269
Railroads–2.41%
Kansas City Southern(b)		68,486		4,657,733
Restaurants–1.70%
Panera Bread Co.–Class A(b)		23,298		3,295,502
Semiconductor Equipment–0.84%
Lam Research Corp.(b)		43,920		1,625,918
Semiconductors–5.18%
Altera Corp.		89,440		3,318,224
Avago Technologies Ltd. (Singapore)		67,523		1,948,714
Linear Technology Corp.		89,741		2,694,922
LSI Corp.(b)		347,251		2,066,143
				10,028,003
Specialized Consumer Services–0.73%
Coinstar, Inc.(b)(c)		31,133		1,420,910
Specialty Chemicals–2.49%
Albemarle Corp.		53,541		2,757,897
LyondellBasell Industries N.V.–Class A (Netherlands)		63,252		2,055,057
				4,812,954
Specialty Stores–5.08%
Dick’s Sporting Goods, Inc.		78,882		2,909,168
PetSmart, Inc.		74,954		3,844,391
Ulta Salon, Cosmetics & Fragrance, Inc.(b)		47,543		3,086,491
				9,840,050
Systems Software–0.96%
Check Point Software Technologies Ltd. (Israel)(b)		35,497		1,865,012
Technology Distributors–1.15%
Avnet, Inc.(b)		71,685		2,228,687
Trucking–1.69%
J.B. Hunt Transport Services, Inc.		72,443		3,265,006
Wireless Telecommunication Services–2.97%
NII Holdings Inc.(b)		98,771		2,103,822
SBA Communications Corp.–Class A(b)		84,821		3,643,910
				5,747,732
Total Common Stocks (Cost $177,302,102)				189,870,640
Money Market Funds–1.73%
Liquid Assets Portfolio–Institutional Class(e)		1,676,664		1,676,664
Premier Portfolio–Institutional Class(e)		1,676,665		1,676,665
Total Money Market Funds (Cost $3,353,329)				3,353,329
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–99.79% (Cost $180,655,431)				193,223,969
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–2.21%
Liquid Assets Portfolio–Institutional Class (Cost $4,284,449)(e)(f)		4,284,449		4,284,449
TOTAL INVESTMENTS–102.00% (Cost $184,939,880)				197,508,418
OTHER ASSETS LESS LIABILITIES–(2.00)%				(3,880,291	)
NET ASSETS–100.00%			$	193,628,127

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, 2011.
(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, 2011 represented 1.04% 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. Capital Development Fund

Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $177,302,102)*	$	189,870,640
Investments in affiliated money market funds, at value and cost		7,637,778
Total investments, at value (Cost $184,939,880)		197,508,418
Receivable for:
Investments sold		696,028
Fund shares sold		44,131
Dividends		116,522
Investment for trustee deferred compensation and retirement plans		50,279
Total assets		198,415,378
Liabilities:
Payable for:
Fund shares reacquired		202,496
Collateral upon return of securities loaned		4,284,449
Accrued fees to affiliates		177,996
Accrued other operating expenses		33,393
Trustee deferred compensation and retirement plans		88,917
Total liabilities		4,787,251
Net assets applicable to shares outstanding	$	193,628,127
Net assets consist of:
Shares of beneficial interest	$	236,418,607
Undistributed net investment income (loss)		(86,599	)
Undistributed net realized gain (loss)		(55,272,392	)
Unrealized appreciation		12,568,511
	$	193,628,127
Net Assets:
Series I	$	112,296,883
Series II	$	81,331,244
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		9,019,882
Series II		6,743,207
Series I:
Net asset value per share	$	12.45
Series II:
Net asset value per share	$	12.06

*  At December 31, 2011, securities with an aggregate value of $4,174,866 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $48,392)	$	1,713,482
Dividends from affiliated money market funds (includes securities lending income of $29,879)		36,662
Total investment income		1,750,144
Expenses:
Advisory fees		1,626,496
Administrative services fees		601,926
Custodian fees		18,795
Distribution fees — Series II		238,337
Transfer agent fees		35,213
Trustees’ and officers’ fees and benefits		27,156
Other		71,860
Total expenses		2,619,783
Less: Fees waived		(12,792	)
Net expenses		2,606,991
Net investment income (loss)		(856,847	)
Realized and unrealized gain (loss) from:
Net realized gain from:
Investment securities (includes net gains from securities sold to affiliates of $1,322,373)		21,932,463
Foreign currencies		21
		21,932,484
Change in net unrealized appreciation (depreciation) of:
Investment securities		(46,143,284	)
Foreign currencies		(135	)
		(46,143,419	)
Net realized and unrealized gain (loss)		(24,210,935	)
Net increase (decrease) in net assets resulting from operations	$	(25,067,782	)

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, 2011 and 2010

	2011			2010
Operations:
Net investment income (loss)	$	(856,847	)	$	(470,655	)
Net realized gain		21,932,484			23,142,942
Change in net unrealized appreciation (depreciation)		(46,143,419	)		5,835,983
Net increase (decrease) in net assets resulting from operations		(25,067,782	)		28,508,270
Share transactions–net:
Series I		47,766,607			(12,617,550	)
Series II		(4,817,752	)		(16,250,389	)
Net increase (decrease) in net assets resulting from share transactions		42,948,855			(28,867,939	)
Net increase (decrease) in net assets		17,881,073			(359,669	)
Net assets:
Beginning of year		175,747,054			176,106,723
End of year (includes undistributed net investment income (loss) of $(86,599) and $(51,861), respectively)	$	193,628,127		$	175,747,054

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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. 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

Invesco V.I. Capital Development Fund

	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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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.	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

Invesco V.I. Capital Development Fund

	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 affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
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”). Effective May 2, 2011, under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Daily Net Assets	Rate
First $250 million		0	.745%
Next $100 million		0	.73%
Over $350 million		0	.625%

  Prior to May 2, 2011, the Fund paid an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

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

  Also prior to May 2, 2011, the Adviser had 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least June 30, 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 items or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless 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 reimburse expenses during the period under this expense limitation.

  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.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $12,792.

  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, 2011, Invesco was paid $60,108 for accounting and fund administrative services and reimbursed $541,818 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, IIS and/or IDI.

NOTE 3—Additional Valuation Information

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

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

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	195,491,784	$	2,016,634	$	—	$	197,508,418

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. Capital Development 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, 2011, the Fund engaged in securities purchases of $6,083,616 and securities sales of $7,174,591, which resulted in net realized gains of $1,322,373.

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, 2011, the Fund paid legal fees of $1,371 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010.

Tax Components of Net Assets at Period-End:

	2011
Net unrealized appreciation — investments	$	12,239,409
Net unrealized appreciation (depreciation) — other investments		(27	)
Temporary book/tax differences		(86,599	)
Capital loss carryforward		(54,943,263	)
Shares of beneficial interest		236,418,607
Total net assets	$	193,628,127

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. Under these limitation rules, the Fund is limited to utilizing $ 42,247,554 of capital loss carryforward in the fiscal year ending December 31, 2012.

  The Fund utilized $ 21,958,257 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, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term		Long-Term		Total
December 31, 2015	$	4,972,522	$	—	$	4,972,522
December 31, 2016		23,511,984		—		23,511,984
December 31, 2017		26,458,757		—		26,458,757
Total capital loss carryforward	$	54,943,263	$	—	$	54,943,263

*  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 2, 2011, the date of reorganization of Invesco V.I. Dynamics Fund into the Fund and realized on securities held in each fund at such date of reorganization, the capital loss carryforward may be further limited for up to five years from the date of the reorganization.

Invesco V.I. Capital Development 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, 2011 was $333,704,625 and $315,253,426, 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	$	23,382,697
Aggregate unrealized (depreciation) of investment securities		(11,143,288	)
Net unrealized appreciation of investment securities	$	12,239,409
Cost of investments for tax purposes is $185,269,009.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of net operating losses, on December 31, 2011, undistributed net investment income (losses) was increased by $846,110, undistributed net realized gain (loss) was increased by $41 and shares of beneficial interest decreased by $846,151. Further, as a result of tax deferrals acquired in the reorganization of Invesco V.I. Dynamics Fund into the Fund, undistributed net investment income (loss) was decreased by $24,001, undistributed net realized gain (loss) was decreased by $23,771,407 and shares of beneficial interest increased by $23,795,408. These reclassifications had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		4,950,569		$	69,861,938			985,705		$	11,570,756
Series II		2,003,550			26,759,687			838,860			9,669,323
Issued in connection with acquisitions:(b)
Series I		4,084,698			61,763,293			—			—
Series II		675			9,893			—			—
Reacquired:
Series I		(6,179,608	)		(83,858,624	)		(2,070,684	)		(24,188,306	)
Series II		(2,411,144	)		(31,587,332	)		(2,263,580	)		(25,919,712	)
Net increase (decrease) in share activity		2,448,740		$	42,948,855			(2,509,699	)	$	(28,867,939	)

(a)

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 62% of the outstanding shares of the Fund. 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 Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

(b)

As of the opening of business on May 2, 2011, the Fund acquired all the net assets of Invesco V.I. Dynamics Fund (the “Target Fund”) pursuant to a plan of reorganization approved by the Trustees of the Fund on November 10, 2010 and by the shareholders of the Target Fund on April 1, 2011. The acquisition was accomplished by a tax-free exchange of 4,085,373 shares of the Fund for 3,130,800 shares outstanding of the Target Fund as of the close of business on April 29, 2011. Each class of the Target Fund was exchanged for the like class of shares of the Fund based on the relative net asset value of the Target Fund to the net asset value of the Fund at the close of business on April 29, 2011. The Target Fund’s net assets at that date of $61,773,186 including $13,383,842 of unrealized appreciation were combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $228,323,159 and $290,096,345 immediately after the acquisition.

     The pro forma results of operations for the year ended December 31, 2011, assuming the reorganization had been completed on January 1, 2011, the beginning of the annual reporting period, are as follows:

Net investment income (loss)	$	(868,058	)
Net realized/unrealized gains (losses)		(17,700,362	)
Change in net assets resulting from operations	$	(18,568,420	)

     The combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Target Fund that have been included in the Fund’s Statement of Operations since May 2, 2011.

Invesco V.I. Capital Development 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) on																to average			to average net			Ratio of net
	Net asset		Net			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)(a)			unrealized)			operations			gains			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/11	$	13.41	$	(0.04	)	$	(0.92	)	$	(0.96	)	$	—		$	12.45		(7.16	)%	$	112,297		1.08	%(d)		1.09	%(d)		(0.28	)%(d)		161	%
Year ended 12/31/10		11.29		(0.02	)		2.14			2.12			—			13.41		18.78			82,665		1.08			1.09			(0.14	)		79
Year ended 12/31/09		7.93		(0.04	)		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	)		(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	)		2.14			2.04			(1.62	)		18.85		10.84			149,776		1.05			1.06			(0.47	)		109
Series II
Year ended 12/31/11		13.02		(0.07	)		(0.89	)		(0.96	)		—			12.06		(7.37	)		81,331		1.33	(d)		1.34	(d)		(0.53	)(d)		161
Year ended 12/31/10		10.99		(0.04	)		2.07			2.03			—			13.02		18.47			93,082		1.33			1.34			(0.39	)		79
Year ended 12/31/09		7.74		(0.06	)		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	)		(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	)		2.11			1.96			(1.62	)		18.53		10.55			190,815		1.30			1.31			(0.72	)		109

(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. For the period ending December 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $47,957,386 and sold of $37,916,746 in effect to realign the Fund’s portfolio holdings after the reorganization of Invesco V.I. Dynamics Fund into the Fund.
(d)	Ratios are based on average daily net assets (000’s) of $122,525 and $95,335 for Series I and Series II shares, respectively.

NOTE 12—Proposed Reorganization

The Board of Trustees of the Fund 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. Mid Cap Growth Fund (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 2012. 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.

Invesco V.I. Capital Development 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. 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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 14, 2012

Houston, Texas

Invesco V.I. Capital Development 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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	856.30	$	5.15	$	1,019.66	$	5.60		1.10	%
Series II		1,000.00		855.30		6.31		1,018.40		6.87		1.35

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. Capital Development Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. Capital Development Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. Capital Development Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. Capital Development Fund

Invesco V.I. Core Equity Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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

Invesco V.I. Core Equity Fund delivered a slightly negative return for the fiscal year ended December 31, 2011, and trailed the broad market, as measured by the S&P 500 Index, as well as its style-specific benchmark, the Russell 1000 Index. Top contributors to the Fund’s returns were holdings in the consumer staples and information technology (IT) sectors, while energy was the largest detractor. Additionally, our comparative results versus the Russell 1000 Index were adversely affected by investments in the health care sector, while stock selection in the financials sector helped performance.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	-0.06	%
Series II Shares	-0.29
S&P 500 Index▼(Broad Market Index)	2.09
Russell 1000 Index▼(Style-Specific Index)	1.50
Lipper VUF Large-Cap Core Funds Index▼(Peer Group Index)	-2.10

Source(s): ^▼ Lipper Inc.

How we invest

We manage your Fund with the objective of achieving long-run realized investor returns exceeding those of the passive benchmarks across a full market cycle, which we define as market trough to market trough, or peak-to-peak. As fund managers, we believe investors need a reason to stick with the Fund for long periods of time in order to realize these returns, and believe the best way we can encourage this behavior is by delivering a smoother (less volatile) investor experience – especially in turbulent, down-trending markets. The portfolio we construct is intended to provide attractive participation during positive-trending equity markets, but with a greater emphasis on downside protection during more turbulent, down-trending markets. We position the Fund to act as a “conservative cornerstone” – a stable foundational component within a well-diversified portfolio of assets.

     The Fund’s portfolio is composed of what we call core stocks. A core stock

encompasses elements of growth (revenues, profits, economic value) and value (both absolute and comparative measures). Along this growth-value continuum, we seek to identify and invest in areas of temporary disconnection between market perception and the view our research uncovers.

     To build a portfolio of core stocks, we conduct thorough fundamental research of businesses to gain a deeper understanding of companies’ prospects, growth potential and return on invested capital (ROIC) characteristics. The analytical process we use to identify potential investments comprises three phases: financial, business and valuation.

     Financial analysis provides insights into ROIC (a key indicator of business quality) and historical capital allocation (a key indicator of management quality). Business analysis evaluates the competitive landscape and any structural or cyclical business opportunities or threats and allows us to identify key revenue, profit

and return drivers of the company. Both financial and business analyses serve as a basis to construct valuation models that help us assess a company’s intrinsic worth. Finally, our valuation analysis employs 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

The fiscal year began with equity markets fueled on the second round of “quantitative easing” by the U.S. Federal Reserve, and markets rose through the first quarter of 2011. Thereafter, volatility drastically increased due to civil unrest in Egypt and Libya, and the devastating earthquake and tsunami in Japan. Corporate earnings were largely positive, but often overshadowed by investor concerns about continuing high unemployment, lack of consumer spending and soft housing data. At the same time, the sovereign debt crisis intensified in the eurozone region, and growth in developed economies decelerated, weighing on investor sentiment and prompting fears of a global recession. Despite occasional signs of sustained but muted growth, these macroeconomic factors continued to weigh on markets through the end of the reporting period.

     In this environment, most major U.S. equity indexes delivered underwhelming results for the fiscal year. The Dow Jones Industrial Average and S&P 500 Index achieved single-digit gains, but the NASDAQ was negative for the period. These somewhat tepid results masked a great deal of volatility in 2011. We were active managers throughout the year, taking profits into the market’s strength

Portfolio Composition
By sector

Information Technology	18.8	%
Financials	14.4
Health Care	12.6
Energy	12.2
Industrials	11.3
Consumer Discretionary	6.0
Consumer Staples	4.8
Materials	3.4
Utilities	2.4
Telecommunication Services	1.8
Money Market Funds Plus
Other Assets Less Liabilities	12.3

Top 10 Equity Holdings*

1.	Progressive Corp. (The)	3.3	%
2.	Cisco Systems, Inc.	3.1
3.	Kroger Co. (The)	2.9
4.	Microsoft Corp.	2.9
5.	American Express Co.	2.6
6.	Symantec Corp.	2.6
7.	Berkshire Hathaway Inc.- Class A	2.6
8.	Macy’s, Inc.	2.5
9.	General Electric Co.	2.3
10.	QUALCOMM, Inc.	2.2

Total Net Assets	$1.1 billion
Total Number of Holdings*		74

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

in the first half and using weakness in the third quarter to invest in attractively valued core stocks.

     A strong holding in which we eliminated our position during the reporting period was Motorola Mobility, the largest contributor to Fund performance for the year. The company is a spin-off of parent company Motorola Solutions (formerly Motorola), focused primarily on the handset, home DVR and cable equipment businesses. In August, Google (not a Fund holding) announced plans to acquire Motorola Mobility at a premium for $12.5 billion in cash or $40 per share.

     Another strong contributor to Fund performance was Macy’s. The department store operator undertook numerous restructuring initiatives in recent years, including consolidating key back-office functions, such as buying, design and supply chain management, into a national structure. These efforts, along with better inventory management, have begun to improve the company’s business performance and margins. Macy’s earnings beat expectations in recent months as fundamentals continued to improve across the board, including strong sales growth, particularly from their online division, and a very strong 2011 holiday sales season. Based on its improving earnings outlook, the company doubled its quarterly dividend to 10 cents per share earlier in the year. These improvements are largely in line with our original expectations for the company.

     Oil services firm Weatherford International was a new investment in 2011, and was the largest detractor from Fund performance. The company faced a number of headline issues early in the year that negatively affected the stock’s price, including a restatement of its financial results due to improper income tax reporting. We invested in March as the company’s valuation reflected an attractive level; however, the company, along with peer firms, faced additional pressures through the summer due to fears of a global economic downturn and its potential effect on energy demand. Our view is that Weatherford International’s valuation reached a point where investors are now being appropriately compensated for the aforementioned issues. Overall, we believe the company has room to improve its margins and that oil equipment and service firms will continue to benefit from increased oilfield capital spending and the increased need for more sophisticated extraction technologies.

     Legg Mason also detracted from results during the reporting period. The asset management firm has been under pressure since the height of the financial crisis, as fear about its subprime-related exposures in its money market division caused a significant drop in the company’s shares. Since then, Legg Mason’s total assets under management have declined as a result of steady fixed income outflows, and shares have not recovered meaningfully. However, the company has embarked on a restructuring program aimed at reducing costs, and in our view, Legg Mason’s valuation has reached a point where its diversified asset mix, solid competitive positioning, and strong brands are underappreciated by the market.

     Over the fiscal year, our cash weighting fluctuated as market choppiness allowed us to buy on weakness and sell into strength. Markets rallied in the first half of the reporting period, providing us an opportunity to take profits. However, as market volatility increased over the summer, we used the opportunity to purchase shares in quality companies leveraged to areas of economic growth globally. During the fiscal year we increased our exposure to the consumer discretionary, energy, IT and materials sectors, and reduced our exposure to the consumer staples, industrials and health care sectors. As a result of our buys and sells, our cash position increased slightly as compared to the prior fiscal year end, and it stood at approximately 12% at the end of the reporting period.

     Maintaining a conservative approach is an enduring part of our investment strategy. Amid the market’s volatility, we sought judicious long-term investments for the portfolio. At the end of the fiscal year, the Fund was positioned with more or less of a “barbell” approach, balancing our more pro-cyclical holdings in the energy and IT sectors with our health care holdings, which are typically more defensive in nature.

     Regardless of market conditions, our goal for Invesco V.I. Core Equity Fund remains the same: to serve as a conservative cornerstone for your investment portfolio. We seek to provide attractive upside participation with strong potential downside protection, so that over a full market cycle the Fund delivers solid investment results with the potential for reduced risk and a smoother investor experience. As always, we would like to thank you for your continued investment in Invesco V.I. Core Equity Fund.

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 a B.A. 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.

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.

Invesco V.I. Core Equity Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class(es)
Fund and index data from 12/31/01*

1

Source: Lipper Inc.

*

During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

Average Annual Total Returns
As of 12/31/11

Series I Shares
Inception (5/2/94)	7.18	%
10 Years	4.09
5 Years	1.19
1 Year	-0.06
Series II Shares
Inception (10/24/01)	4.40	%
10 Years	3.83
5 Years	0.94
1 Year	-0.29

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 0.89% and 1.14%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     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.

n	Unless otherwise stated, information presented in this report is as of December 31, 2011, 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

Cash/cash equivalents risk. Holding cash or cash equivalents may negatively affect performance.

     Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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.

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

     Market risk. 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^® 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 Dow Jones Industrial Average is a price-weighted index of the 30 largest, most widely held stocks traded on the New York Stock Exchange.

     The NASDAQ Composite Index (price-only) is a broad-based capitalization-weighted index of all NASDAQ National Market and Small Cap stocks.

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

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

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, 2011

	Shares		Value
Common Stocks & Other Equity Interests–87.67%
Aerospace & Defense–0.27%
Xylem, Inc.		121,304	$	3,116,300
Air Freight & Logistics–0.91%
United Parcel Service, Inc.–Class B		142,078		10,398,689
Application Software–1.73%
Adobe Systems Inc.(b)		699,717		19,781,000
Asset Management & Custody Banks–2.77%
Legg Mason, Inc.		557,649		13,411,458
Northern Trust Corp.		460,721		18,272,195
				31,683,653
Auto Parts & Equipment–0.26%
Johnson Controls, Inc.		93,776		2,931,438
Automobile Manufacturers–0.21%
General Motors Co.(b)		117,629		2,384,340
Biotechnology–1.41%
Gilead Sciences, Inc.(b)		394,153		16,132,682
Communications Equipment–5.92%
Cisco Systems, Inc.		1,929,267		34,881,147
QUALCOMM, Inc.		457,547		25,027,821
Telefonaktiebolaget LM Ericsson–ADR (Sweden)		755,907		7,657,338
				67,566,306
Computer & Electronics Retail–0.72%
Best Buy Co., Inc.		349,750		8,173,657
Computer Hardware–0.34%
Hewlett-Packard Co.		152,497		3,928,323
Construction Materials–0.93%
CRH PLC (Ireland)		535,485		10,645,682
Consumer Finance–2.62%
American Express Co.		633,849		29,898,657
Department Stores–2.46%
Macy’s, Inc.		874,591		28,144,338
Diversified Banks–1.50%
U.S. Bancorp		631,543		17,083,238
Drug Retail–0.88%
CVS Caremark Corp.		247,203		10,080,938
Electric Utilities–2.38%
Edison International		207,747		8,600,726
Exelon Corp.		428,779		18,596,145
				27,196,871
Electrical Components & Equipment–0.75%
Emerson Electric Co.		182,689		8,511,481
Electronic Manufacturing Services–1.42%
TE Connectivity Ltd.		527,911		16,264,938
Environmental & Facilities Services–1.30%
Waste Management, Inc.		455,011		14,883,410
Food Retail–2.93%
Kroger Co. (The)		1,382,634		33,487,395
Gold–0.93%
Agnico-Eagle Mines Ltd. (Canada)		165,000		5,992,800
Newcrest Mining Ltd. (Australia)		150,843		4,566,754
				10,559,554
Health Care Equipment–2.05%
Baxter International Inc.		149,682		7,406,265
Covidien PLC (Ireland)		219,399		9,875,149
Medtronic, Inc.		161,023		6,159,130
				23,440,544
Heavy Electrical Equipment–1.98%
ABB Ltd. (Switzerland)(b)		768,361		14,464,036
ABB Ltd.–ADR (Switzerland)(b)		434,314		8,178,132
				22,642,168
Home Improvement Retail–1.36%
Lowe’s Cos., Inc.		611,287		15,514,464
Hypermarkets & Super Centers–0.99%
Wal-Mart Stores, Inc.		188,953		11,291,831
Industrial Conglomerates–3.79%
3M Co.		97,970		8,007,088
General Electric Co.		1,435,649		25,712,473
Koninklijke Philips Electronics N.V. (Netherlands)		455,669		9,549,157
				43,268,718
Industrial Gases–1.54%
Air Products & Chemicals, Inc.		206,853		17,621,807

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

Invesco V.I. Core Equity Fund

	Shares		Value
Industrial Machinery–1.31%
Illinois Tool Works Inc.		178,076	$	8,317,930
Ingersoll-Rand PLC (Ireland)		216,220		6,588,223
				14,906,153
Insurance Brokers–1.37%
Marsh & McLennan Cos., Inc.		493,879		15,616,454
Integrated Oil & Gas–0.55%
Hess Corp.		109,902		6,242,434
Investment Banking & Brokerage–0.36%
Charles Schwab Corp. (The)		361,353		4,068,835
Life Sciences Tools & Services–1.92%
Agilent Technologies, Inc.(b)		460,412		16,082,191
Thermo Fisher Scientific, Inc.(b)		130,605		5,873,307
				21,955,498
Managed Health Care–1.24%
WellPoint, Inc.		214,517		14,211,751
Movies & Entertainment–0.48%
Walt Disney Co. (The)		147,155		5,518,313
Oil & Gas Drilling–0.50%
Transocean Ltd.		148,222		5,690,243
Oil & Gas Equipment & Services–6.30%
Baker Hughes Inc.		393,341		19,132,106
Cameron International Corp.(b)		130,784		6,433,265
National Oilwell Varco Inc.		123,090		8,368,889
Schlumberger Ltd.		125,856		8,597,224
Tenaris S.A.–ADR (Argentina)		251,807		9,362,184
Weatherford International Ltd.(b)		1,369,498		20,049,451
				71,943,119
Oil & Gas Exploration & Production–4.35%
Apache Corp.		205,648		18,627,596
Devon Energy Corp.		247,242		15,329,004
Southwestern Energy Co.(b)		361,819		11,556,499
Talisman Energy Inc. (Canada)		325,000		4,140,655
				49,653,754
Oil & Gas Refining & Marketing–0.46%
Valero Energy Corp.		250,786		5,279,045
Pharmaceuticals–6.01%
Merck & Co., Inc.		136,301		5,138,548
Pfizer Inc.		339,777		7,352,774
Roche Holding AG (Switzerland)		140,272		23,724,988
Sanofi–ADR (France)		208,811		7,629,954
Teva Pharmaceutical Industries Ltd.–ADR (Israel)		615,328		24,834,638
				68,680,902
Property & Casualty Insurance–5.84%
Berkshire Hathaway Inc.–Class A(b)		254		29,147,770
Progressive Corp. (The)		1,924,873		37,554,272
				66,702,042
Railroads–1.01%
Union Pacific Corp.		109,064		11,554,240
Semiconductors–2.99%
Analog Devices, Inc.		350,588		12,544,039
Intel Corp.		268,283		6,505,863
Taiwan Semiconductor Manufacturing Co. Ltd. (Taiwan)		6,047,823		15,140,030
				34,189,932
Specialty Stores–0.48%
Staples, Inc.		394,128		5,474,438
Systems Software–6.36%
CA, Inc.		477,138		9,645,345
Microsoft Corp.		1,283,715		33,325,241
Symantec Corp.(b)		1,898,290		29,708,239
				72,678,825
Wireless Telecommunication Services–1.79%
Vodafone Group PLC (United Kingdom)		7,359,060		20,451,068
Total Common Stocks & Other Equity Interests (Cost $911,257,858)				1,001,449,468
Money Market Funds–12.27%
Liquid Assets Portfolio–Institutional Class(c)		70,092,432		70,092,432
Premier Portfolio–Institutional Class(c)		70,092,432		70,092,432
Total Money Market Funds (Cost $140,184,864)				140,184,864
TOTAL INVESTMENTS–99.94% (Cost $1,051,442,722)				1,141,634,332
OTHER ASSETS LESS LIABILITIES–0.06%				668,986
NET ASSETS–100.00%			$	1,142,303,318

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. Core Equity Fund

Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $911,257,858)	$	1,001,449,468
Investments in affiliated money market funds, at value and cost		140,184,864
Total investments, at value (Cost $1,051,442,722)		1,141,634,332
Foreign currencies, at value (Cost $540,096)		516,655
Receivable for:
Investments sold		279,301
Fund shares sold		182,392
Dividends		2,477,350
Investment for trustee deferred compensation and retirement plans		138,320
Other assets		191
Total assets		1,145,228,541
Liabilities:
Payable for:
Investments purchased		972,124
Fund shares reacquired		763,730
Accrued fees to affiliates		714,651
Accrued other operating expenses		36,213
Trustee deferred compensation and retirement plans		438,505
Total liabilities		2,925,223
Net assets applicable to shares outstanding	$	1,142,303,318
Net assets consist of:
Shares of beneficial interest	$	1,187,727,534
Undistributed net investment income		10,643,071
Undistributed net realized gain (loss)		(146,216,446	)
Unrealized appreciation		90,149,159
	$	1,142,303,318
Net Assets:
Series I	$	1,091,171,281
Series II	$	51,132,037
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		40,832,619
Series II		1,928,519
Series I:
Net asset value per share	$	26.72
Series II:
Net asset value per share	$	26.51

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $479,718)	$	21,743,674
Dividends from affiliated money market funds (includes securities lending income of $46,281)		191,167
Interest		193,282
Total investment income		22,128,123
Expenses:
Advisory fees		7,791,172
Administrative services fees		3,331,528
Custodian fees		49,177
Distribution fees — Series II		96,299
Transfer agent fees		43,976
Trustees’ and officers’ fees and benefits		74,783
Other		60,718
Total expenses		11,447,653
Less: Fees waived		(208,222	)
Net expenses		11,239,431
Net investment income		10,888,692
Realized and unrealized gain (loss) from:
Net realized gain from:
Investment securities (includes net gains (losses) from securities sold to affiliates of $(1,439,884))		67,134,566
Foreign currencies		174,698
Foreign currency contracts		4,321,151
Option contracts written		51,915
		71,682,330
Change in net unrealized appreciation (depreciation) of:
Investment securities		(72,998,261	)
Foreign currencies		(100,992	)
Foreign currency contracts		50,646
		(73,048,607	)
Net realized and unrealized gain (loss)		(1,366,277	)
Net increase in net assets resulting from operations	$	9,522,415

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, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	10,888,692		$	12,009,590
Net realized gain		71,682,330			45,174,795
Change in net unrealized appreciation (depreciation)		(73,048,607	)		65,458,831
Net increase in net assets resulting from operations		9,522,415			122,643,216
Distributions to shareholders from net investment income:
Series I		(11,312,225	)		(12,902,647	)
Series II		(326,851	)		(280,002	)
Total distributions from net investment income		(11,639,076	)		(13,182,649	)
Share transactions–net:
Series I		(252,642,206	)		(217,887,519	)
Series II		16,379,401			(1,987,933	)
Net increase (decrease) in net assets resulting from share transactions		(236,262,805	)		(219,875,452	)
Net increase (decrease) in net assets		(238,379,466	)		(110,414,885	)
Net assets:
Beginning of year		1,380,682,784			1,491,097,669
End of year (includes undistributed net investment income of $10,643,071 and $11,218,757, respectively)	$	1,142,303,318		$	1,380,682,784

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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

Invesco V.I. Core Equity Fund

	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 affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
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.
L.	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.
M.	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 V.I. 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 Daily 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide 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, 2013, 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 items or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2013. 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, 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 (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $208,222.

  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, 2011, Invesco was paid $303,870 for accounting and fund administrative services and reimbursed $3,027,658 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, Invesco Ltd., 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. 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, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	1,108,360,187	$	33,274,145	$	—	$	1,141,634,332

NOTE 4—Derivative Investments

Effect of Derivative Instruments for the year ended December 31, 2011

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*		Options*
Realized Gain
Currency risk	$	4,321,151	$	—
Equity risk		—		51,915
Change in Unrealized Appreciation
Currency risk		50,646		—
Equity risk		—		—
Total	$	4,371,797	$	51,915

*  The average notional value of foreign currency contracts and options outstanding during the period was $3,751,825 and $4,326, respectively.

Transactions During the Period
	Call Option Contracts
	Number of			Premiums
	Contracts			Received
Beginning of period		—		$	—
Written		1,889			51,915
Expired		(1,889	)		(51,915	)
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, 2011, the Fund engaged in securities sales of $8,391,853, which resulted in net realized gains (losses) of $(1,439,884).

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, 2011, the Fund paid legal fees of $2,806 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010:

	2011		2010
Ordinary income	$	11,639,076	$	13,182,649

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	11,076,114
Net unrealized appreciation — investments		83,766,858
Net unrealized appreciation (depreciation) — other investments		(42,451	)
Temporary book/tax differences		(433,043	)
Capital loss carryforward		(139,791,694	)
Shares of beneficial interest		1,187,727,534
Total net assets	$	1,142,303,318

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund utilized $70,495,881 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, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term		Long-Term		Total
December 31, 2017	$	139,791,694	$	—	$	139,791,694

*  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.

Invesco V.I. Core Equity 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, 2011 was $404,498,870 and $671,079,638, 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	$	137,253,589
Aggregate unrealized (depreciation) of investment securities		(53,486,731	)
Net unrealized appreciation of investment securities	$	83,766,858
Cost of investments for tax purposes is $1,057,867,474.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions on December 31, 2011, undistributed net investment income increased by $174,698 and undistributed net realized gain (loss) decreased by $174,698. This reclassification had no effect on the net assets of the Fund.

NOTE 11—Share Information

	Summary of Share Activity
	Years ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		1,178,162		$	31,786,139			1,698,343		$	42,098,514
Series II		1,071,003			28,747,134			351,173			8,756,793
Issued as reinvestment of dividends:
Series I		459,287			11,312,225			519,430			12,902,647
Series II		13,368			326,851			11,350			280,003
Reacquired:
Series I		(10,589,116	)		(295,740,570	)		(10,899,313	)		(272,888,680	)
Series II		(461,543	)		(12,694,584	)		(441,967	)		(11,024,729	)
Net increase (decrease) in share activity		(8,328,839	)	$	(236,262,805	)		(8,760,984	)	$	(219,875,452	)

^(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. 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 Fund 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 (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 12/31/11	$	27.03	$	0.24	$	(0.28	)	$	(0.04	)	$	(0.27	)	$	26.72		(0.06	)%	$	1,091,171		0.87	%(d)		0.89	%(d)		0.86	%(d)		35	%
Year ended 12/31/10		24.92		0.22		2.14			2.36			(0.25	)		27.03		9.56			1,345,658		0.87			0.89			0.87			47
Year ended 12/31/09		19.75		0.19		5.39			5.58			(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	)		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	)		29.11		8.12			2,298,007		0.87			0.88			1.44			45
Series II
Year ended 12/31/11		26.82		0.17		(0.27	)		(0.10	)		(0.21	)		26.51		(0.29	)		51,132		1.12	(d)		1.14	(d)		0.61	(d)		35
Year ended 12/31/10		24.75		0.15		2.12			2.27			(0.20	)		26.82		9.25			35,025		1.12			1.14			0.62			47
Year ended 12/31/09		19.62		0.14		5.34			5.48			(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	)		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	)		28.88		7.88			34,772		1.12			1.13			1.19			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 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 $1,239,176 and $38,520 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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	930.20	$	4.28	$	1,020.77	$	4.48		0.88	%
Series II		1,000.00		928.80		5.49		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, 2011 through December 31, 2011, 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, 2011:

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. 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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. Core Equity Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. Core Equity Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. Core Equity Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. Core Equity Fund

Invesco V.I. Diversified Income Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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, 2011, Invesco V.I. Diversified Income Fund underperformed its style-specific index. Security selection in the financials sector was a significant reason for the Fund’s underperformance relative to its style-specific index.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	7.02	%
Series II Shares	6.72
Barclays Capital U.S. Aggregate Index▼ (Broad Market Index)	7.84
Barclays Capital U.S. Credit Index▼ (Style-Specific Index)	8.35
Lipper VUF Corporate Debt BBB-Rated Funds Index▼ (Peer Group Index)	7.34

Source(s): ^▼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. The Fund may invest in derivative instruments such as futures contracts and swap agreements, including, but not limited to credit default swaps. It also may 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. Their 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.

   Our 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.
n	The Fund’s general liquidity needs.

Market conditions and your Fund

Global financial markets were unsettled and volatile during 2011 as investors assessed and reacted to the economic implications of several global events, including the Japanese earthquake and tsunami, the U.S. debt ceiling debate and a reinvigorated eurozone sovereign debt

crisis. The year began with U.S. interest rates drifting without much direction as these global developments unfolded. The U.S. economy showed signs of faltering, and there was little consensus regarding the threat of U.S. inflation. However, starting in the second quarter, anxiety linked to the aforementioned events and related concerns about global financial instability began dominating headlines and investors’ psyche, leading to periods of extreme risk aversion, wider credit spreads and high demand for the perceived safe haven of U.S. government bonds. By the end of the year, U.S. interest rates were pushed to near-historic lows, in spite of Standard & Poor’s credit rating downgrade of long-term U.S. debt in the third quarter.

     U.S. Treasury yields for maturities of between two and 30 years ended the year lower than at the start of the year, generating strong positive 12-month returns across government bond sectors. With inflation expectations held in check, long-term bonds outperformed short and intermediate maturities, as investors were willing to extend out on the yield curve for incrementally higher returns. The broad 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, 2011. While U.S. credit spreads widened to reflect heightened systemic risks, the significant decline in rates across the yield curve created gains across most domestic bond market sectors for the year.

     With this economic and market environment as a backdrop, the Fund generated positive returns for the reporting period but underperformed its style-specific benchmark.

     Several sector choices had notable, but largely offsetting, influences on Fund

Portfolio Composition

By industry, based on total investments

Other Diversified Financial Services	8.9	%
U.S. Treasury Notes	7.0
Diversified Banks	6.2
Investment Banking & Brokerage	5.3
U.S. Treasury Bonds	5.2
Other Industries, Each With
Less Than 3.0% of Total Investments	67.4

Top 10 Fixed Income Issuers*

1.	U.S. Treasury	12.2	%
2.	Citigroup Inc.	2.2
3.	Bank of America Corp.	1.9
4.	Hutchison Whampoa International Ltd.	1.8
5.	COX Communications Inc.	1.7
6.	DIRECTV Holdings LLC/DIRECTV Financing Co., Inc.	1.6
7.	Morgan Stanley	1.6
8.	Goldman Sachs Group, Inc. (The)	1.4
9.	JM Smucker Co. (The)	1.2
10.	Entertainment Properties Trust	1.2

Total Net Assets	$22.6 million
Total Number of Holdings*		425

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

*Excludes U.S. Treasury Bills

Invesco V.I. Diversified Income Fund

performance. Early in the year, robust outperformance was generated by the Fund’s general overweight exposure to the investment grade financials, high yield and emerging market sectors. However, as credit market volatility increased, our sustained overweight position in financials, along with our underweight positions in the better-performing consumer staples, utilities and energy sectors, offset the strong start to the year.

     As the year progressed, we lowered the Fund’s overall credit risk by increasing our exposure to U.S. government securities, which proved to be a beneficial strategy as investor pessimism grew. Another strategy we employed to manage overall credit risk during the volatile summer entailed buying credit protection via credit default swap indexes (CDX). We implemented credit risk management using CDX in July 2011 for approximately 2% of the portfolio’s market value; this helped diminish the negative effect of widening credit spreads during July and August.

     Security selection aided performance during the first three months of 2011, mainly through our focus on lower quality investment grade bonds. However, as the credit markets became more erratic, the poor relative performance of our lower quality holdings, some domestic and European financials and some basic industry/capital goods and transportation credits, became a significant drag on Fund performance.

     The Fund also uses 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 longer portfolio duration tending to be more sensitive to interest rate changes than the benchmark. Duration and yield curve positions had a modest negative effect on Fund performance for the year. In addition, U.S. Treasury futures were an important investment tool in the management of our targeted portfolio duration.

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

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. with a concentration in finance from the Dupree School of Management at the Georgia Institute of Technology.

Peter Ehret
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Diversified Income Fund. He joined Invesco in 2001.

Mr. Ehret 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(es)

Fund and index data from 12/31/01*

1 Source: Lipper Inc.

* During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

     Past performance cannot guarantee comparable future results.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (5/5/93)			4.23	%
	10	Years	3.53
	5	Years	2.32
	1	Year	7.02
Series II Shares
	10	Years	3.27	%
	5	Years	2.07
	1	Year	6.72

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 1.36% and 1.61%, 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 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, 2013. 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, 2011, 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. 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.

     Derivatives risk. 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. A 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.

     Developing markets securities risk. 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.

     Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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.

     High yield bond (junk bond) risk. 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.

     Interest rate risk. 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 risk. Leverage exists when the Fund purchases or sells an instrument or enters into a transaction without investing cash in an amount equal to the full economic exposure of the instrument or transaction and the Fund could lose more than it invested. Leverage created from borrowing or certain types of transactions or instruments, including derivatives, may impair the Fund’s liquidity, cause it to liquidate positions at an unfavorable time, increase volatility or otherwise not achieve its intended objective.
     Management risk. The investment techniques and risk analysis used by the Fund’s portfolio managers may not produce the desired results.

     Market risk. 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.
     Mortgage- and asset-backed securities risk. 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. Faster prepayments often happen when interest rates are falling. As a result, the Fund may reinvest these early payments at lower interest rates, thereby reducing the Fund’s income. Conversely, when interest rates rise, prepayments may happen more slowly, causing the security to lengthen in duration. Longer duration securities tend to be more volatile. Securities may be prepaid at a price less than the original purchase value. An unexpectedly high rate of defaults on the mortgages held by a mortgage pool may adversely affect the value of mortgage-backed securities and could result in losses to the Fund. The risk of such defaults is generally higher in the case of mortgage pools that include subprime mortgages. Subprime mortgages refer to loans made to borrowers with weakened credit histories or with lower capacity to make timely payments on their mortgages.

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, 2011

	Principal
	Amount		Value
U.S. Dollar Denominated Bonds and Notes–83.34%
Aerospace & Defense–0.20%
BE Aerospace, Inc., Sr. Unsec. Notes, 6.88%, 10/01/20	$	2,000	$	2,195
Bombardier Inc. (Canada), Sr. Unsec. Notes, 7.75%, 03/15/20(b)		15,000		16,425
Huntington Ingalls Industries Inc., Sr. Unsec. Gtd. Notes, 6.88%, 03/15/18(b)		5,000		4,937
7.13%, 03/15/21(b)		10,000		9,875
Spirit Aerosystems Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 12/15/20		10,000		10,475
Triumph Group, Inc., Sr. Unsec. Gtd. Sub. Global Notes, 8.00%, 11/15/17		2,000		2,150
				46,057
Agricultural Products–0.16%
Corn Products International, Inc., Sr. Unsec. Notes, 6.63%, 04/15/37		30,000		35,791
Airlines–2.59%
American Airlines Inc., Sr. Sec. Gtd. Notes, 7.50%, 03/15/16(b)(c)		12,000		8,640
American Airlines Pass Through Trust, Series 2009-1A, Sec. Pass Through Ctfs., 10.38%, 07/02/19		42,238		45,036
Series 2011-1, Class B, Sec. Gtd. Pass Through Ctfs., 7.00%, 01/31/18(b)		84,439		75,151
Continental Airlines Pass Through Trust, Series 2007-1, Class C, Sec. Sub. Global Pass Through Ctfs., 7.34%, 04/19/14		4,923		4,874
Series 2009-1, Sec. Pass Through Ctfs., 9.00%, 07/08/16		191,533		211,165
Series 2009-2, Class B, Sec. Global Pass Through Ctfs., 9.25%, 05/10/17		12,573		12,978
Series 2010-1, Class B, Sec. Pass Through Ctfs., 6.00%, 01/12/19		15,000		14,034
Delta Air Lines Pass Through Trust, Series 2002-1, Class C, Sec. Pass Through Ctfs., 7.78%, 01/02/12		460		460
Series 2009-1, Class A, Sr. Sec. Pass Through Ctfs., 7.75%, 12/17/19		39,476		43,078
Series 2010-1, Class B, Sec. Pass Through Ctfs., 6.38%, 01/02/16(b)		5,000		4,650
Series 2010-2, Class A, Sec. Pass Through Ctfs., 4.95%, 05/23/19		57,193		58,373
Series 2010-2, Class B, Sec. Pass Through Ctfs., 6.75%, 11/23/15(b)		5,000		4,650
Series 2011-1, Class A, Sec. Pass Through Ctfs., 5.30%, 04/15/19		15,000		15,497
Delta Air Lines, Inc., Sec. Notes, 12.25%, 03/15/15(b)		5,000		5,300
Sr. Sec. Notes, 9.50%, 09/15/14(b)		8,000		8,260
UAL Pass Through Trust, Series 2009-1, Sr. Sec. Gtd. Global Pass Through Ctfs., 10.40%, 11/01/16		38,393		42,712
Series 2009-2A, Sec. Gtd. Global Pass Through Ctfs., 9.75%, 01/15/17		26,680		29,548
				584,406
Alternative Carriers–0.17%
Cogent Communications Group, Inc., Sr. Sec. Gtd. Notes, 8.38%, 02/15/18(b)		10,000		10,325
Level 3 Communications Inc., Sr. Unsec. Global Notes, 11.88%, 02/01/19		10,000		10,675
Level 3 Financing Inc., Sr. Unsec. Gtd. Global Notes, 9.25%, 11/01/14		6,000		6,135
9.38%, 04/01/19		10,000		10,450
				37,585
Aluminum–0.04%
Century Aluminum Co., Sr. Sec. Gtd. Notes, 8.00%, 05/15/14		10,000		9,956
Apparel Retail–0.31%
Express LLC/Express Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.75%, 03/01/18		7,000		7,648
Gap, Inc. (The), Sr. Unsec. Notes, 5.95%, 04/12/21		42,000		40,162
J. Crew Group, Inc., Sr. Unsec. Gtd. Global Notes, 8.13%, 03/01/19		10,000		9,575
Limited Brands Inc., Sr. Unsec. Gtd. Global Notes, 8.50%, 06/15/19		10,000		11,800
				69,185
Apparel, Accessories & Luxury Goods–0.11%
Hanesbrands Inc., Sr. Unsec. Gtd. Global Notes, 6.38%, 12/15/20		10,000		10,225
Jones Group/Appreal Group Holdings/Apparel Group USA/Footwear Accessories Retail, Sr. Unsec. Notes, 6.88%, 03/15/19		15,000		13,575
				23,800
Asset Management & Custody Banks–0.07%
DJO Finance LLC/Corp., Sr. Unsec. Gtd. Global Notes, 7.75%, 04/15/18		2,000		1,530
Sr. Unsec. Gtd. Sub. Global Notes, 9.75%, 10/15/17		10,000		7,800
First Data Corp., Sr. Sec. Gtd. Notes, 7.38%, 06/15/19(b)		7,000		6,615
				15,945

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

Invesco V.I. Diversified Income Fund

	Principal
	Amount		Value
Auto Parts & Equipment–0.21%
Allison Transmission Inc., Sr. Unsec. Gtd Notes, 7.13%, 05/15/19(b)	$	12,000	$	11,820
American Axle & Manufacturing, Inc., Sr. Unsec. Gtd. Notes, 7.75%, 11/15/19		10,000		9,850
Dana Holding Corp., Sr. Unsec. Notes, 6.75%, 02/15/21		9,000		9,247
Tenneco Inc., Sr. Unsec. Gtd. Global Notes, 6.88%, 12/15/20		15,000		15,525
				46,442
Automobile Manufacturers–0.04%
Ford Motor Co., Sr. Unsec. Global Notes, 7.45%, 07/16/31		7,000		8,400
Automotive Retail–0.49%
Advance Auto Parts, Inc., Sr. Unsec. Gtd. Notes, 5.75%, 05/01/20		100,000		110,107
Biotechnology–0.81%
Gilead Sciences, Inc., Sr. Unsec. Notes, 5.65%, 12/01/41		160,000		177,658
STHI Holding Corp., Sec. Gtd. Notes, 8.00%, 03/15/18(b)		5,000		5,162
				182,820
Brewers–1.02%
Anheuser-Busch InBev Worldwide Inc., Sr. Unsec. Gtd. Global Notes, 2.88%, 02/15/16		125,000		132,507
4.13%, 01/15/15		90,000		97,260
				229,767
Broadcasting–1.88%
Allbritton Communications Co., Sr. Unsec. Global Notes, 8.00%, 05/15/18		20,000		20,000
Clear Channel Communications, Inc., Sr. Sec. Gtd. Global Notes, 9.00%, 03/01/21		12,000		10,140
COX Communications Inc., Sr. Unsec. Global Notes, 5.45%, 12/15/14		95,000		105,707
Sr. Unsec. Notes,
8.38%, 03/01/39(b)		75,000		100,094
9.38%, 01/15/19(b)		140,000		188,867
				424,808
Building Products–0.50%
Associated Materials LLC, Sr. Sec. Gtd. Global Notes, 9.13%, 11/01/17		15,000		13,312
Building Materials Corp. of America, Sr. Sec. Gtd. Notes, 7.50%,��03/15/20(b)		25,000		27,000
Gibraltar Industries Inc., Series B, Sr. Unsec. Gtd. Sub. Global Notes, 8.00%, 12/01/15		15,000		15,075
Nortek Inc., Sr. Unsec. Gtd. Notes, 8.50%, 04/15/21(b)		32,000		27,240
Roofing Supply Group LLC/Roofing Supply Finance Inc., Sr. Sec. Notes, 8.63%, 12/01/17(b)		14,000		14,315
USG Corp., Sr. Unsec. Gtd. Notes, 9.75%, 08/01/14(b)		15,000		15,300
				112,242
Cable & Satellite–2.49%
DIRECTV Holdings LLC/ DIRECTV Financing Co., Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 05/15/16		350,000		371,219
EH Holding Corp., Sr. Unsec. Gtd. Notes, 7.63%, 06/15/21(b)		5,000		5,269
NBC Universal Media LLC, Sr. Unsec. Global Notes,
2.10%, 04/01/14		35,000		35,479
5.95%, 04/01/41		35,000		41,838
Time Warner Cable, Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 07/01/18		55,000		65,400
Sr. Unsec. Gtd. Notes, 5.00%, 02/01/20		38,000		41,748
				560,953
Casinos & Gaming–0.47%
Ameristar Casinos Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 04/15/21		12,000		12,420
Caesars Entertainment Operating Co. Inc., Sec. Gtd. Global Notes, 12.75%, 04/15/18		10,000		8,000
CityCenter Holdings LLC/CityCenter Finance Corp., Sr. Sec. Gtd. PIK Notes, 10.75%, 01/15/17(b)		7,277		7,532
MGM Resorts International, Sr. Unsec. Gtd. Global Notes, 6.63%, 07/15/15		25,000		23,969
Pinnacle Entertainment Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 08/01/17		5,000		5,312
Seneca Gaming Corp., Sr. Unsec. Gtd. Notes, 8.25%, 12/01/18(b)		8,000		7,820
Snoqualmie Entertainment Authority, Sr. Sec. Notes, 9.13%, 02/01/15(b)		15,000		14,400
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., Sr. Sec. Gtd. First Mortgage Global Notes, 7.88%, 11/01/17		25,000		27,484
				106,937
Coal & Consumable Fuels–0.11%
CONSOL Energy Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 04/01/20		15,000		16,650
Peabody Energy Corp., Sr. Unsec. Gtd. Notes, 6.00%, 11/15/18(b)		7,000		7,175
				23,825
Communications Equipment–0.06%
Avaya Inc., Sr. Sec. Gtd. Notes, 7.00%, 04/01/19(b)		15,000		14,625
Computer & Electronics Retail–0.04%
Rent-A-Center Inc., Sr. Unsec. Gtd Global Notes, 6.63%, 11/15/20		10,000		10,100

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

Invesco V.I. Diversified Income Fund

	Principal
	Amount		Value
Computer Hardware–0.02%
SunGard Data Systems Inc., Sr. Unsec. Gtd. Global Notes, 7.38%, 11/15/18	$	5,000	$	5,138
Computer Storage & Peripherals–0.05%
Seagate HDD Cayman, Sr. Unsec. Gtd. Notes, 7.75%, 12/15/18(b)		10,000		10,700
Construction & Engineering–0.17%
Dycom Investments Inc., Sr. Unsec. Gtd. Sub. Global Notes, 7.13%, 01/15/21		12,000		12,180
MasTec, Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 02/01/17		3,000		3,131
Tutor Perini Corp., Sr. Unsec. Gtd. Global Notes, 7.63%, 11/01/18		25,000		23,625
				38,936
Construction & Farm Machinery & Heavy Trucks–0.20%
Commercial Vehicle Group, Inc., Sr. Sec. Gtd. Notes, 7.88%, 04/15/19(b)		8,000		7,750
Manitowoc Co. Inc. (The), Sr. Unsec. Gtd. Notes, 8.50%, 11/01/20		5,000		5,250
Navistar International Corp., Sr. Unsec. Gtd. Notes, 8.25%, 11/01/21		5,000		5,325
Titan International Inc., Sr. Sec. Gtd. Global Notes, 7.88%, 10/01/17		25,000		26,125
				44,450
Construction Materials–0.49%
CRH America Inc., Sr. Unsec. Gtd. Notes, 4.13%, 01/15/16		80,000		80,228
Ply Gem Industries Inc., Sr. Sec. Gtd. Global Notes, 8.25%, 02/15/18		15,000		13,144
Texas Industries Inc., Sr. Unsec. Gtd. Global Notes, 9.25%, 08/15/20		20,000		18,000
				111,372
Consumer Finance–0.87%
Ally Financial Inc., Sr. Unsec. Gtd. Global Notes, 8.00%, 11/01/31		40,000		38,700
Ford Motor Credit Co. LLC, Sr. Unsec. Notes, 8.00%, 12/15/16		20,000		22,950
National Money Mart Co. (Canada), Sr. Unsec. Gtd. Global Notes, 10.38%, 12/15/16		25,000		26,813
SLM Corp., Sr. Unsec. Medium-Term Global Notes, 6.25%, 01/25/16		75,000		73,455
Series A, Sr. Unsec. Medium-Term Notes, 5.00%, 10/01/13		35,000		35,172
				197,090
Data Processing & Outsourced Services–0.07%
CoreLogic, Inc., Sr. Unsec. Gtd. Notes, 7.25%, 06/01/21(b)		15,000		14,400
Department Stores–0.05%
Sears Holdings Corp., Sr. Sec. Gtd. Global Notes, 6.63%, 10/15/18		15,000		11,475
Distillers & Vintners–0.74%
Constellation Brands Inc., Sr. Unsec. Gtd. Global Notes, 7.25%, 05/15/17		10,000		10,975
Pernod-Ricard S.A. (France), Sr. Unsec. Notes, 4.45%, 01/15/22(b)		150,000		155,537
				166,512
Diversified Banks–5.70%
Abbey National Treasury Services PLC (United Kingdom), Sr. Unsec. Gtd. Global Notes, 2.88%, 04/25/14		25,000		23,314
ABN Amro Bank N.V. (Netherlands), Sr. Unsec. Notes, 3.00%, 01/31/14(b)		200,000		200,263
Bank of Nova Scotia (Canada), Sr. Unsec. Global Notes, 2.38%, 12/17/13		70,000		71,950
HSBC Bank PLC (United Kingdom), Sr. Unsec. Notes, 4.13%, 08/12/20(b)		235,000		234,893
ING Bank N.V. (Netherlands), Unsec. Sub. Notes, 5.13%, 05/01/15(b)		100,000		93,761
Lloyds TSB Bank PLC (United Kingdom), Sr. Unsec. Gtd. Global Notes, 4.88%, 01/21/16		55,000		53,246
Sr. Unsec. Gtd. Medium-Term Notes, 4.38%, 01/12/15(b)		145,000		139,302
Royal Bank of Scotland PLC (The) (United Kingdom), Sr. Unsec. Gtd. Global Notes, 4.88%, 03/16/15		130,000		124,201
Series 2,
Sr. Unsec. Gtd. Global Notes, 3.40%, 08/23/13		75,000		72,792
Societe Generale S.A. (France), Sr. Unsec. Notes, 2.50%, 01/15/14(b)		130,000		120,170
Standard Chartered PLC (United Kingdom), Sr. Unsec. Notes, 5.50%, 11/18/14(b)		55,000		59,304
VTB Bank OJSC Via VTB Capital S.A. (Luxembourg), Sr. Unsec. Loan Participation Notes, 6.55%, 10/13/20(b)		100,000		93,586
				1,286,782
Diversified Capital Markets–0.94%
Credit Suisse AG (Switzerland), Sub. Global Notes, 5.40%, 01/14/20		115,000		108,059
UBS AG (Switzerland), Sr. Unsec. Medium-Term Global Notes, 5.75%, 04/25/18		100,000		103,817
				211,876
Diversified Chemicals–0.07%
Huntsman International LLC, Sr. Unsec. Gtd. Global Notes, 5.50%, 06/30/16		4,000		3,950
Sr. Unsec. Gtd. Sub. Global Notes, 8.63%, 03/15/21		11,000		11,715
				15,665

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 Metals & Mining–0.17%
Freeport-McMoRan Copper & Gold Inc., Sr. Unsec. Notes, 8.38%, 04/01/17	$	35,000	$	37,056
Midwest Vanadium Pty. Ltd. (Australia), Sr. Sec. Gtd. Mortgage Notes, 11.50%, 02/15/18(b)		3,000		2,206
				39,262
Diversified REIT’s–0.81%
Dexus Diversified Trust/Dexus Office Trust (Australia), Sr. Unsec. Gtd. Notes, 5.60%, 03/15/21(b)		180,000		183,574
Drug Retail–0.78%
CVS Pass Through Trust, Sr. Sec. Gtd. Mortgage Pass Through Ctfs., 5.77%, 01/10/33(b)		171,280		175,600
Electric Utilities–2.82%
DCP Midstream LLC, Sr. Unsec. Notes, 9.70%, 12/01/13(b)		100,000		113,629
9.75%, 03/15/19(b)		55,000		72,812
Enel Finance International N.V. (Luxembourg), Sr. Unsec. Gtd. Notes, 3.88%, 10/07/14(b)		100,000		97,232
LSP Energy L.P./LSP Batesville Funding Corp. Series D, Sr. Sec. Bonds, 8.16%, 07/15/25		25,000		20,750
Ohio Power Co. Series M, Sr. Unsec. Notes, 5.38%, 10/01/21		180,000		206,327
PPL Electric Utilities Corp., Sec. First Mortgage Bonds, 6.25%, 05/15/39		45,000		60,868
Virginia Electric & Power Co., Sr. Unsec. Notes, 5.00%, 06/30/19		55,000		63,561
				635,179
Electrical Components & Equipment–0.14%
Belden Inc., Sr. Gtd. Sub. Global Notes, 9.25%, 06/15/19		25,000		26,812
Polypore International Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 11/15/17		5,000		5,188
				32,000
Environmental & Facilities Services–0.65%
Waste Management, Inc., Sr. Unsec. Gtd. Notes, 4.60%, 03/01/21		70,000		76,393
5.00%, 03/15/14		65,000		69,955
				146,348
Forest Products–0.03%
Millar Western Forest Products Ltd. (Canada), Sr. Unsec. Notes, 8.50%, 04/01/21(b)		10,000		7,725
Gas Utilities–0.13%
Ferrellgas L.P./Ferrellgas Finance Corp., Sr. Unsec. Global Notes, 6.50%, 05/01/21		10,000		8,850
Suburban Propane Partners, L.P./Suburban Energy Finance Corp., Sr. Unsec. Notes, 7.38%, 03/15/20		20,000		20,900
				29,750
Gold–1.77%
Barrick Gold Corp. (Canada), Sr. Unsec. Global Notes, 2.90%, 05/30/16		65,000		67,123
Gold Fields Orogen Holding BVI Ltd. (Mali), Sr. Unsec. Gtd. Notes, 4.88%, 10/07/20(b)		200,000		178,664
Kinross Gold Corp. (Canada), Sr. Unsec. Gtd. Notes, 5.13%, 09/01/21(b)		75,000		74,715
6.88%, 09/01/41(b)		75,000		77,839
				398,341
Health Care Distributors–0.55%
AmerisourceBergen Corp., Sr. Unsec. Gtd. Notes, 3.50%, 11/15/21		120,000		124,246
Health Care Equipment–0.14%
Boston Scientific Corp., Sr. Unsec. Notes, 4.50%, 01/15/15		30,000		31,566
Health Care Facilities–0.31%
HCA, Inc., Sr. Sec. Gtd. Global Notes, 7.88%, 02/15/20		13,000		14,105
HealthSouth Corp., Sr. Unsec. Gtd. Notes, 7.25%, 10/01/18		15,000		14,925
7.75%, 09/15/22		15,000		14,812
Tenet Healthcare Corp., Sr. Unsec. Global Notes, 9.25%, 02/01/15		25,000		26,625
				70,467
Health Care Services–1.70%
Express Scripts, Inc., Sr. Unsec. Gtd. Global Notes, 6.25%, 06/15/14		125,000		136,321
Highmark, Inc., Sr. Unsec. Notes, 4.75%, 05/15/21(b)		40,000		40,983
6.13%, 05/15/41(b)		35,000		38,452
Medco Health Solutions Inc., Sr. Unsec. Notes, 2.75%, 09/15/15		35,000		35,195
Orlando Lutheran Towers Inc., Bonds, 8.00%, 07/01/12(d)(e)		125,000		127,909
Universal Hospital Services Inc., Sec. Gtd. PIK Global Notes, 8.50%, 06/01/15		5,000		5,081
				383,941
Health Care Technology–0.07%
MedAssets Inc., Sr. Unsec. Gtd. Global Notes, 8.00%, 11/15/18		15,000		14,775
Homebuilding–0.20%
Beazer Homes USA Inc., Sr. Unsec. Gtd. Global Notes, 6.88%, 07/15/15		7,000		5,267
8.13%, 06/15/16		15,000		11,175
K. Hovnanian Enterprises Inc., Sr. Sec. Gtd. Global Notes, 10.63%, 10/15/16		24,000		19,200

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

Invesco V.I. Diversified Income Fund

	Principal
	Amount		Value
Homebuilding–(continued)
Lennar Corp., Sr. Unsec. Gtd. Global Notes, 6.95%, 06/01/18	$	9,000	$	8,775
M/I Homes Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 11/15/18		2,000		1,775
				46,192
Home Furnishings–0.04%
American Standard Americas, Sr. Sec. Notes, 10.75%, 01/15/16(b)		15,000		8,925
Hotels, Resorts & Cruise Lines–1.57%
Hyatt Hotels Corp., Sr. Unsec. Notes, 5.75%, 08/15/15(b)		165,000		177,656
Royal Caribbean Cruises Ltd., Sr. Unsec. Global Notes, 7.50%, 10/15/27		10,000		9,825
Wyndham Worldwide Corp., Sr. Unsec. Notes, 7.38%, 03/01/20		55,000		62,734
5.63%, 03/01/21		100,000		103,500
				353,715
Household Products–0.11%
Central Garden & Pet Co., Sr. Gtd. Sub. Notes, 8.25%, 03/01/18		25,000		24,688
Housewares & Specialties–0.02%
American Greetings Corp., Sr. Unsec. Gtd. Notes, 7.38%, 12/01/21		5,000		5,069
Independent Power Producers & Energy Traders–0.14%
AES Corp. (The), Sr. Unsec. Global Notes, 8.00%, 10/15/17		25,000		27,500
Calpine Corp., Sr. Sec. Notes, 7.25%, 10/15/17(b)		5,000		5,225
				32,725
Industrial Conglomerates–1.80%
Hutchison Whampoa International Ltd. (Hong Kong), Sr. Unsec. Gtd. Notes, 7.63%, 04/09/19(b)		130,000		158,847
Unsec. Gtd. Notes, 5.75%, 09/11/19(b)		100,000		111,580
Hutchison Whampoa International Ltd. (Hong Kong), Unsec. Gtd. Sub. Notes, 6.00%(b)(f)		135,000		135,337
				405,764
Industrial Machinery–0.73%
Cleaver-Brooks Inc., Sr. Sec. Notes, 12.25%, 05/01/16(b)		10,000		10,100
Pentair, Inc., Sr. Unsec. Gtd. Notes, 5.00%, 05/15/21		145,000		154,157
				164,257
Industrial REIT’s–0.07%
DuPont Fabros Technology L.P., Sr. Unsec. Gtd. Global Notes, 8.50%, 12/15/17		15,000		16,163
Insurance Brokers–0.59%
Marsh & McLennan Cos. Inc., Sr. Unsec. Notes, 9.25%, 04/15/19		100,000		132,552
Integrated Oil & Gas–0.19%
Petrobras International Finance Co. (Brazil), Sr. Unsec. Gtd. Global Notes, 5.38%, 01/27/21		40,000		42,162
Integrated Telecommunication Services–1.78%
AT&T Inc., Sr. Unsec. Global Notes, 2.50%, 08/15/15		60,000		62,227
2.95%, 05/15/16		35,000		36,772
4.45%, 05/15/21		15,000		16,556
Integra Telecom Holdings Inc., Sr. Sec. Notes, 10.75%, 04/15/16(b)		5,000		4,050
Telefonica Emisiones S.A. Unipersonal (Spain), Sr. Unsec. Gtd. Global Notes, 5.46%, 02/16/21		90,000		86,214
Telemar Norte Leste S.A. (Brazil), Sr. Unsec. Notes, 5.50%, 10/23/20(b)		161,000		159,954
Verizon Communications, Inc., Sr. Unsec. Global Notes, 4.75%, 11/01/41		30,000		32,566
Windstream Corp., Sr. Unsec. Gtd. Notes, 7.50%, 06/01/22(b)		2,000		2,010
				400,349
Internet Retail–0.20%
Expedia Inc., Sr. Unsec. Gtd. Global Notes, 5.95%, 08/15/20		45,000		45,516
Internet Software & Services–0.07%
Equinix Inc., Sr. Unsec. Notes, 8.13%, 03/01/18		15,000		16,575
Investment Banking & Brokerage–5.28%
Cantor Fitzgerald L.P., Bonds, 7.88%, 10/15/19(b)		160,000		160,559
Goldman Sachs Group, Inc. (The), Sr. Unsec. Global Notes, 5.13%, 01/15/15		50,000		51,101
3.70%, 08/01/15		45,000		44,089
3.63%, 02/07/16		30,000		28,995
5.25%, 07/27/21		55,000		53,895
Unsec. Sub. Global Notes, 6.75%, 10/01/37		140,000		131,650
Jefferies Group Inc., Sr. Unsec. Notes, 6.45%, 06/08/27		80,000		66,700
Macquarie Group Ltd. (Australia), Sr. Unsec. Notes, 7.30%, 08/01/14(b)		110,000		116,543
6.00%, 01/14/20(b)		105,000		99,118
Morgan Stanley, Sr. Unsec. Global Notes, 6.00%, 05/13/14		230,000		233,476
Series F, Sr. Unsec. Medium-Term Global Notes, 5.63%, 09/23/19		130,000		120,122

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

Invesco V.I. Diversified Income Fund

	Principal
	Amount		Value
Investment Banking & Brokerage–(continued)
Raymond James Financial, Inc., Sr. Unsec. Notes, 4.25%, 04/15/16	$	35,000	$	35,857
Schwab Capital Trust I, Jr. Unsec. Gtd. Sub. Notes, 7.50%, 11/15/37		50,000		49,937
				1,192,042
Leisure Facilities–0.02%
Speedway Motorsports Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 02/01/19		5,000		5,075
Leisure Products–0.05%
Toys R US-Delaware Inc., Sr. Sec. Gtd. Notes, 7.38%, 09/01/16(b)		12,000		12,180
Life & Health Insurance–2.14%
MetLife Inc., Sr. Unsec. Notes, 6.75%, 06/01/16		55,000		63,558
Nationwide Financial Services, Inc., Sr. Unsec. Notes, 5.38%, 03/25/21(b)		165,000		163,841
Prudential Financial, Inc., Jr. Unsec. Sub. Global Notes, 8.88%, 06/15/38		130,000		148,850
Series D, Sr. Unsec. Medium-Term Notes, 7.38%, 06/15/19		90,000		107,223
				483,472
Life Sciences Tools & Services–0.87%
Life Technologies Corp., Sr. Notes, 6.00%, 03/01/20		120,000		134,412
Patheon Inc. (Canada), Sr. Sec. Gtd. Notes, 8.63%, 04/15/17(b)		25,000		20,250
PerkinElmer, Inc., Sr. Unsec. Notes, 5.00%, 11/15/21		40,000		40,535
				195,197
Managed Health Care–1.81%
Cigna Corp., Sr. Unsec. Global Notes, 2.75%, 11/15/16		60,000		59,981
Cigna Corp., Sr. Unsec. Global Notes, 5.38%, 02/15/42		85,000		85,495
Sr. Unsec. Notes,
4.50%, 03/15/21		45,000		46,275
5.88%, 03/15/41		35,000		37,335
UnitedHealth Group Inc., Sr. Unsec. Notes, 3.88%, 10/15/20		60,000		63,951
5.95%, 02/15/41		60,000		74,116
WellPoint, Inc., Sr. Unsec. Global Notes, 3.70%, 08/15/21		40,000		40,881
				408,034
Mortgage Backed Securities–0.39%
U.S. Bank N.A., Sr. Unsec. Medium-Term Notes, 5.92%, 05/25/12		85,881		87,599
Movies & Entertainment–0.43%
AMC Entertainment Inc., Sr. Unsec. Gtd. Global Notes, 8.75%, 06/01/19		25,000		25,969
NAI Entertainment Holdings LLC, Sr. Sec. Notes, 8.25%, 12/15/17(b)		15,000		15,956
Time Warner, Inc., Sr. Unsec. Gtd. Global Notes, 5.38%, 10/15/41		50,000		54,197
				96,122
Multi-Line Insurance–2.01%
American Financial Group, Inc., Sr. Unsec. Notes, 9.88%, 06/15/19		180,000		211,499
Hartford Financial Services Group Inc., Jr. Unsec. Sub. Deb., 8.13%, 06/15/38		10,000		9,950
Health Care Service Corp., Sr. Unsec. Notes, 4.70%, 01/15/21(b)		55,000		59,726
Liberty Mutual Group Inc., Jr. Unsec. Gtd. Sub. Bonds, (Acquired 03/21/11;
Cost $15,112) 7.80%, 03/15/37(b)		15,000		13,462
Sr. Unsec. Gtd. Notes, 5.00%, 06/01/21(b)		50,000		48,281
Sr. Unsec. Notes, 5.75%, 03/15/14(b)		100,000		104,675
Nationwide Mutual Insurance Co., Unsec. Sub. Notes, 9.38%, 08/15/39(b)		5,000		6,030
				453,623
Office Services & Supplies–0.11%
IKON Office Solutions, Inc., Sr. Unsec. Notes, 6.75%, 12/01/25		25,000		24,438
Oil & Gas Drilling–0.18%
Transocean Inc., Sr. Unsec. Gtd. Global Notes, 4.95%, 11/15/15		40,000		40,813
Oil & Gas Equipment & Services–0.13%
Bristow Group, Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 09/15/17		14,000		14,490
Key Energy Services, Inc., Sr. Unsec. Gtd. Notes, 6.75%, 03/01/21		15,000		15,075
				29,565
Oil & Gas Exploration & Production–2.25%
Anadarko Petroleum Corp., Sr. Unsec. Global Notes, 5.75%, 06/15/14		95,000		102,601
Sr. Unsec. Notes, 7.63%, 03/15/14		15,000		16,714
Chaparral Energy Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 09/01/21		13,000		13,227
Chesapeake Energy Corp., Sr. Unsec. Gtd. Notes, 6.13%, 02/15/21		5,000		5,144
6.63%, 08/15/20		8,000		8,570
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 7.13%, 05/01/17		10,000		10,487
Continental Resources Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 10/01/19		15,000		16,556

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)
EOG Resources, Inc., Sr. Unsec. Notes, 4.10%, 02/01/21	$	45,000	$	49,432
EXCO Resources Inc., Sr. Unsec. Gtd. Notes, 7.50%, 09/15/18		5,000		4,750
Forest Oil Corp., Sr. Unsec. Gtd. Global Notes, 7.25%, 06/15/19		2,000		2,020
McMoRan Exploration Co., Sr. Unsec. Gtd. Notes, 11.88%, 11/15/14		12,000		12,810
Newfield Exploration Co., Sr. Unsec. Sub. Global Notes, 7.13%, 05/15/18		13,000		13,747
Pemex Project Funding Master Trust, Sr. Unsec. Gtd. Global Bonds, 6.63%, 06/15/35		65,000		74,172
Petrobras International Finance Co. (Brazil), Sr. Unsec. Gtd. Global Notes, 6.88%, 01/20/40		45,000		51,672
Petroleos Mexicanos (Mexico), Sr. Unsec. Gtd. Global Notes, 5.50%, 01/21/21		65,000		70,609
Plains Exploration & Production Co., Sr. Unsec. Gtd. Notes, 8.63%, 10/15/19		15,000		16,537
Range Resources Corp., Sr. Unsec. Gtd. Sub. Notes, 5.75%, 06/01/21		10,000		10,775
SM Energy Co., Sr. Unsec. Notes, 6.63%, 02/15/19(b)		10,000		10,350
6.50%, 11/15/21(b)		2,000		2,070
Whiting Petroleum Corp., Sr. Unsec. Gtd. Sub. Notes, 6.50%, 10/01/18		10,000		10,463
WPX Energy Inc., Sr. Unsec. Notes, 6.00%, 01/15/22(b)		5,000		5,138
				507,844
Oil & Gas Refining & Marketing–0.56%
Petronas Capital Ltd. (Malaysia), Unsec. Gtd. Unsub. Notes, 5.25%, 08/12/19(b)		100,000		112,414
United Refining Co., Sr. Sec. Gtd. Global Notes, 10.50%, 02/28/18		15,000		14,100
				126,514
Oil & Gas Storage & Transportation–2.45%
Atlas Pipeline Partners L.P./Atlas Pipeline Finance Corp., Sr. Unsec. Gtd. Notes, 8.75%, 06/15/18(b)		6,000		6,345
Chesapeake Midstream Partners L.P./CHKM Finance Corp., Sr. Unsec. Gtd. Notes, 5.88%, 04/15/21(b)		9,000		9,090
Copano Energy LLC/Copano Energy Finance Corp., Sr. Unsec. Gtd. Notes, 7.13%, 04/01/21		15,000		15,225
Energy Transfer Equity L.P., Sr. Sec. Gtd. Notes, 7.50%, 10/15/20		10,000		10,863
Energy Transfer Partners L.P., Sr. Unsec. Global Notes, 6.05%, 06/01/41		115,000		113,711
Enterprise Products Operating LLC, Sr. Unsec. Gtd. Notes, 6.45%, 09/01/40		70,000		82,145
Inergy L.P./Inergy Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 08/01/21		7,000		7,088
MarkWest Energy Partners L.P./MarkWest Energy Finance Corp., Sr. Unsec. Gtd. Notes, 6.25%, 06/15/22		5,000		5,250
6.50%, 08/15/21		15,000		15,712
Overseas Shipholding Group, Inc., Sr. Unsec. Notes, 8.13%, 03/30/18		25,000		15,312
Regency Energy Partners L.P./Regency Energy Finance Corp., Sr. Unsec. Gtd. Notes, 6.88%, 12/01/18		5,000		5,319
Spectra Energy Capital LLC, Sr. Unsec. Gtd. Notes, 5.65%, 03/01/20		155,000		172,050
Targa Resources Partners L.P./Targa Resouces Partners Finance Corp., Sr. Unsec. Gtd. Notes, 6.88%, 02/01/21(b)		15,000		15,262
Williams Partners L.P., Sr. Unsec. Global Notes, 3.80%, 02/15/15		75,000		78,809
				552,181
Other Diversified Financial Services–8.89%
Bank of America Corp., Sr. Unsec. Global Notes,
3.70%, 09/01/15		25,000		23,352
4.50%, 04/01/15		240,000		232,185
6.50%, 08/01/16		130,000		131,543
Sr. Unsec. Notes, 5.88%, 01/05/21		35,000		33,237
Citigroup Inc., Sr. Unsec. Global Notes,
4.50%, 01/14/22		70,000		67,330
6.01%, 01/15/15		150,000		157,335
Sr. Unsec. Notes, 6.38%, 08/12/14		255,000		267,991
Countrywide Financial Corp., Sr. Unsec. Gtd. Medium-Term Global Notes, 5.80%, 06/07/12		10,000		10,033
ERAC USA Finance LLC, Unsec. Gtd. Notes, 5.80%, 10/15/12(b)		105,000		108,656
Football Trust V, Sec. Pass Through Ctfs., 5.35%, 10/05/20(b)		100,000		111,748
General Electric Capital Corp. Series A, Sr. Unsec. Medium-Term Global Notes, 6.88%, 01/10/39		60,000		71,840
International Lease Finance Corp., Sr. Sec. Notes, 6.50%, 09/01/14(b)		115,000		118,162
Sr. Unsec. Global Notes,
8.63%, 09/15/15		10,000		10,240
8.75%, 03/15/17		27,000		27,928
Sr. Unsec. Notes, 8.25%, 12/15/20		10,000		10,131
JPMorgan Chase & Co., Sr. Unsec. Global Notes,
3.15%, 07/05/16		35,000		35,236
3.45%, 03/01/16		25,000		25,382
4.75%, 05/01/13		15,000		15,691
5.40%, 01/06/42		80,000		82,677
5.60%, 07/15/41		95,000		102,536

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

Invesco V.I. Diversified Income Fund

	Principal
	Amount		Value
Other Diversified Financial Services–(continued)
JPMorgan Chase Capital XXVII, Series AA, Jr. Unsec. Ltd. Gtd. Sub. Notes, 7.00%, 11/01/39	$	160,000	$	161,373
Merrill Lynch & Co. Inc., Series C, Sr. Unsec. Medium-Term Global Notes, 5.45%, 02/05/13		200,000		201,612
Twin Reefs Pass-Through Trust, Sec. Pass Through Ctfs., 1.39%, (Acquired 12/07/04-04/03/06; Cost $130,332)(b)(c)(e)(f)		130,000		—
				2,006,218
Packaged Foods & Meats–1.83%
Del Monte Foods Co., Sr. Unsec. Gtd. Global Notes, 7.63%, 02/15/19		5,000		4,838
JM Smucker Co. (The), Sr. Unsec. Gtd. Global Notes., 3.50%, 10/15/21		265,000		272,067
Kraft Foods Inc., Sr. Unsec. Global Notes,
2.63%, 05/08/13		70,000		71,429
6.50%, 02/09/40		50,000		64,488
				412,822
Paper Packaging–0.04%
Cascades Inc. (Canada), Sr. Unsec. Gtd. Global Notes, 7.88%, 01/15/20		10,000		9,775
Paper Products–0.59%
Boise Cascade LLC, Sr. Unsec. Gtd. Sub. Global Notes, 7.13%, 10/15/14		17,000		16,915
Clearwater Paper Corp., Sr. Unsec. Gtd. Global Notes, 7.13%, 11/01/18		5,000		5,212
International Paper Co., Sr. Unsec. Global Notes, 4.75%, 02/15/22		35,000		37,314
6.00%, 11/15/41		40,000		43,613
Mercer International Inc., Sr. Unsec. Gtd. Global Notes, 9.50%, 12/01/17		10,000		10,275
NewPage Corp., Sr. Sec. Gtd. Global Notes, 11.38%, 12/31/14(c)		7,000		5,198
P.H. Glatfelter Co., Sr. Unsec. Gtd. Global Notes, 7.13%, 05/01/16		15,000		15,544
				134,071
Pharmaceuticals–0.12%
Mylan Inc., Sr. Unsec. Gtd. Notes, 6.00%, 11/15/18(b)		5,000		5,163
NBTY Inc., Sr. Unsec. Gtd. Global Notes, 9.00%, 10/01/18		10,000		11,000
Valeant Pharmaceuticals International (Canada), Sr. Unsec. Gtd. Notes, 6.75%, 10/01/17(b)		10,000		10,000
				26,163
Property & Casualty Insurance–1.00%
CNA Financial Corp., Sr. Unsec. Notes, 7.35%, 11/15/19		160,000		178,591
W.R. Berkley Corp., Sr. Unsec. Notes, 7.38%, 09/15/19		40,000		46,673
				225,264
Railroads–1.01%
Canadian Pacific Railway Co. (Canada), Sr. Unsec. Notes, 4.45%, 03/15/23		20,000		20,254
CSX Corp., Sr. Unsec. Notes, 5.50%, 04/15/41		55,000		62,234
Union Pacific Corp., Sr. Unsec. Notes, 4.00%, 02/01/21		135,000		145,663
				228,151
Real Estate Services–0.02%
CB Richard Ellis Services Inc., Sr. Unsec. Gtd. Global Notes, 6.63%, 10/15/20		5,000		5,163
Regional Banks–1.72%
BB&T Capital Trust II, Jr. Unsec. Gtd. Sub. Global Capital Securities, 6.75%, 06/07/36		5,000		4,995
CIT Group Inc., Sec. Gtd. Bonds, 7.00%, 05/02/17(b)		20,000		20,050
PNC Funding Corp., Sr. Unsec. Gtd. Global Notes, 3.63%, 02/08/15		110,000		116,028
PNC Preferred Funding Trust III, Jr. Sub. Notes, 8.70%(b)(f)		200,000		204,500
Regions Financial Corp., Unsec. Sub. Notes, 7.38%, 12/10/37		30,000		24,825
Synovus Financial Corp., Unsec. Sub. Global Notes, 5.13%, 06/15/17		20,000		17,050
				387,448
Research & Consulting Services–0.05%
FTI Consulting Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 10/01/20		10,000		10,475
Restaurants–1.00%
Yum! Brands, Inc., Sr. Unsec. Notes, 5.30%, 09/15/19		200,000		224,956
Semiconductor Equipment–0.20%
Amkor Technology Inc., Sr. Unsec. Global Notes, 7.38%, 05/01/18		25,000		25,625
Sensata Technologies B.V. (Netherlands), Sr. Unsec. Gtd. Notes, 6.50%, 05/15/19(b)		20,000		19,950
				45,575
Semiconductors–0.12%
Freescale Semiconductor Inc., Sr. Sec. Gtd. Notes, 9.25%, 04/15/18(b)		25,000		26,812
Sovereign Debt–0.77%
Mexico Government International Bond (Mexico), Series A, Sr. Unsec. Medium-Term Global Notes, 6.05%, 01/11/40		60,000		73,500
Russian Foreign Bond (Russia), Sr. Unsec. Euro Bonds, 3.63%, 04/29/15(b)		100,000		100,750
				174,250

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

Invesco V.I. Diversified Income Fund

	Principal
	Amount		Value
Specialized Finance–1.11%
Moody’s Corp., Sr. Unsec. Notes, 5.50%, 09/01/20	$	110,000	$	115,543
National Rural Utilities Cooperative Finance Corp., Sr. Sec. Collateral Trust Bonds, 3.05%, 03/01/16		70,000		73,883
Sr. Sec. Collateral Trust Notes, 2.63%, 09/16/12		60,000		60,741
				250,167
Specialized REIT’s–2.05%
Entertainment Properties Trust, Sr. Unsec. Gtd. Global Notes, 7.75%, 07/15/20		245,000		261,049
HCP, Inc., Sr. Unsec. Notes, 3.75%, 02/01/16		25,000		25,507
Host Hotels & Resorts L.P., Sr. Gtd. Global Notes, 6.00%, 11/01/20		10,000		10,250
Omega Healthcare Investors, Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 10/15/22		5,000		5,019
Senior Housing Properties Trust, Sr. Unsec. Notes, 4.30%, 01/15/16		75,000		73,641
Ventas Realty L.P./Ventas Capital Corp., Sr. Unsec. Gtd. Notes, 4.75%, 06/01/21		90,000		87,321
				462,787
Specialty Chemicals–0.07%
PolyOne Corp., Sr. Unsec. Notes, 7.38%, 09/15/20		15,000		15,525
Specialty Stores–0.17%
Michaels Stores Inc., Sr. Unsec. Gtd. Global Notes, 7.75%, 11/01/18		10,000		10,200
Staples Inc., Sr. Unsec. Gtd. Global Notes, 9.75%, 01/15/14		25,000		28,500
				38,700
Steel–1.81%
ArcelorMittal S.A. (Luxembourg), Sr. Unsec. Global Notes, 5.50%, 03/01/21		10,000		9,203
6.13%, 06/01/18		55,000		55,990
6.75%, 03/01/41		10,000		9,004
7.00%, 10/15/39		195,000		181,024
FMG Resources Pty. Ltd. (Australia), Sr. Unsec. Gtd. Notes, 6.38%, 02/01/16(b)		7,000		6,808
7.00%, 11/01/15(b)		7,000		7,105
United States Steel Corp., Sr. Unsec. Notes, 7.00%, 02/01/18		6,000		5,970
Vale Overseas Ltd. (Brazil), Sr. Unsec. Gtd. Global Notes, 4.63%, 09/15/20		55,000		57,061
6.88%, 11/10/39		65,000		75,003
				407,168
Systems Software–0.08%
Allen Systems Group Inc., Sec. Gtd. Notes, 10.50%, 11/15/16(b)		20,000		17,500
Technology Distributors–0.31%
Avnet Inc., Sr. Unsec. Notes, 5.88%, 06/15/20		65,000		68,922
Textiles–0.07%
Levi Strauss & Co., Sr. Unsec. Global Notes, 7.63%, 05/15/20		15,000		15,413
Thrifts & Mortgage Finance–0.16%
First Niagara Financial Group Inc., Unsec. Sub. Notes, 7.25%, 12/15/21		35,000		35,837
Tires & Rubber–0.06%
Goodyear Tire & Rubber Co. (The), Sr. Unsec. Gtd. Notes, 8.25%, 08/15/20		13,000		14,235
Tobacco–0.46%
Altria Group, Inc., Sr. Unsec. Gtd. Global Notes, 4.75%, 05/05/21		95,000		104,861
Trading Companies & Distributors–0.17%
Aircastle Ltd., Sr. Note, 9.75%, 08/01/18(b)		2,000		2,110
H&E Equipment Services Inc., Sr. Unsec. Gtd. Global Notes, 8.38%, 07/15/16		25,000		25,594
Interline Brands, Inc., Sr. Unsec. Gtd. Global Notes, 7.00%, 11/15/18		5,000		5,187
RSC Equipment Rental Inc./RSC Holdings III LLC, Sr. Unsec. Gtd. Global Notes, 8.25%, 02/01/21		5,000		5,125
				38,016
Trucking–0.18%
Avis Budget Car Rental LLC/Avis Budget Finance Inc., Sr. Unsec. Gtd. Global Notes,
8.25%, 01/15/19		15,000		14,962
9.75%, 03/15/20		2,000		2,070
Hertz Corp. (The), Sr. Unsec. Gtd. Global Notes, 6.75%, 04/15/19		12,000		12,210
7.38%, 01/15/21		10,000		10,275
				39,517
Wireless Telecommunication Services–1.88%
Alltel Corp., Sr. Unsec. Global Notes, 7.00%, 07/01/12		50,000		51,516
American Tower Corp., Sr. Unsec. Global Notes, 4.63%, 04/01/15		90,000		94,292
Clearwire Communications LLC/Clearwire Finance, Inc., Sr. Sec. Gtd. Notes, 12.00%, 12/01/15(b)		15,000		14,513
Cricket Communications, Inc., Sr. Unsec. Gtd. Global Notes, 7.75%, 10/15/20		22,000		19,360
Crown Castle Towers LLC, Sr. Sec. Gtd. Notes, 4.88%, 08/15/20(b)		120,000		122,400
Intelsat Jackson Holdings S.A. (Luxembourg), Sr. Unsec. Gtd. Notes, 7.25%, 04/01/19(b)		10,000		10,250
7.50%, 04/01/21(b)		15,000		15,375
MetroPCS Wireless Inc., Sr. Unsec. Gtd. Notes, 6.63%, 11/15/20		10,000		9,450
7.88%, 09/01/18		5,000		5,078
SBA Telecommunications Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 08/15/19		13,000		14,219

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

Invesco V.I. Diversified Income Fund

	Principal
	Amount		Value
Wireless Telecommunication Services–(continued)
Sprint Capital Corp., Sr. Unsec. Gtd. Global Notes, 6.90%, 05/01/19	$	10,000	$	8,225
Sprint Nextel Corp., Sr. Unsec. Gtd. Notes, 9.00%, 11/15/18(b)		7,000		7,376
Sr. Unsec. Notes,
8.38%, 08/15/17		5,000		4,519
11.50%, 11/15/21(b)		2,000		1,988
Wind Acquisition Finance S.A. (Luxembourg), Sr. Sec. Gtd. Notes, 11.75%, 07/15/17(b)		50,000		44,750
				423,311
Total U.S. Dollar Denominated Bonds and Notes (Cost $18,176,752)				18,799,374
U.S. Treasury Securities–12.45%
U.S. Treasury Bills–0.22%
0.10%, 11/15/12(g)(h)		50,000		49,963
U.S. Treasury Notes–7.05%
2.00%, 04/30/16		160,000		168,950
1.75%, 05/31/16		230,000		240,530
1.00%, 08/31/16		250,000		252,734
3.63%, 02/15/21		800,000		929,000
				1,591,214
U.S. Treasury Bonds–5.18%
4.25%, 05/15/39		100,000		127,125
4.50%, 08/15/39		100,000		132,141
4.75%, 02/15/41		660,000		908,840
				1,168,106
Total U.S. Treasury Securities (Cost $2,463,107)				2,809,283
Asset-Backed Securities–2.12%
Countrywide Asset-Backed Ctfs., Series 2007-4, Class A1B, Pass Through Ctfs., 5.81%, 09/25/37		37,306		36,641
Credit Suisse Mortgage Capital Ctfs. Series 2009-2R, Class 1A11, Floating Rate Pass Through Ctfs., 2.70%, 09/26/34(b)(e)		89,659		84,921
Santander Drive Auto Receivables Trust, Series 2011-1, Class D, Pass Through Ctfs., 4.01%, 02/15/17		80,000		79,837
TIAA Seasoned Commercial Mortgage Trust, Series 2007-C4, Class A2, Variable Rate Pass Through Ctfs., 5.44%, 08/15/39(e)		19,538		19,833
Wachovia Bank Commercial Mortgage Trust, Series 2005-C21, Class AJ, Variable Rate Pass Through Ctfs., 5.38%, 10/15/44(e)		110,000		107,869
Wells Fargo Mortgage Backed Securities Trust, Series 2004-Z, Class 2A1, Floating Rate Pass Through Ctfs., 2.62%, 12/25/34(e)		165,140		149,871
Total Asset-Backed Securities (Cost $464,822)				478,972
U.S. Government Sponsored Mortgage-Backed Securities–1.13%
Federal Home Loan Mortgage Corp. (FHLMC)–0.36%
Pass Through Ctfs.,
6.50%, 05/01/16 to 08/01/32		7,968		8,994
6.00%, 05/01/17 to 12/01/31		41,313		45,708
5.50%, 09/01/17		23,705		25,710
				80,412
Federal National Mortgage Association (FNMA)–0.64%
Pass Through Ctfs.,
7.00%, 02/01/16 to 09/01/32		21,318		24,522
6.50%, 05/01/16 to 09/01/31		6,786		7,574
5.00%, 11/01/18		24,536		26,505
7.50%, 04/01/29 to 10/01/29		71,568		79,794
8.00%, 04/01/32		5,866		6,584
				144,979
Government National Mortgage Association (GNMA)–0.13%
Pass Through Ctfs., 7.50%, 06/15/23		9,244		10,703
8.50%, 11/15/24		5,813		6,650
7.00%, 07/15/31 to 08/15/31		2,162		2,540
6.50%, 11/15/31 to 03/15/32		4,972		5,764
6.00%, 11/15/32		3,528		4,016
				29,673
Total U.S. Government Sponsored Mortgage-Backed Securities (Cost $232,755)				255,064
Municipal Obligations–0.99%
Alameda (County of), California Joint Powers Authority (Multiple Capital); Series 2010 A, Lease RB, 7.05%, 12/01/44		55,000		68,359
Florida Development Finance Corp. (Palm Bay Academy Inc.); Series 2006 B, Taxable RB, 7.50%, 05/15/17		65,000		58,332
Georgia (State of) Municipal Electric Authority (Plant Vogtle Units 3 & 4–Project J); Series 2010 A, Taxable RB, 6.64%, 04/01/57		90,000		95,345
Total Municipal Obligations (Cost $209,523)				222,036
Non-U.S. Dollar Denominated Bonds & Notes–0.24%(i)
Canada–0.03%
Gateway Casinos & Entertainment Ltd. (Canada), Sec. Gtd. Notes, 8.88%, 11/15/17(b)	CAD	8,000		8,009
United States–0.21%
CEDC Finance Corp. International Inc., Sr. Sec. Gtd. Notes, 8.88%, 12/01/16(b)	EUR	50,000		46,595
Total Non-U.S. Dollar Denominated Bonds & Notes (Cost $57,548)				54,604

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

Invesco V.I. Diversified Income Fund

	Shares		Value
Preferred Stocks–0.18%
Consumer Finance–0.04%
Ally Financial, Inc. Series A, 8.50% Pfd.		250	$	4,597
GMAC Capital Trust I, Series 2, 8.13% Jr. Gtd. Sub. Pfd.		270		5,222
				9,819
Office REIT’s–0.01%
DuPont Fabros Technology, Inc., Series B, 7.63% Pfd.		95		2,369
Regional Banks–0.11%
Zions Bancorp., Series C, 9.50% Pfd.		1,000		25,250
Tires & Rubber–0.02%
Goodyear Tire & Rubber Co. (The), $2.94 Conv. Pfd.		75		3,649
Total Preferred Stocks (Cost $46,056)				41,087
Common Stocks & Other Equity Interests–0.00%
Broadcasting–0.00%
Adelphia Recovery Trust Series ACC-1(j)		87,412		88
Cable & Satellite–0.00%
Adelphia Communications Corp.(j)		900		225
Total Common Stocks & Other Equity Interests (Cost $22,181)				313
TOTAL INVESTMENTS–100.45% (Cost $21,672,744)				22,660,733
OTHER ASSETS LESS LIABILITIES–(0.45)%				(101,600	)
NET ASSETS–100.00%			$	22,559,133

Investment Abbreviations:

CAD	– Canadian Dollar
Ctfs.	– Certificates
Deb.	– Debentures
EUR	– Euro
FHLMC	– Federal Home Loan Mortgage Corp.
FNMA	– Federal National Mortgage Association
GNMA	– Government National Mortgage Association
Gtd.	– Guaranteed
Jr.	– Junior
Ltd.	– Limited
Pfd.	– Preferred
PIK	– Payment in Kind
RB	– Revenue Bonds
Ref.	– Refunding
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, 2011 was $5,665,009, which represented 25.11% 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 these securities at December 31, 2011 was $13,838, which represented less than 1% of the Fund’s Net Assets.
(d)	Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put.
(e)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2011.
(f)	Perpetual bond with no specified maturity date.
(g)	All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1M 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)	Foreign denominated security. Principal amount is denominated in currency indicated.
(j)	Non-income producing security acquired as part of the Adelphia Communications bankruptcy reorganization.

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, 2011

Assets:
Investments, at value (Cost $21,672,744)	$	22,660,733
Foreign currencies, at value (Cost $7,765)		7,554
Receivable for:
Fund shares sold		4,250
Dividends and interest		308,066
Foreign currency contracts		2,583
Investment for trustee deferred compensation and retirement plans		42,327
Other assets		368
Total assets		23,025,881
Liabilities:
Payable for:
Fund shares reacquired		17,963
Amount due custodian		325,882
Variation margin		438
Accrued fees to affiliates		9,836
Accrued other operating expenses		62,249
Trustee deferred compensation and retirement plans		50,380
Total liabilities		466,748
Net assets applicable to shares outstanding	$	22,559,133
Net Assets consist of:
Shares of beneficial interest	$	30,112,427
Undistributed net investment income		1,034,647
Undistributed net realized gain (loss)		(9,552,639	)
Unrealized appreciation		964,698
	$	22,559,133
Net Assets:
Series I	$	22,332,518
Series II	$	226,615
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		3,605,391
Series II		36,769
Series I:
Net asset value per share	$	6.19
Series II:
Net asset value per share	$	6.16

Statement of Operations

For the year ended December 31, 2011

Investment income:
Interest	$	1,272,665
Dividends from affiliated money market funds		327
Total investment income		1,272,992
Expenses:
Advisory fees		139,937
Administrative services fees		90,402
Custodian fees		12,070
Distribution fees — Series II		530
Transfer agent fees		8,470
Trustees’ and officers’ fees and benefits		18,180
Professional services fees		42,270
Other		28,042
Total expenses		339,901
Less: Fees waived and expenses reimbursed		(165,106	)
Net expenses		174,795
Net investment income		1,098,197
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		522,242
Foreign currencies		(772	)
Foreign currency contracts		206
Futures contracts		49,881
Swap agreements		(3,746	)
		567,811
Change in net unrealized appreciation (depreciation) of:
Investment securities		(58,361	)
Foreign currencies		(218	)
Foreign currency contracts		2,404
Futures contracts		(31,667	)
		(87,842	)
Net realized and unrealized gain		479,969
Net increase in net assets resulting from operations	$	1,578,166

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, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	1,098,197		$	1,225,023
Net realized gain		567,811			814,813
Change in net unrealized appreciation (depreciation)		(87,842	)		296,160
Net increase in net assets resulting from operations		1,578,166			2,335,996
Distributions to shareholders from net investment income:
Series I		(1,215,874	)		(1,390,866	)
Series II		(10,587	)		(12,740	)
Total distributions from net investment income		(1,226,461	)		(1,403,606	)
Share transactions–net:
Series I		(1,245,046	)		(1,990,553	)
Series II		(8,207	)		(71,022	)
Net increase (decrease) in net assets resulting from share transactions		(1,253,253	)		(2,061,575	)
Net increase (decrease) in net assets		(901,548	)		(1,129,185	)
Net assets:
Beginning of year		23,460,681			24,589,866
End of year (includes undistributed net investment income of $1,034,647 and $1,168,966, respectively)	$	22,559,133		$	23,460,681

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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. 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”).

Invesco V.I. Diversified Income 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.
	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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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.

Invesco V.I. Diversified Income 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.	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.	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.
L.	Dollar Rolls and Forward Commitment Transactions — The Fund may enter into dollar roll transactions to enhance the Fund’s performance. The Fund executes its dollar roll transactions in the to be announced (“TBA”) market whereby the Fund makes a forward commitment to purchase a security and, instead of accepting delivery, the position is offset by the sale of the security with a simultaneous agreement to repurchase at a future date.
	The Fund accounts for dollar roll transactions as purchases and sales and realizes gains and losses on these transactions. These transactions increase the Fund’s portfolio turnover rate. The Fund will segregate liquid assets in an amount equal to its dollar roll commitments. Dollar roll transactions are considered borrowings under the 1940 Act.
	Dollar roll transactions involve the risk that a counter-party to the transaction may fail to complete the transaction. If this occurs, the Fund may lose the opportunity to purchase or sell the security at the agreed upon price. Dollar rolls transactions also involve the risk that the value of the securities retained by the Fund may decline below the price of the securities that the Fund has sold but is obligated to purchase under the agreement.
M.	Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between 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.
N.	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. If a counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties, the Fund may experience significant delays in obtaining any recovery in a bankruptcy or other reorganization proceeding. The Fund may obtain only limited recovery or may obtain no recovery in such circumstances.
	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.
O.	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 Daily 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide 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, 2013, 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 0.75%

Invesco V.I. Diversified Income Fund

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, including litigation expenses; 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, 2013.

  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.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $139,938 and reimbursed Fund expenses of $25,168.

  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, 2011, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $40,402 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, IIS and/or IDI.

NOTE 3—Additional Valuation Information

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

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

Invesco V.I. Diversified Income Fund

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1			Level 2		Level 3		Total
Equity Securities	$	41,175		$	225	$	—	$	41,400
U.S. Treasury Securities		—			2,809,283		—		2,809,283
U.S. Government Sponsored Securities		—			255,064		—		255,064
Domestic Corporate Debt Securities		—			18,625,124		0		18,625,124
Foreign Corporate Debt Securities		—			54,604		—		54,604
Foreign Sovereign Debt Securities		—			174,250		—		174,250
Asset Backed Securities		—			478,972		—		478,972
Municipal Obligations		—			222,036		—		222,036
	$	41,175		$	22,619,558	$	0	$	22,660,733
Foreign Currency Contracts*		—			2,404		—		2,404
Futures*		(25,477	)		—		—		(25,477	)
Total Investments	$	15,698		$	22,621,962	$	0	$	22,637,660

*  Unrealized appreciation (depreciation).

NOTE 4—Derivative Investments

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, 2011:

	Value
Risk Exposure/Derivative Type	Assets		Liabilities
Currency risk
Foreign Currency Contracts(a)	$	2,404	$	—
Interest rate risk
Futures contracts(b)		29,049		(54,526	)

(a)	Values are disclosed on the Statement of Assets and Liabilities under the Foreign currency contracts outstanding.
(b)	Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets and Liabilities.

Effect of Derivative Instruments for the year ended December 31, 2011

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			Foreign Currency
	Futures*			Agreements*			Contracts*
Realized Gain (Loss)
Credit risk	$	—		$	(3,746	)	$	—
Currency risk		—			—			206
Interest rate risk		49,881			—			—
Change in Unrealized Appreciation (Depreciation)
Credit risk	$	—		$	—		$	—
Currency risk		—			—			2,404
Interest rate risk		(31,667	)		—			—
Total	$	18,214		$	(3,746	)	$	2,610

*  The average notional value of futures, swap agreements and foreign currency contracts outstanding during the period was $8,339,248, $291,667 and $10,954, respectively.

Invesco V.I. Diversified Income Fund

Open Futures Contracts
								Unrealized
	Number of		Expiration		Notional			Appreciation
Long Contracts	Contracts		Month		Value			(Depreciation)
U.S. Treasury Ultra Bonds		4		March-2012	$	640,750		$	7,304
U.S. Treasury 5 Year Notes		32		March-2012		3,944,250			21,745
Subtotal					$	4,585,000		$	29,049
Short Contracts
U.S. Treasury 10 Year Notes		28		March-2012	$	(3,671,500	)	$	(49,934	)
U.S. Treasury 30 Year Notes		1		March-2012		(144,813	)		(4,592	)
Subtotal					$	(3,816,313	)	$	(54,526	)
Total					$	768,687		$	(25,477	)

Open Foreign Currency Contracts
Settlement		Contract to				Notional		Unrealized
Date	Counterparty	Deliver		Receive		Value		Appreciation
02/09/12	RBC Capital Markets Corp.	EUR	34,000	USD	46,426	$	44,022	$	2,404
Closed Foreign Currency Contracts
Closed		Contract to				Notional		Realized
Date	Counterparty	Deliver		Receive		Value		Gain
02/09/12	RBC Capital Markets Corp.	EUR	7,000	USD	9,637	$	9,458	$	179
Total foreign currency contracts								$	2,583

Currency Abbreviations:
EUR	– Euro
USD	– U.S. Dollar

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, 2011, the Fund paid legal fees of $1,148 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2011 and 2010:

	2011		2010
Ordinary income	$	1,226,461	$	1,403,606

Invesco V.I. Diversified Income Fund

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	1,083,674
Net unrealized appreciation — investments		949,971
Net unrealized appreciation (depreciation) — other investments		(218	)
Temporary book/tax differences		(49,027	)
Capital loss carryforward		(9,537,694	)
Shares of beneficial interest		30,112,427
Total net assets	$	22,559,133

  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 straddle loss deferrals.

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund utilized $582,621 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, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term		Long-Term		Total
December 31, 2016	$	2,178,603	$	—	$	2,178,603
December 31, 2017		7,359,091		—		7,359,091
	$	9,537,694	$	—	$	9,537,694

*  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, 2011 was $10,615,008 and $13,235,941, 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	$	1,370,144
Aggregate unrealized (depreciation) of investment securities		(420,173	)
Net unrealized appreciation of investment securities	$	949,971
Cost of investments for tax purposes is $21,710,762.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions and paydown reclasses, on December 31, 2011, undistributed net investment income was decreased by $6,055 and undistributed net realized gain (loss) was increased by $6,055. This reclassification had no effect on the net assets of the Fund.

Invesco V.I. Diversified Income Fund

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		348,442		$	2,182,267			297,335		$	1,831,971
Series II		5,383			33,498			68			406
Issued as reinvestment of dividends:
Series I		198,025			1,215,874			227,266			1,390,866
Series II		1,730			10,587			2,092			12,740
Reacquired:
Series I		(746,622	)		(4,643,187	)		(848,553	)		(5,213,390	)
Series II		(8,507	)		(52,292	)		(13,673	)		(84,168	)
Net increase (decrease) in share activity		(201,549	)	$	(1,253,253	)		(335,465	)	$	(2,061,575	)

^(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 Fund 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) on																to average			to average net			Ratio of net
	Net asset				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 12/31/11	$	6.10	$	0.29	$	0.13		$	0.42		$	(0.33	)	$	6.19		7.02	%	$	22,333		0.75	%(d)		1.46	%(d)		4.71	%(d)		59	%
Year ended 12/31/10		5.88		0.31		0.28			0.59			(0.37	)		6.10		10.05			23,229		0.75			1.36			5.03			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
Series II
Year ended 12/31/11		6.07		0.28		0.13			0.41			(0.32	)		6.16		6.72			227		1.00	(d)		1.71	(d)		4.46	(d)		59
Year ended 12/31/10		5.85		0.29		0.28			0.57			(0.35	)		6.07		9.70			232		1.00			1.61			4.78			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

(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 $23,111 and $212 for Series I and Series II shares, 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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, the results of its operations for the year then ended, and 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 17, 2012

Houston, Texas

Invesco V.I. Diversified 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, 2011 through December 31, 2011.

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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	1,034.60	$	3.85	$	1,021.42	$	3.82		0.75	%
Series II		1,000.00		1,033.20		5.12		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, 2011 through December 31, 2011, 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, 2011:

Federal and State Income Tax
Corporate Dividends Received Deduction*	0.00%
U.S. Treasury Obligations*	4.35%

*  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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. Diversified Income Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. Diversified Income Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. Diversified Income Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. Diversified Income Fund

Invesco V.I. Dividend Growth Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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

In the year ended December 31, 2011, U.S. equity markets delivered muted returns but were volatile as investors worried about a potential slowdown in global economic growth. For the year, Invesco V.I. Dividend Growth Fund lagged its broad market and style-specific benchmarks, the S&P 500 Index and the Russell 1000 Index, respectively. The Fund’s returns were largely driven by investments in consumer staples, utilities and energy stocks. Holdings in the financials sector were the largest detractors from results during the fiscal year.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	0.20	%
Series II Shares	–0.06
S&P 500 Index▼ (Broad Market Index)	2.09
Russell 1000 Index▼ (Style-Specific Index)	1.50
Lipper VUF Large-Cap Core Funds Index▼ (Peer Group Index)	–2.10

Source(s): ^▼Lipper Inc.

As noted in the Fund’s latest semiannual report, the Fund has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.

How we invest

Our total return approach emphasizes long-term capital appreciation, current income and capital preservation. The Fund may 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 return capital to shareholders via dividends and share repurchases. All stocks in the portfolio pay dividends, and the Fund pays a quarterly dividend to shareholders. We manage risk by 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

may 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	A company’s fundamental business prospects deteriorate.
n	We identify a more attractive investment opportunity.

Market conditions and your Fund

Equity markets rose from the start of the year through the first quarter of 2011. Corporate fundamentals continued to improve as cost controls and stronger revenues helped produce better margins and earnings. However, in the spring of 2011, investor focus shifted from fundamentals to macroeconomic concerns. Market volatility dramatically increased due to civil unrest in the Middle East and the earthquake and tsunami in Japan. Then the eurozone sovereign debt crisis intensified, fear of contagion from Greece to other EU nations spread and growth in developed economies began to slow. As a result, fears of a global recession grew.

     Despite significant volatility, major U.S. equity indexes produced positive returns for the year. Sector performance was mixed, with utilities, consumer staples and health care being the leading sectors and financials and materials lagging.

     Consumer staples company Kimberly-Clark was the top contributor to Fund performance for the year. Kimberly-Clark has been a long-term investment for the Fund. Historically, the shareholder-friendly company has used its strong balance sheet to increase its dividend and to buy back stock each year. The company also has invested in innovative products and has been able to offset rising input costs by increasing prices and restructuring cost savings. Over the year, we opportunistically added to our Kimberly-Clark position when concerns about weak consumer spending and rising input costs weighed on the company’s stock price. We believed that Kimberly-Clark would be able to meet these challenges, as it has in the past. Indeed, the company’s third quarter 2011 results exceeded market expectations, and Kimberly-Clark gained market share with its new products.

Portfolio Composition

By sector

Consumer Staples	23.4	%
Financials	18.3
Consumer Discretionary	12.1
Utilities	11.1
Industrials	9.8
Health Care	8.0
Information Technology	5.3
Materials	4.3
Energy	1.3
Telecommunication Services	1.0
Money Market Funds Plus Other Assets Less Liabilities	5.4

Top 10 Equity Holdings*

1.	Kimberly-Clark Corp.	3.3	%
2.	General Mills, Inc.	3.2
3.	Procter & Gamble Co. (The)	2.3
4.	Heineken N.V.	2.3
5.	SunTrust Banks, Inc.	2.3
6.	American Electric Power Co., Inc.	2.3
7.	General Dynamics Corp.	2.2
8.	Automatic Data Processing, Inc.	2.2
9.	Raytheon Co.	2.1
10.	Johnson & Johnson	2.1

Top Five Industries

1.	Packaged Foods & Meats	7.9	%
2.	Regional Banks	7.1
3.	Electric Utilities	6.3
4.	Household Products	5.6
5.	Pharmaceuticals	5.0

Total Net Assets	$322.3 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 V.I. Dividend Growth Fund

     Another top contributor to Fund results was oil services firm Baker Hughes. The company reported strong earnings driven by continued growing revenues and improving margins in its North American business. The company received notable benefits from its 2010 acquisition of BJ Services, including the realization of cost synergies and stronger pricing power for its pressure pumping services used in shale drilling. We sold our position in Baker Hughes before the close of the year as the stock price reached our estimate of fair valuation.

     Holdings in the financials sector were the primary detractors from Fund results during the fiscal year. Fears of an economic slowdown and European sovereign debt uncertainties weighed on the Fund’s U.S. regional bank holdings. Hudson City Bancorp, SunTrust Banks and Zions Bancorporation all lagged the overall market in sympathy with broader macroeconomic uncertainties, and they were among the largest detractors from results. We have further stress-tested our analysis of these investments, valuing companies on a variety of metrics and considering the impact of regulations on their normalized earnings power. We believe valuations offer an attractive risk/reward profile as the group, at year-end, was trading near 2008 levels (based on tangible book value), despite higher capital positions, lower credit costs, improving loan demand and strong deposit growth. Also, these companies are increasingly returning excess capital to shareholders via dividends and stock buy-backs. At year-end, the Fund’s exposure to financials was primarily in regional banks and property and casualty insurance companies, which we believed represented the best risk/reward opportunities within the sector.

     The landscape is changing quickly as markets react to slowing economic growth and the impact of Europe’s sovereign debt issues. In 2011, we found more attractive opportunities in stable growing companies whose cash flows and business predictability was more consistent, rather than global cyclical stocks which we believed were near peak margins and had less attractive valuations. However, some cyclical sectors such as financials experienced dramatic compression in their valuation; as a result, we became active investors in the sector. At the end of the year, the Fund’s largest sector overweights, as compared to the Russell 1000 Index, were the consumer staples, financials and utilities sectors. Primary underweights were the information technology, energy and health care sectors.

     Overall at the end of 2011, we believed companies were in sound financial shape and equity valuations were modestly attractive. Also, valuation dispersions were narrow within sectors and return correlations were at historic highs. While the breadth of investment opportunities has decreased over the last two years, we believe investors should remain focused on long-term business fundamentals and dividend-paying stocks.

     We believe one of our competitive advantages is a disciplined approach to evaluating stocks over a full market cycle, applying our total return approach. We focus not only on an investment’s capital appreciation potential, but also on its current dividend income and capital preservation. 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. 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. She joined Invesco in 1991. 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. He joined Invesco in 2001. Mr. Harrington 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(es)

Fund and index data from 12/31/01*

1

Source: Lipper Inc.

*

During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

     As noted earlier in this report, the Fund

has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer

group market measures. These additional benchmarks will now be included in the chart above.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (3/1/90)			6.62	%
	10	Years	1.99
	5	Years	–1.81
	1	Year	0.20
Series II Shares
Inception (6/5/00)			1.65	%
	10	Years	1.73
	5	Years	–2.06
	1	Year	–0.06

Effective June 1, 2010, Class X and Class Y shares of the predecessor fund, Morgan Stanley Variable Investment Dividend Growth Portfolio, 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 0.82% and 1.07%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     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 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, 2011, 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

Common stock risk. 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.

     Depositary receipts risk. 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.

     Foreign securities risk. 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 securities regulation and trading, and foreign taxation issues.

     Derivatives risk. 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. Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss.

     Futures risk. 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.

     Options risk. 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.

     Swaps risk. 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. Swaps are subject to credit risk and counterparty risk.

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. Dividend Growth Fund

Schedule of Investments^(a)

December 31, 2011

	Shares		Value
Common Stocks–94.61%
Aerospace & Defense–4.34%
General Dynamics Corp.		107,843	$	7,161,854
Raytheon Co.		141,043		6,823,660
				13,985,514
Apparel Retail–0.58%
TJX Cos., Inc.		28,834		1,861,235
Asset Management & Custody Banks–1.67%
Federated Investors, Inc.–Class B		256,252		3,882,218
State Street Corp.		37,207		1,499,814
				5,382,032
Auto Parts & Equipment–1.56%
Johnson Controls, Inc.		160,285		5,010,509
Brewers–2.27%
Heineken N.V. (Netherlands)		158,760		7,329,505
Building Products–2.00%
Masco Corp.		615,988		6,455,554
Casinos & Gaming–1.50%
International Game Technology		281,125		4,835,350
Consumer Finance–1.89%
Capital One Financial Corp.		143,916		6,086,208
Data Processing & Outsourced Services–2.16%
Automatic Data Processing, Inc.		128,561		6,943,580
Department Stores–0.03%
Nordstrom, Inc.		2,054		102,104
Distillers & Vintners–0.27%
Treasury Wine Estates (Australia)		227,094		854,760
Diversified Chemicals–0.33%
E. I. du Pont de Nemours and Co.		23,434		1,072,808
Drug Retail–1.04%
Walgreen Co.		101,705		3,362,367
Electric Utilities–6.29%
American Electric Power Co., Inc.		177,002		7,311,953
Entergy Corp.		62,527		4,567,597
Exelon Corp.		151,222		6,558,498
PPL Corp.		62,494		1,838,573
				20,276,621
Food Distributors–2.01%
Sysco Corp.		221,242		6,489,028
Gas Utilities–1.32%
AGL Resources Inc.		100,276		4,237,664
General Merchandise Stores–1.91%
Target Corp.		120,412		6,167,503
Health Care Equipment–3.01%
Medtronic, Inc.		110,933		4,243,187
Stryker Corp.		109,649		5,450,652
				9,693,839
Hotels, Resorts & Cruise Lines–1.79%
Accor S.A. (France)		64,045		1,614,090
Marriott International Inc.–Class A		141,937		4,140,302
				5,754,392
Household Products–5.59%
Kimberly-Clark Corp.		143,485		10,554,757
Procter & Gamble Co. (The)		111,962		7,468,985
				18,023,742
Housewares & Specialties–0.90%
Newell Rubbermaid Inc.		179,181		2,893,773
Industrial Machinery–3.11%
Illinois Tool Works Inc.		48,030		2,243,481
Pentair, Inc.		184,493		6,141,772
Snap-On Inc.		32,314		1,635,735
				10,020,988
Integrated Oil & Gas–1.30%
Exxon Mobil Corp.		27,215		2,306,743
Total S.A. (France)		36,876		1,882,260
				4,189,003
Integrated Telecommunication Services–1.00%
AT&T Inc.		106,865		3,231,598
Investment Banking & Brokerage–1.32%
Charles Schwab Corp. (The)		378,411		4,260,908
Life & Health Insurance–2.91%
Lincoln National Corp.		123,635		2,400,991
Prudential Financial, Inc.		48,856		2,448,663
StanCorp Financial Group, Inc.		123,532		4,539,801
				9,389,455
Motorcycle Manufacturers–0.91%
Harley-Davidson, Inc.		75,322		2,927,766

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

Invesco V.I. Dividend Growth Fund

	Shares		Value
Movies & Entertainment–1.93%
Time Warner Inc.		171,870	$	6,211,382
Multi-Utilities–3.31%
Dominion Resources, Inc.		83,220		4,417,317
PG&E Corp.		38,844		1,601,150
Sempra Energy		84,645		4,655,475
				10,673,942
Office Services & Supplies–0.36%
Avery Dennison Corp.		39,905		1,144,475
Oil & Gas Storage & Transportation–0.20%
Southern Union Co.		15,183		639,356
Packaged Foods & Meats–7.93%
Campbell Soup Co.		190,689		6,338,502
General Mills, Inc.		254,475		10,283,335
Kraft Foods Inc.–Class A		172,723		6,452,931
Mead Johnson Nutrition Co.		36,156		2,485,002
				25,559,770
Paper Products–1.80%
International Paper Co.		195,904		5,798,758
Personal Products–0.70%
L’Oreal S.A (France)		21,713		2,267,923
Pharmaceuticals–4.98%
Bristol-Myers Squibb Co.		69,474		2,448,264
Eli Lilly & Co.		136,262		5,663,048
Johnson & Johnson		102,210		6,702,932
Novartis AG (Switzerland)		21,823		1,247,759
				16,062,003
Property & Casualty Insurance–1.41%
Travelers Cos., Inc. (The)		76,971		4,554,374
Regional Banks–7.14%
Cullen/Frost Bankers, Inc.		15,329		811,057
Fifth Third Bancorp		432,494		5,501,324
M&T Bank Corp.		48,977		3,738,904
SunTrust Banks, Inc.		413,481		7,318,614
Zions Bancorp.		345,750		5,628,810
				22,998,709
Reinsurance–0.41%
Transatlantic Holdings, Inc.		24,014		1,314,286
Restaurants–0.86%
Brinker International, Inc.		103,703		2,775,092
Semiconductors–1.44%
Linear Technology Corp.		10,056		301,982
Texas Instruments Inc.		148,700		4,328,657
				4,630,639
Soft Drinks–1.26%
Coca-Cola Co. (The)		57,909		4,051,893
Specialized Consumer Services–0.09%
H&R Block, Inc.		17,966		293,385
Specialized REIT’s–1.63%
Weyerhaeuser Co.		281,700		5,259,339
Specialty Chemicals–0.53%
Ecolab Inc.		29,669		1,715,165
Systems Software–1.74%
Microsoft Corp.		215,781		5,601,675
Thrifts & Mortgage Finance–1.59%
Capitol Federal Financial Inc.		11,148		128,648
Hudson City Bancorp, Inc.		800,043		5,000,269
				5,128,917
Tobacco–2.29%
Altria Group, Inc.		156,566		4,642,182
Philip Morris International Inc.		34,896		2,738,638
				7,380,820
Total Common Stocks (Cost $302,436,259)				304,899,709
Money Market Funds–3.92%
Liquid Assets Portfolio–Institutional Class(b)		6,316,590		6,316,590
Premier Portfolio–Institutional Class(b)		6,316,591		6,316,591
Total Money Market Funds (Cost $12,633,181)				12,633,181
TOTAL INVESTMENTS–98.53% (Cost $315,069,440)				317,532,890
OTHER ASSETS LESS LIABILITIES–1.47%				4,741,836
NET ASSETS–100.00%			$	322,274,726

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, 2011

Assets:
Investments, at value (Cost $302,436,259)	$	304,899,709
Investments in affiliated money market funds, at value and cost		12,633,181
Total investments, at value (Cost $315,069,440)		317,532,890
Foreign currencies, at value (Cost $4,811,756)		4,884,287
Receivable for:
Investments sold		1,592,347
Fund shares sold		51,989
Dividends		680,758
Investment for trustee deferred compensation and retirement plans		24,251
Total assets		324,766,522
Liabilities:
Payable for:
Investments purchased		983,901
Fund shares reacquired		294,787
Accrued fees to affiliates		943,219
Accrued other operating expenses		209,379
Trustee deferred compensation and retirement plans		60,510
Total liabilities		2,491,796
Net assets applicable to shares outstanding	$	322,274,726
Net assets consist of:
Shares of beneficial interest	$	416,621,316
Undistributed net investment income		6,604,125
Undistributed net realized gain (loss)		(103,486,621	)
Unrealized appreciation		2,535,906
	$	322,274,726
Net Assets:
Series I	$	253,850,228
Series II	$	68,424,498
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		18,075,818
Series II		4,886,234
Series I:
Net asset value per share	$	14.04
Series II:
Net asset value per share	$	14.00

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $138,805)	$	8,678,492
Dividends from affiliated money market funds		13,351
Interest		41,888
Total investment income		8,733,731
Expenses:
Advisory fees		1,579,045
Administrative services fees		298,206
Custodian fees		38,270
Distribution fees — Series II		161,910
Transfer agent fees		27,186
Trustees’ and officers’ fees and benefits		33,748
Other		47,327
Total expenses		2,185,692
Less: Fees waived		(18,200	)
Net expenses		2,167,492
Net investment income		6,566,239
Realized and unrealized gain (loss) from:
Net realized gain from:
Investment securities (includes net gains (losses) from securities sold to affiliates of $(185,852))		23,602,811
Foreign currencies		84,894
		23,687,705
Change in net unrealized appreciation (depreciation) of:
Investment securities		(41,221,706	)
Foreign currencies		73,352
Foreign currency contracts		235
		(41,148,119	)
Net realized and unrealized gain (loss)		(17,460,414	)
Net increase (decrease) in net assets resulting from operations	$	(10,894,175	)

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, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	6,566,239		$	3,571,412
Net realized gain		23,687,705			3,469,462
Change in net unrealized appreciation (depreciation)		(41,148,119	)		15,628,383
Net increase (decrease) in net assets resulting from operations		(10,894,175	)		22,669,257
Distributions to shareholders from net investment income:
Series I		(2,886,405	)		(3,255,974	)
Series II		(680,347	)		(803,719	)
Total distributions from net investment income		(3,566,752	)		(4,059,693	)
Share transactions–net:
Series I		85,833,062			(27,025,327	)
Series II		19,990,978			(17,414,065	)
Net increase (decrease) in net assets resulting from share transactions		105,824,040			(44,439,392	)
Net increase (decrease) in net assets		91,363,113			(25,829,828	)
Net assets:
Beginning of year		230,911,613			256,741,441
End of year (includes undistributed net investment income of $6,604,125 and $3,539,933, respectively)	$	322,274,726		$	230,911,613

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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 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.
	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. Dividend 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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.

Invesco V.I. Dividend Growth 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.	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 Daily Net Assets	Rate
First $250 million		0	.545%
Next $750 million		0	.42%
Next $1 billion		0	.395%
Over $2 billion		0	.37%

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

  The Adviser has contractually agreed, through at least June 30, 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, including litigation expenses; 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

Invesco V.I. Dividend Growth Fund

mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012. The Advisor 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, 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.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $18,200.

  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, 2011, Invesco was paid $79,358 for accounting and fund administrative services and reimbursed $218,848 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, Invesco Ltd., 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, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	306,707,036	$	10,825,854	$	—	$	317,532,890

NOTE 4—Derivative Investments

Effect of Derivative Instruments for the year ended December 31, 2011

The table below summarizes the gains 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
Change in Unrealized Appreciation (Depreciation)
Currency risk	$	235

Invesco V.I. Dividend Growth Fund

NOTE 5—Security Transactions with Affiliated Funds

The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the year ended December 31, 2011, the Fund engaged in securities sales of $563,803, which resulted in net realized gains (losses) of $(185,852).

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, 2011, the Fund paid legal fees of $1,439 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010:

	2011		2010
Ordinary income	$	3,566,752	$	4,059,693

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	6,660,322
Net unrealized appreciation — investments		1,445,342
Net unrealized appreciation — other investments		72,456
Temporary book/tax differences		(56,199	)
Capital loss carryforward		(102,468,511	)
Shares of beneficial interest		416,621,316
Total net assets	$	322,274,726

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. Under these limitation rules, the Fund is limited to utilizing $71,259,646 of capital loss carryforward in the fiscal year ending December 31, 2012.

Invesco V.I. Dividend Growth Fund

  The Fund utilized $21,591,283 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, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term
December 31, 2015	$	7,857,133
December 31, 2016		42,750,790
December 31, 2017		51,860,588
	$	102,468,511

*  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 2, 2011, the date of reorganizations of Invesco V.I. Financial Services Fund and Invesco V.I. Select Dimensions Dividend Growth Fund into the Fund are realized on securities held in each fund at such date of reorganizations, the capital loss carryforward may be further limited for up to five years from the date of the reorganizations.

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, 2011 was $95,771,046 and $87,457,474, 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	$	24,738,552
Aggregate unrealized (depreciation) of investment securities		(23,293,210	)
Net unrealized appreciation of investment securities	$	1,445,342
Cost of investments for tax purposes is $316,087,548.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of capital loss carryforward transactions on December 31, 2011, undistributed net investment income was increased by $93,665, undistributed net realized gain (loss) was increased by $51,432,237 and shares of beneficial interest decreased by $51,525,902. Further, primarily as a result of capital loss carryforward acquired in the reorganization of Invesco V.I. Financial Services Fund and Invesco V.I. Select Dimensions Dividend Growth Fund into the Fund, undistributed net investment income was decreased by $28,960, undistributed net realized gain (loss) was decreased by $74,020,269 and shares of beneficial interest increased by $74,049,229. These reclassifications had no effect on the net assets of the Fund.

Invesco V.I. Dividend Growth Fund

NOTE 11—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		600,069		$	8,253,518			42,162		$	556,286
Series II		243,810			3,335,950			41,409			523,697
Issued as reinvestment of dividends:
Series I		195,688			2,886,405			254,971			3,255,974
Series II		46,157			680,347			63,037			803,719
Issued in connection with acquisitions:(b)
Series I		8,156,451			124,094,426			—			—
Series II		2,222,881			33,755,005			—			—
Reacquired:
Series I		(3,485,401	)		(49,401,287	)		(2,334,157	)		(30,837,587	)
Series II		(1,246,445	)		(17,780,324	)		(1,409,722	)		(18,741,481	)
Net increase (decrease) in share activity		6,733,210		$	105,824,040			(3,342,300	)	$	(44,439,392	)

(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 Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

(b)

As of the opening of business on May 2, 2011, the Fund acquired all of the net assets of Invesco V.I. Financial Services Fund and Invesco V.I. Select Dimensions Dividend Growth Fund (the “Target Funds”) pursuant to a plan of reorganization approved by the Trustees of the Fund on November 10, 2010 and by the shareholders of the Target Funds on April 1, 2011. The acquisition was accomplished by a tax-free exchange of 10,379,332 shares of the Fund for 11,415,021 shares outstanding of Invesco V.I. Financial Services Fund and 5,444,017 shares outstanding of Invesco V.I. Select Dimensions Dividend Growth Fund as of the close of business on April 29, 2011. Series I and Series II shares of the Target Funds were exchanged for Series I and Series II shares of the Fund based on the relative net asset value of each Target Fund to the net asset value of the Fund on the close of business, April 29, 2011. Invesco V.I. Financial Services Fund’s net assets at that date of $67,820,291, including $7,630,530 of unrealized appreciation and Invesco V.I. Select Dimensions Dividend Growth Fund’s net assets at that date of $90,029,140, including $12,545,232 of unrealized appreciation were combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $235,469,889 and $393,319,320 immediately after the acquisition.

  The pro forma results of operations for the year ended December 31, 2011, assuming the reorganization had been completed on January 1, 2011, the beginning of the annual reporting period are as follows:

Net investment income	$	6,976,767
Net realized/unrealized gains (losses)		(6,722,411	)
Change in net assets resulting from operations	$	254,356

  The combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of each Target Fund that has been included in the Fund’s Statement of Operations since May 2, 2011.

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
					Net gains																expenses			expenses
					(losses) on																to average			to average net			Ratio of net
	Net asset				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 12/31/11	$	14.24	$	0.31	$	(0.27	)	$	0.04		$	(0.24	)	$	14.04		0.20	%	$	253,850		0.66	%(d)		0.67	%(d)		2.24	%(d)		38	%
Year ended 12/31/10		13.13		0.21		1.14			1.35			(0.24	)		14.24		10.48			179,518		0.68			0.79			1.59			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
Series II
Year ended 12/31/11		14.20		0.28		(0.28	)		0.00			(0.20	)		14.00		(0.06	)		68,424		0.91	(d)		0.92	(d)		1.99	(d)		38
Year ended 12/31/10		13.09		0.19		1.12			1.31			(0.20	)		14.20		10.20			51,394		0.93			1.04			1.34			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

(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. For the period ending December 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $134,975,378 and sold of $57,441,776 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco V.I. Select Dimensions Dividend Growth Fund and Invesco V.I. Financial Services Fund into the Fund.
(d)	Ratios are based on average daily net assets (000’s) of $236,795 and $64,764 for Series I and Series II shares, respectively.

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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, the results of its operations for the year then ended, the changes in its net assets and the financial highlights for each of the two 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. 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 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	940.40	$	3.23	$	1,021.88	$	3.36		0.66	%
Series II		1,000.00		939.00		4.45		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, 2011 through December 31, 2011, 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, 2011:

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. Dividend Growth Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. Dividend Growth Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. Dividend Growth Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. Dividend Growth Fund

Invesco V.I. Global Health Care Fund
Annual Report to Shareholders§ December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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

For the year ended December 31, 2011, Invesco V.I. Global Health Care Fund, excluding variable product issuer charges, outperformed the Fund’s broad market index, the MSCI World Index, but underperformed the Fund’s style-specific benchmark, the MSCI World Health Care Index. The Fund’s relative results were largely attributable to holdings in the pharmaceuticals industry, which underperformed those within the style-specific benchmark. The Fund’s life sciences tools and services holdings and its cash position also detracted from relative results. Managed health care stocks made the largest contribution to results on both a relative and absolute basis.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares		3.95	%
Series II Shares		3.72
MSCI World Index▼ (Broad Market Index)		-5.54
MSCI World Health Care Index▼ (Style-Specific Index)		9.46
Lipper VUF Health/Biotechnology Funds Category Average▼ (Peer Group)	7.48

Source(s): ^▼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; potentially sustainable revenue growth; the 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 on 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-taxes-depreciation-and

amortization (EBITDA); discounted cash flow analysis; and sum of parts analysis.

     The resulting target portfolio typically consists of 50-80 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 consider selling a security 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

The year began with equity markets fueled on the second round of “quantitative easing” by the U.S. Federal Reserve. Markets rose through the first quarter of 2011. Thereafter, volatility drastically increased due to civil unrest in Egypt and Libya and the devastating earthquake and tsunami in Japan. Corporate earnings were largely positive, but often overshadowed by investor concerns about continuing high unemployment, weak consumer spending and soft housing data. At the same time, the sovereign debt crisis intensified in the eurozone and growth in developed economies slowed, weighing on investor sentiment and prompting fears of a global recession. Despite signs of sustained but muted growth, these macroeconomic factors continued to weigh on markets through the end of the reporting period.

     In this environment, major domestic equity indexes delivered mixed returns for the year. The MSCI World Index produced a negative return for the year, with six out of 10 sectors posting losses.¹ The health care sector, however, had the highest return among the sectors.¹

Portfolio Composition

By country

United States	67.5	%
Switzerland	7.9
Ireland	6.2
Germany	3.9
Israel	2.5
Brazil	2.3
United Kingdom	2.1
Countries Each Less Than 2% of Portfolio	3.2
Money Market Funds
Plus Other Assets Less Liabilities	4.4

Top 10 Equity Holdings*

1.	Roche Holding AG	4.2	%
2.	Gilead Sciences, Inc.	4.0
3.	CVS Caremark Corp.	3.4
4.	Thermo Fisher Scientific, Inc.	3.3
5.	BioMarin Pharmaceutical Inc.	2.9
6.	Aetna Inc.	2.7
7.	UnitedHealth Group Inc.	2.7
8.	Novartis AG-ADR	2.7
9.	Abbott Laboratories	2.7
10.	Bayer AG	2.6

Top Five Industries

1.	Pharmaceuticals	25.9	%
2.	Biotechnology	18.4
3.	Managed Health Care	15.5
4.	Health Care Equipment	10.5
5.	Health Care Services	6.3

Total Net Assets	$141.9 million
Total Number of Holdings*		60

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 largest contributor to Fund results during the reporting period was Pharmasset, a biotechnology company whose primary focus is the development of oral therapeutics for the treatment of hepatitis C. While the company has no products currently on the market, a number of its experimental-stage oral treatments have produced encouraging results and helped increase the company’s share price. In the third quarter of 2011, the Food and Drug Administration (FDA) granted “fast track” designation to one of the company’s antiviral drug candidates, PSI-938, which may expedite its development and speed up a possible review. In September, Pharmasset released promising data on the ability of one of its other drugs to suppress hepatitis C infections. Both events sent shares of the company higher.

     Biogen Idec was another contributor to Fund performance for the year. The company develops and markets therapeutics in the areas of neurology, immunology, hemophilia and oncology. In recent years, the company has embarked on a restructuring initiative to cut costs and focus on its unique expertise in developing treatments for multiple sclerosis (MS). The company has delivered better-than-expected revenue growth due largely to its newest MS drug, Tysabri. During the period, Biogen Idec released strong positive results in the Phase III clinical trial of its experimental MS drug, BG-12, increasing the likelihood of FDA approval. Shares of the company rose sharply following the announcement.

     Hospira, which manufactures generic injectable pharmaceuticals and medication-management devices, was the largest detractor from Fund results. The company has faced headwinds related to quality issues with its North Carolina manufacturing facilities. The company is addressing these issues, but they have proven costlier than anticipated, which has depressed earnings in the short term. We eliminated this stock from the Fund during the reporting period.

     Another detractor from Fund performance for the reporting period was Teva Pharmaceutical, the world’s largest generic drug maker. Teva also operates in the branded drug market, and the stock’s weak performance was partly due to concerns about the upcoming patent expiration of its largest branded drug, Copaxone, in 2013. Shares were also hurt when Teva reported that its MS drug, Laquinimod, failed to meet a critical goal for reducing relapse rates in its

Phase III trial. Despite this outcome, the company has submitted applications to U.S. and European regulatory authorities seeking approval of the drug; it has stated that it expects FDA approval by early 2012. We felt the market overreacted to these issues and we used the opportunity to increase our investment in the company.

     The Fund held derivative instruments in the form of currency futures contracts in order to hedge our European currency exposure. The net cumulative effect of these derivative contracts was positive for overall Fund performance during the 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 pharmaceutical stocks because many firms face looming patent expirations with limited drug pipelines, which may result in modest (if any) earnings growth.

     At the close of the reporting period, we continued to emphasize specialty pharmaceuticals and biotechnology stocks based on their generally robust in-line portfolios, compelling pipelines and because many of these companies could be targets of ongoing consolidation. The Fund was primarily invested in U.S. stocks, where we found more companies that fit our fundamental selection criteria. The international allocation was focused mainly on European large-cap pharmaceutical companies that have fewer patent expiration concerns than their U.S. counterparts.

     As always, thank you for your continued investment in Invesco V.I. Global Health Care Fund.

1 Source: 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.

Derek Taner
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Global Health Care Fund. Mr. Taner joined Invesco in 2005. Mr. Taner earned a B.S. in business administration and an M.B.A. from the Haas School of Business at the University of California at 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(es)

Fund and index data from 12/31/01*

1 Source: Lipper Inc.

* During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (5/21/97)		6.44	%
10	Years	2.80
5	Years	2.21
1	Year	3.95
Series II Shares
10	Years	2.54	%
5	Years	1.96
1	Year	3.72

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 1.12% 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. 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, 2011, 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

Developing markets securities risk. 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.

     Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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.

     Health care sector risk. The Fund’s performance is vulnerable to factors affecting the health care industry, including government regulation, obsolescence caused by scientific advances and technological innovations.

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

     Market risk. 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.

     Synthetic securities risk. 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. These instruments may be subject to counterparty risk and liquidity risk.

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 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. Global Health Care Fund

Schedule of Investments^(a)

December 31, 2011

	Shares		Value
Common Stocks & Other Equity Interests–95.63%
Biotechnology–18.35%
Actelion Ltd. (Switzerland)(b)		39,679	$	1,356,882
Amarin Corp. PLC–ADR (United Kingdom)(b)		251,726		1,885,428
Biogen Idec Inc.(b)		23,529		2,589,367
BioMarin Pharmaceutical Inc.(b)		119,610		4,112,192
Celgene Corp.(b)		33,695		2,277,782
Gilead Sciences, Inc.(b)		137,469		5,626,606
Incyte Corp.(b)		139,437		2,092,949
Medivation Inc.(b)		25,811		1,190,145
Onyx Pharmaceuticals, Inc.(b)		36,039		1,583,914
Pharmasset, Inc.(b)		13,816		1,771,211
United Therapeutics Corp.(b)		32,888		1,553,958
				26,040,434
Drug Retail–4.15%
CVS Caremark Corp.		119,213		4,861,506
Raia Drogasil S.A. (Brazil)		148,860		1,034,237
				5,895,743
Health Care Distributors–2.58%
McKesson Corp.		46,899		3,653,901
Health Care Equipment–10.55%
Baxter International Inc.		64,753		3,203,978
CareFusion Corp.(b)		56,767		1,442,449
Covidien PLC (Ireland)		73,204		3,294,912
DexCom Inc.(b)		91,485		851,725
Hologic, Inc.(b)		138,056		2,417,361
MAKO Surgical Corp.(b)		39,385		992,896
Olympus Corp. (Japan)		98,500		1,295,581
Wright Medical Group, Inc.(b)		89,359		1,474,424
				14,973,326
Health Care Facilities–3.10%
Assisted Living Concepts Inc.–Class A		62,920		936,879
Rhoen-Klinikum AG (Germany)		101,257		1,929,158
Universal Health Services, Inc.–Class B		39,598		1,538,778
				4,404,815
Health Care Services–6.27%
DaVita, Inc.(b)		45,574		3,454,965
Express Scripts, Inc.(b)		40,201		1,796,582
Medco Health Solutions, Inc.(b)		24,770		1,384,643
Quest Diagnostics Inc.		38,879		2,257,315
				8,893,505
Health Care Supplies–0.58%
Meridian Bioscience, Inc.		44,039		829,695
Health Care Technology–3.10%
Allscripts Healthcare Solutions, Inc.(b)		110,436		2,091,658
Cerner Corp.(b)		37,696		2,308,880
				4,400,538
Life Sciences Tools & Services–4.86%
Life Technologies Corp.(b)		56,766		2,208,765
Thermo Fisher Scientific, Inc.(b)		104,215		4,686,549
				6,895,314
Managed Health Care–15.51%
Aetna Inc.		90,961		3,837,645
AMERIGROUP Corp.(b)		24,512		1,448,169
Amil Participacoes S.A. (Brazil)(c)		133,900		1,178,475
Aveta, Inc.(b)(c)		122,652		1,042,542
CIGNA Corp.		49,320		2,071,440
Health Net Inc.(b)		73,072		2,222,850
Humana Inc.		32,981		2,889,465
UnitedHealth Group Inc.		75,182		3,810,224
WellPoint, Inc.		53,096		3,517,610
				22,018,420
Pharmaceuticals–25.89%
Abbott Laboratories		66,902		3,761,899
Bayer AG (Germany)		57,423		3,671,536
EastPharma Ltd. REGS-GDR (Turkey)(b)(c)		109,515		98,563
Elan Corp. PLC–ADR (Ireland)(b)		132,537		1,821,058
Hikma Pharmaceuticals PLC (United Kingdom)		119,052		1,143,083
MAP Pharmaceuticals Inc.(b)		54,176		713,498
Medicis Pharmaceutical Corp.–Class A		55,616		1,849,232
Nippon Shinyaku Co., Ltd. (Japan)		116,000		1,433,793
Novartis AG–ADR (Switzerland)		66,353		3,793,401
Pfizer Inc.		160,703		3,477,613
Pharmstandard–GDR (Russia)(b)(c)		23,450		330,645
Roche Holding AG (Switzerland)		35,416		5,990,106
Sanofi–ADR (France)		38,905		1,421,589
Shire PLC–ADR (United Kingdom)		22,669		2,355,309
Teva Pharmaceutical Industries Ltd.–ADR (Israel)		89,331		3,605,399
Warner Chilcott PLC–Class A (Ireland)(b)		84,075		1,272,055
				36,738,779

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

Invesco V.I. Global Health Care Fund

	Shares		Value
Research & Consulting Services–0.69%
Qualicorp S.A. (Brazil)(b)(c)		109,000	$	978,011
Total Common Stocks & Other Equity Interests (Cost $124,708,978)				135,722,481
Money Market Funds–4.22%
Liquid Assets Portfolio–Institutional Class(d)		2,991,745		2,991,745
Premier Portfolio–Institutional Class(d)		2,991,745		2,991,745
Total Money Market Funds (Cost $5,983,490)				5,983,490
TOTAL INVESTMENTS–99.85% (Cost $130,692,468)				141,705,971
OTHER ASSETS LESS LIABILITIES–0.15%				217,870
NET ASSETS–100.00%			$	141,923,841

Investment Abbreviations:

ADR	– American Depositary Receipt
GDR	– Global Depositary Receipt
REGS	– Regulation S

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, 2011 was $3,628,236, which represented 2.56% 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. Global Health Care Fund

Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $124,708,978)	$	135,722,481
Investments in affiliated money market funds, at value and cost		5,983,490
Total investments, at value (Cost $130,692,468)		141,705,971
Receivable for:
Fund shares sold		52,870
Dividends		164,326
Foreign currency contracts outstanding		336,420
Investment for trustee deferred compensation and retirement plans		21,878
Total assets		142,281,465
Liabilities:
Payable for:
Fund shares reacquired		156,684
Accrued fees to affiliates		107,628
Accrued other operating expenses		40,698
Trustee deferred compensation and retirement plans		52,614
Total liabilities		357,624
Net assets applicable to shares outstanding	$	141,923,841
Net assets consist of:
Shares of beneficial interest	$	145,930,223
Undistributed net investment income (loss)		(50,444	)
Undistributed net realized gain (loss)		(15,310,532	)
Unrealized appreciation		11,354,594
	$	141,923,841
Net Assets:
Series I	$	114,476,135
Series II	$	27,447,706
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		6,590,040
Series II		1,615,886
Series I:
Net asset value per share	$	17.37
Series II:
Net asset value per share	$	16.99

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $119,460)	$	1,689,153
Dividends from affiliated money market funds (includes securities lending income of $43,364)		51,067
Total investment income		1,740,220
Expenses:
Advisory fees		1,142,861
Administrative services fees		426,480
Custodian fees		21,156
Distribution fees — Series II		67,554
Transfer agent fees		39,202
Trustees’ and officers’ fees and benefits		23,911
Other		54,313
Total expenses		1,775,477
Less: Fees waived		(10,456	)
Net expenses		1,765,021
Net investment income (loss)		(24,801	)
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		6,777,035
Foreign currencies		(73,982	)
Foreign currency contracts		(242,692	)
		6,460,361
Change in net unrealized appreciation (depreciation) of:
Investment securities		(1,688,331	)
Foreign currencies		(2,128	)
Foreign currency contracts		313,740
		(1,376,719	)
Net realized and unrealized gain		5,083,642
Net increase in net assets resulting from operations	$	5,058,841

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, 2011 and 2010

	2011			2010
Operations:
Net investment income (loss)	$	(24,801	)	$	(352,936	)
Net realized gain		6,460,361			6,635,670
Change in net unrealized appreciation (depreciation)		(1,376,719	)		672,232
Net increase in net assets resulting from operations		5,058,841			6,954,966
Share transactions–net:
Series I		(14,012,631	)		(24,973,014	)
Series II		373,177			(1,847,042	)
Net increase (decrease) in net assets resulting from share transactions		(13,639,454	)		(26,820,056	)
Net increase (decrease) in net assets		(8,580,613	)		(19,865,090	)
Net assets:
Beginning of year		150,504,454			170,369,544
End of year (includes undistributed net investment income (loss) of $(50,444) and $(41,772), respectively)	$	141,923,841		$	150,504,454

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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. 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. Global Health Care 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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. Global Health Care 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.	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 affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
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 Daily Net Assets	Rate
First $250 million		0	.75%
Next $250 million		0	.74%
Next $500 million		0	.73%
Next $1.5 billion		0	.72%
Next $2.5 billion		0	.71%
Next $2.5 billion		0	.70%
Next $2.5 billion		0	.69%
Over $10 billion		0	.68%

Invesco V.I. Global Health Care Fund

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide 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, 2013, 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, including litigation expenses; 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, 2013. 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, 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 (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $10,456.

  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, 2011, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $376,480 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, IIS and/or IDI.

NOTE 3—Additional Valuation Information

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

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

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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, 2011, there were no significant transfers between investment levels.

Invesco V.I. Global Health Care Fund

	Level 1		Level 2		Level 3		Total
Equity Securities	$	131,842,714	$	9,863,257	$	—	$	141,705,971
Foreign Currency Contracts*		—		336,420		—		336,420
Total Investments	$	131,842,714	$	10,199,677	$	—	$	142,042,391

*  Unrealized appreciation.

NOTE 4—Derivative Investments

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, 2011:

	Value
Risk Exposure/Derivative Type	Assets		Liabilities
Currency risk
Foreign Currency Contracts(a)	$	336,420	$	—

^(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, 2011

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 (Loss)
Currency risk	$	(242,692	)
Change in Unrealized Appreciation
Currency risk		313,740
Total	$	71,048

*  The average notional value of foreign currency contracts outstanding during the period was $6,220,419.

Open Foreign Currency Contracts
Settlement		Contract to				Notional		Unrealized
Date	Counterparty	Deliver		Receive		Value		Appreciation
02/10/12	Citibank Capital	CHF	2,900,000	USD	3,241,165	$	3,090,153	$	151,012
02/10/12	Citibank Capital	EUR	2,200,000	USD	3,033,910		2,848,502		185,408
Total open foreign currency contracts								$	336,420

Currency Abbreviations:
CHF	– Swiss Franc
EUR	– Euro
USD	– U.S. Dollar

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, 2011, the Fund paid legal fees of $1,311 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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

Invesco V.I. Global Health Care Fund

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, 2011 and 2010:

There were no ordinary income or long term capital gain distributions paid during the years ended December 31, 2011 and 2010.

Tax Components of Net Assets at Period-End:

	2011
Net unrealized appreciation — investments	$	11,009,904
Net unrealized appreciation — other investments		4,671
Temporary book/tax differences		(50,444	)
Capital loss carryforward		(14,970,513	)
Shares of beneficial interest		145,930,223
Total net assets	$	141,923,841

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund utilized $6,826,503 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, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term		Long-Term		Total
December 31, 2017	$	14,970,513	$	—	$	14,970,513

*  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, 2011 was $61,223,176 and $75,700,042, 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	$	19,790,306
Aggregate unrealized (depreciation) of investment securities		(8,780,402	)
Net unrealized appreciation of investment securities	$	11,009,904
Cost of investments for tax purposes is $130,696,067.

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, 2011, undistributed net investment income (loss) was increased by $16,129, undistributed net realized gain (loss) was increased by $73,981 and shares of beneficial interest decreased by $90,110. This reclassification had no effect on the net assets of the Fund.

Invesco V.I. Global Health Care Fund

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		1,299,440		$	23,576,064			1,324,865		$	21,365,905
Series II		275,720			4,760,125			218,080			3,429,179
Reacquired:
Series I		(2,157,315	)		(37,588,695	)		(2,928,835	)		(46,338,919	)
Series II		(251,096	)		(4,386,948	)		(340,143	)		(5,276,221	)
Net increase (decrease) in share activity		(833,251	)	$	(13,639,454	)		(1,726,033	)	$	(26,820,056	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 64% of the outstanding shares of the Fund. 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 Fund 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 12/31/11	$	16.71	$	0.00		$	0.66		$	0.66		$	—		$	—		$	—		$	17.37		3.95	%	$	114,476		1.11	%(d)		1.12	%(d)		0.03	%(d)		42	%
Year ended 12/31/10		15.87		(0.03	)		0.87			0.84			—			—			—			16.71		5.29			124,441		1.11			1.12			(0.18	)		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
Series II
Year ended 12/31/11		16.38		(0.04	)		0.65			0.61			—			—			—			16.99		3.72			27,448		1.36	(d)		1.37	(d)		(0.22	)(d)		42
Year ended 12/31/10		15.60		(0.07	)		0.85			0.78			—			—			—			16.38		5.00			26,063		1.36			1.37			(0.43	)		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

(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 $125,360 and $27,022 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 Health Care 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 Health Care Fund (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	907.50	$	5.43	$	1,019.51	$	5.75		1.13	%
Series II		1,000.00		906.60		6.63		1,018.25		7.02		1.38

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. Global Health Care Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. Global Health Care Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. Global Health Care Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. Global Health Care Fund

Invesco V.I. Global Real Estate Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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

For the year ended December 31, 2011, investors generally favored U.S. securities over international securities as the European debt crisis remained at the forefront of investor concerns. Despite stronger U.S. real estate securities performance, global real estate securities delivered negative returns during the reporting period, under-performing the broad market. Similarly, Invesco V.I. Global Real Estate Fund also delivered negative returns for the reporting period and underperformed the Fund’s broad market index, the MSCI World Index. 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 in select countries, including Japan and Australia.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	-6.51	%
Series II Shares	-6.73
MSCI World Index▼ (Broad Market Index)	-5.54
FTSE EPRA/NAREIT Developed Real Estate Index■ (Style-Specific Index)	-5.82
Lipper VUF Real Estate Funds Category Average▼ (Peer Group)	2.04

Source(s): ^▼Lipper Inc.; ^■ Invesco, Bloomberg L.P.

How we invest

Your Fund holds primarily 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.

Portfolio Composition

By country

United States	48.0	%
Hong Kong	11.3
Japan	8.5
Australia	8.3
United Kingdom	4.9
Canada	4.3
France	3.7
Singapore	3.6
Countries each less than 2.0% of portfolio	5.5
Money Market Funds Plus Other Assets
Less Liabilities	1.9

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.	Simon Property Group, Inc.	4.9	%
2.	Sun Hung Kai Properties Ltd.	3.3
3.	Ventas, Inc.	2.6
4.	Westfield Group	2.5
5.	HCP, Inc.	2.3
6.	Unibail-Rodamco S.E.	2.3
7.	Mitsubishi Estate Co. Ltd.	2.2
8.	Equity Residential	2.1
9.	Boston Properties, Inc.	2.1
10.	Prologis, Inc.	2.1

Total Net Assets	$196.6 million
Total Number of Holdings*	127

Market conditions and your Fund

Equity markets were highly volatile during the year as investors weighed the competing issues of improved corporate profits, soft macroeconomic data and sovereign debt issues in Europe. In the U.S., corporate earnings increased, but often were overshadowed by concerns about high unemployment and a lack of consumer confidence. After generally rising through July, major equity indexes sold off precipitously in August. At the same time, the U.S. received the first-ever downgrade to its credit rating from Standard & Poor’s, while the euro-zone’s sovereign debt concerns prompted fears of a “double-dip” recession. Equity markets rebounded in the fourth quarter of 2011, despite a lack of meaningful resolutions to improve the global economy. Ultimately, major international and global equity indexes produced negative returns for the year, and six of the 10 market sectors of the MSCI World Index posted losses.

     In this environment, global real estate securities, as measured by the FTSE EPRA/NAREIT Developed Real Estate Index, and the Fund produced losses for the year and underperformed the broad market, as measured by the MSCI World Index. The Fund’s underperformance relative to its style-specific benchmark was primarily the result of security selection in select countries, including Japan and Australia. Additionally, the Fund’s underweight exposure to Canada hurt relative performance during the year. Conversely, the Fund benefited from security selection in U.S. REITs, as well as security selection and an underweight exposure in Germany. Cash, although only a minor portion of Fund assets, also contributed positively to the Fund’s performance relative to its style-specific benchmark, given the equity market losses during the year.

     Top contributors during the year included Simon Property Group and Digital Realty Trust. Simon Property Group is one of the largest real estate companies with interests in approximately 392 retail real estate properties in North America, Europe and Asia. Demand for Digital Realty Trust, an integrated technology-related REIT, remained robust as data storage remains a priority for many companies.

Invesco V.I. Global Real Estate Fund

     Top detractors from the Fund’s performance included Sun Hung Kai Properties and Hong Kong Land. These two property companies experienced lackluster performance during the year, along with most Asian property stocks, which underperformed the style-specific benchmark. Sun Hung Kai Properties is one of the largest property companies in Hong Kong focusing on premium quality residential and commercial development. Hong Kong Land primarily owns and manages prime commercial space in Hong Kong and also develops premium properties in China and Singapore.

     At the end of 2011 and relative to our style-specific benchmark, we were modestly overweight in France, Hong Kong and Australia. Conversely, we were underweight in the U.S., Netherlands, Canada, the U.K. and Japan. We generally maintained our bias toward companies with higher quality assets, tenant rosters and flexible yet generally lower-leveraged 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 a B.B.A. in economics and finance and an 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 financial industry since 1998 and joined Invesco in 2000. 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.

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 Baylor University, an M.S. in real estate 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 1998. 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(es)

Fund and index data from 12/31/01*

* During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

Average Annual Total Returns
As of 12/31/11
Series I Shares
Inception (3/31/98)	7.42	%
10 Years	9.52
5 Years	-5.45
1 Year	-6.51
Series II Shares
10 Years	9.26	%
5 Years	-5.67
1 Year	-6.73

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. 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.

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, 2011, 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

Concentration risk. 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.

     Credit risk. 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.

     Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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.

     High yield bond (junk bond) risk. 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.

     Interest rate risk. 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.

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

     Market risk. 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.

     REIT risk/real estate risk. 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. Real estate companies, including REITs or similar structures, tend to be small and mid-cap companies and their shares may be more volatile and less liquid. The value of investments in real estate related companies may be affected by the quality of management, the ability to repay loans, the utilization of leverage and financial covenants related thereto, whether the company carries adequate insurance and environmental factors. If a real estate related company defaults, the Fund may own real estate directly, which involves the following additional risks: environmental liabilities; difficulty in valuing and selling the real estate; and economic or regulatory changes.

     Short sales risk. Short sales may cause the Fund to repurchase a security at a higher price, thereby causing a loss. As there is no limit on how much the price of the security can increase, the Fund’s exposure is unlimited.

     U.S. government obligations risk. 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.

About indexes used in this report

The MSCI World Index^SM 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 Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

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

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, 2011

	Shares		Value
Common Stocks & Other Equity Interests–98.07%
Australia–8.33%
CFS Retail Property Trust		1,008,969	$	1,738,875
Dexus Property Group		1,245,450		1,057,292
Goodman Group		2,187,009		1,272,886
GPT Group		478,322		1,501,929
Investa Office Fund		1,680,781		1,031,462
Stockland		736,278		2,402,278
Westfield Group		610,689		4,878,225
Westfield Retail Trust		981,611		2,499,939
				16,382,886
Austria–0.35%
Conwert Immobilien Invest S.E.		61,287		679,803
Canada–4.25%
Boardwalk REIT		28,992		1,435,372
Canadian REIT		18,500		642,815
Chartwell Seniors Housing REIT		155,400		1,296,525
H&R REIT		66,500		1,518,247
Primaris Retail REIT		72,600		1,468,675
RioCan REIT		76,600		1,987,179
				8,348,813
China–0.61%
Agile Property Holdings Ltd.		312,000		279,597
Country Garden Holdings Co.		938,000		351,451
Shimao Property Holdings Ltd.		348,000		297,072
Soho China Ltd.		415,000		276,253
				1,204,373
Finland–0.46%
Sponda Oyj		222,579		895,673
France–3.73%
Fonciere des Regions		7,205		461,061
Gecina S.A.		4,790		402,980
Klepierre		28,122		798,980
Mercialys		20,902		673,631
Societe Immobiliere de Location pour I’Industrie et le Commerce		5,022		487,043
Unibail-Rodamco S.E.		25,158		4,502,825
				7,326,520
Germany–0.85%
Deutsche Wohnen AG		60,793		807,695
GSW Immobilien AG(a)		30,106		871,468
				1,679,163
Hong Kong–11.29%
China Overseas Land & Investment Ltd.		1,278,301		2,136,372
China Resources Land Ltd.		758,000		1,221,837
Hang Lung Properties Ltd.		771,000		2,193,894
Henderson Land Development Co. Ltd.		232,000		1,148,663
Hongkong Land Holdings Ltd.		491,000		2,222,727
Hysan Development Co. Ltd.		207,000		678,035
Kerry Properties Ltd.		267,400		884,838
Link REIT (The)		637,000		2,345,711
Sino Land Co. Ltd.		737,600		1,050,377
Sun Hung Kai Properties Ltd.		518,000		6,465,448
Wharf Holdings Ltd. (The)		410,000		1,852,934
				22,200,836
Italy–0.09%
Beni Stabili S.p.A.		390,836		174,926
Japan–8.46%
Advance Residence Investment		175		337,763
AEON Mall Co., Ltd.		15,400		326,520
Japan Prime Realty Investment Corp.		266		626,798
Japan Real Estate Investment Corp.		111		865,610
Japan Retail Fund Investment Corp.		473		700,832
Mitsubishi Estate Co. Ltd.		291,000		4,343,395
Mitsui Fudosan Co., Ltd.		253,000		3,683,514
Nippon Building Fund Inc.		127		1,039,901
Nomura Real Estate Office Fund, Inc.		124		637,406
Sumitomo Realty & Development Co., Ltd.		151,000		2,641,328
Tokyu Land Corp.		132,000		499,246
United Urban Investment Corp.		824		934,952
				16,637,265
Malta–0.00%
BGP Holdings PLC(a)		3,053,090		0
Netherlands–0.70%
Corio N.V.		31,889		1,380,700
Norway–0.14%
Norwegian Property ASA		219,662		270,331
Singapore–3.63%
Ascendas REIT		537,000		757,562
CapitaCommercial Trust		613,000		497,669
Capitaland Ltd.		915,000		1,554,532
CapitaMall Trust		994,550		1,301,213
CapitaMalls Asia Ltd.		558,000		485,023
City Developments Ltd.		110,000		752,998
Global Logistic Properties Ltd.(a)		806,000		1,087,973

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

Invesco V.I. Global Real Estate Fund

	Shares		Value
Singapore–(continued)
Keppel Land Ltd.		139,000	$	237,136
Suntec REIT		570,000		471,602
				7,145,708
Sweden–0.92%
Castellum AB		81,113		1,002,889
Fabege AB		36,185		283,427
Wihlborgs Fastigheter AB		38,877		512,776
				1,799,092
Switzerland–1.34%
PSP Swiss Property AG(a)		8,560		715,085
Swiss Prime Site AG(a)		25,446		1,911,430
				2,626,515
United Kingdom–4.92%
Big Yellow Group PLC		139,866		531,728
British Land Co. PLC		245,144		1,753,349
Derwent London PLC		37,635		909,268
Great Portland Estates PLC		164,039		820,518
Hammerson PLC		215,569		1,200,231
Land Securities Group PLC		219,869		2,162,261
SEGRO PLC		230,844		747,667
Shaftesbury PLC		146,426		1,062,684
Unite Group PLC		185,942		483,722
				9,671,428
United States–48.00%
Acadia Realty Trust		45,241		911,154
Alexandria Real Estate Equities, Inc.		36,326		2,505,404
American Campus Communities, Inc.		32,700		1,372,092
AvalonBay Communities, Inc.		28,753		3,755,142
Boston Properties, Inc.		41,979		4,181,108
BRE Properties, Inc.		17,021		859,220
Brookfield Office Properties, Inc.		117,143		1,836,252
Camden Property Trust		25,582		1,592,224
CBL & Associates Properties, Inc.		28,700		450,590
DCT Industrial Trust Inc.		80,500		412,160
DDR Corp.		25,000		304,250
DiamondRock Hospitality Co.		117,829		1,135,872
Digital Realty Trust, Inc.		37,019		2,468,057
Douglas Emmett, Inc.		28,338		516,885
Duke Realty Corp.		142,599		1,718,318
Equity Lifestyle Properties, Inc.		13,200		880,308
Equity Residential		73,875		4,213,091
Essex Property Trust, Inc.		17,688		2,485,341
Extra Space Storage Inc.		29,358		711,344
Federal Realty Investment Trust		19,400		1,760,550
General Growth Properties, Inc.		131,587		1,976,437
HCP, Inc.		109,111		4,520,469
Health Care REIT, Inc.		67,797		3,696,970
Healthcare Realty Trust, Inc.		24,800		461,032
Hersha Hospitality Trust		83,636		408,144
Highwoods Properties, Inc.		38,800		1,151,196
Host Hotels & Resorts Inc.		268,424		3,964,622
Kilroy Realty Corp.		29,617		1,127,519
Kimco Realty Corp.		105,500		1,713,320
Macerich Co. (The)		54,140		2,739,484
Mid-America Apartment Communities, Inc.		22,500		1,407,375
National Retail Properties Inc.		54,500		1,437,710
Pebblebrook Hotel Trust		16,739		321,054
Piedmont Office Realty Trust Inc.–Class A		53,500		911,640
Prologis, Inc.		142,520		4,074,647
Public Storage		27,135		3,648,572
Regency Centers Corp.		36,200		1,361,844
Retail Opportunity Investments Corp.		67,879		803,687
Senior Housing Properties Trust		36,100		810,084
Simon Property Group, Inc.		74,884		9,655,543
SL Green Realty Corp.		17,986		1,198,587
Sovran Self Storage, Inc.		19,700		840,599
Starwood Hotels & Resorts Worldwide, Inc.		7,096		340,395
Sunstone Hotel Investors, Inc.(a)		54,500		444,175
Tanger Factory Outlet Centers, Inc.		20,000		586,400
Taubman Centers, Inc.		9,100		565,110
UDR, Inc.		66,600		1,671,660
Ventas, Inc.		91,305		5,033,645
Vornado Realty Trust		44,675		3,433,721
				94,375,003
Total Common Stocks & Other Equity Interests (Cost $178,461,404)				192,799,035
Money Market Funds–1.58%
Liquid Assets Portfolio–Institutional Class(b)		1,554,441		1,554,441
Premier Portfolio–Institutional Class(b)		1,554,441		1,554,441
Total Money Market Funds (Cost $3,108,882)				3,108,882
TOTAL INVESTMENTS–99.65% (Cost $181,570,286)				195,907,917
OTHER ASSETS LESS LIABILITIES–0.35%				694,707
NET ASSETS–100.00%			$	196,602,624

Investment Abbreviations:

REIT – Real Estate Investment Trust

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. Global Real Estate Fund

Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $178,461,404)	$	192,799,035
Investments in affiliated money market funds, at value and cost		3,108,882
Total investments, at value (Cost $181,570,286)		195,907,917
Foreign currencies, at value (Cost $18,530)		18,566
Receivable for:
Fund shares sold		240,563
Dividends		919,028
Investment for trustee deferred compensation and retirement plans		17,121
Other assets		2,209
Total assets		197,105,404
Liabilities:
Payable for:
Fund shares reacquired		268,914
Accrued fees to affiliates		155,516
Accrued other operating expenses		45,169
Trustee deferred compensation and retirement plans		33,181
Total liabilities		502,780
Net assets applicable to shares outstanding	$	196,602,624
Net assets consist of:
Shares of beneficial interest	$	228,638,434
Undistributed net investment income		(1,251,973	)
Undistributed net realized gain (loss)		(45,120,991	)
Unrealized appreciation		14,337,154
	$	196,602,624
Net Assets:
Series I	$	134,253,896
Series II	$	62,348,728
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		11,059,642
Series II		5,252,183
Series I:
Net asset value per share	$	12.14
Series II:
Net asset value per share	$	11.87

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $267,086)	$	5,511,528
Dividends from affiliated money market funds		2,511
Total investment income		5,514,039
Expenses:
Advisory fees		1,422,673
Administrative services fees		510,604
Custodian fees		115,271
Distribution fees — Series II		128,535
Transfer agent fees		25,545
Trustees’ and officers’ fees and benefits		25,721
Other		53,406
Total expenses		2,281,755
Less: Fees waived		(3,545	)
Net expenses		2,278,210
Net investment income		3,235,829
Realized and unrealized gain (loss) from:
Net realized gain from:
Investment securities		906,910
Foreign currencies		63,027
		969,937
Change in net unrealized appreciation (depreciation) of:
Investment securities		(19,896,472	)
Foreign currencies		3,944
		(19,892,528	)
Net realized and unrealized gain (loss)		(18,922,591	)
Net increase (decrease) in net assets resulting from operations	$	(15,686,762	)

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, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	3,235,829		$	4,017,480
Net realized gain		969,937			7,130,044
Change in net unrealized appreciation (depreciation)		(19,892,528	)		11,160,840
Net increase (decrease) in net assets resulting from operations		(15,686,762	)		22,308,364
Distributions to shareholders from net investment income:
Series I		(5,627,461	)		(6,161,371	)
Series II		(2,275,433	)		(1,036,283	)
Total distributions from net investment income		(7,902,894	)		(7,197,654	)
Share transactions–net:
Series I		19,582,854			(9,517,933	)
Series II		35,133,330			19,873,135
Net increase in net assets resulting from share transactions		54,716,184			10,355,202
Net increase in net assets		31,126,528			25,465,912
Net assets:
Beginning of year		165,476,096			140,010,184
End of year (includes undistributed net investment income of $(1,251,973) and $1,843,563, respectively)	$	196,602,624		$	165,476,096

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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 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 Real Estate 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. Consequently, the Fund may tend to be more volatile than other mutual funds, and the value of the Fund’s investments may tend to rise and fall more rapidly.
	Because, the Fund concentrates its assets in the real estate industry, an investment in the Fund will be closely linked to the performance of the real estate markets. Property values may fall due to increasing vacancies or declining rents resulting from economic, legal, cultural or technological developments.
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 Daily Net Assets	Rate
First $250 million		0	.75%
Next $250 million		0	.74%
Next $500 million		0	.73%
Next $1.5 billion		0	.72%
Next $2.5 billion		0	.71%
Next $2.5 billion		0	.70%
Next $2.5 billion		0	.69%
Over $10 billion		0	.68%

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management,

Invesco V.I. Global Real Estate Fund

Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide 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, 2013, 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, including litigation expenses; 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, 2013. 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, 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.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $3,545.

  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, 2011, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $460,604 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, IIS and/or IDI.

NOTE 3—Additional Valuation Information

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

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

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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. Global Real Estate Fund

  During the year ended December 31, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Australia	$	15,110,000	$	1,272,886	$	—	$	16,382,886
Austria		—		679,803		—		679,803
Canada		8,348,813		—		—		8,348,813
China		1,204,373		—		—		1,204,373
Finland		—		895,673		—		895,673
France		1,563,654		5,762,866		—		7,326,520
Germany		807,695		871,468		—		1,679,163
Hong Kong		10,464,126		11,736,710		—		22,200,836
Italy		174,926		—		—		174,926
Japan		5,642,508		10,994,757		—		16,637,265
Malta		—		—		0		0
Netherlands		—		1,380,700		—		1,380,700
Norway		270,331		—		—		270,331
Singapore		757,562		6,388,146		—		7,145,708
Sweden		283,427		1,515,665		—		1,799,092
Switzerland		1,911,430		715,085		—		2,626,515
United Kingdom		1,810,351		7,861,077		—		9,671,428
United States		97,483,885		—		—		97,483,885
Total Investments	$	145,833,081	$	50,074,836	$	0	$	195,907,917

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, 2011, the Fund paid legal fees of $1,331 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010:

	2011		2010
Ordinary income	$	7,902,894	$	7,197,654

Invesco V.I. Global Real Estate Fund

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	1,350,512
Net unrealized appreciation — investments		4,654,440
Net unrealized appreciation (depreciation) — other investments		(477	)
Temporary book/tax differences		(32,564	)
Capital loss carryforward		(38,007,721	)
Shares of beneficial interest		228,638,434
Total net assets	$	196,602,624

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. Under these limitation rules, the Fund is limited to utilizing $14,511,289 of capital loss carryforward in the fiscal year ending December 31, 2012.

  The Fund has a capital loss carryforward as of December 31, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term
December 31, 2016	$	14,993,927
December 31, 2017		22,621,345
Not Subject to expiration		392,449
	$	38,007,721

*  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, 2011 was $138,004,443 and $88,423,407, 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	$	13,921,939
Aggregate unrealized (depreciation) of investment securities		(9,267,499	)
Net unrealized appreciation of investment securities	$	4,654,440
Cost of investments for tax purposes is $191,253,477.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of passive foreign investment companies, on December 31, 2011, undistributed net investment income was increased by $1,571,529, undistributed net realized gain (loss) was decreased by $1,543,909 and shares of beneficial interest decreased by $27,620. 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,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		4,052,616		$	55,794,931			3,250,045		$	40,832,439
Series II		3,043,981			39,999,065			1,654,806			20,893,454
Issued as reinvestment of dividends:
Series I		496,249			5,627,461			477,626			6,161,371
Series II		204,994			2,275,433			81,855			1,036,283
Reacquired:
Series I		(3,169,118	)		(41,839,538	)		(4,611,903	)		(56,511,743	)
Series II		(551,566	)		(7,141,168	)		(169,623	)		(2,056,602	)
Net increase in share activity		4,077,156		$	54,716,184			682,806		$	10,355,202

^(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 Fund 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—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				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			investment			investment			realized			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		and unrealized)			operations			income			gains			distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/11	$	13.58	$	0.24	$	(1.16	)	$	(0.92	)	$	(0.52	)	$	—		$	(0.52	)	$	12.14		(6.51	)%	$	134,254		1.14	%(d)		1.14	%(d)		1.77	%(d)		47	%
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			1.20			2.82			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
Series II
Year ended 12/31/11		13.31		0.20		(1.13	)		(0.93	)		(0.51	)		—			(0.51	)		11.87		(6.73	)		62,349		1.39	(d)		1.39	(d)		1.52	(d)		47
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			1.45			2.57			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

(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 $138,276 and $51,414 for 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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, 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 audits 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, 2011 by correspondence with the custodian, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	884.70	$	5.42	$	1,019.46	$	5.80		1.14	%
Series II		1,000.00		883.60		6.60		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, 2011 through December 31, 2011, 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, 2011:

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. Global Real Estate Fund

Trustees and Officers—(continued)

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.

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.

			Number of Funds
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. Global Real Estate Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. Global Real Estate Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. Global Real Estate Fund

Invesco V.I. Government Securities Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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, 2011, Invesco V.I. Government Securities Fund underperformed the Fund’s style-specific index. The reason for this underperformance was the Fund’s duration positioning and sector allocation that favored agency mortgage-backed securities (MBS).

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	7.91	%
Series II Shares	7.63
Barclays Capital U.S. Aggregate Index▼ (Broad Market Index)	7.84
Barclays Capital U.S. Government Index▼ (Style-Specific Index)	9.02
Lipper VUF General U.S. Government Funds Index▼ (Peer Group Index)	9.17

Source(s): ^▼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.
n	The general liquidity needs of the Fund.

Market conditions and your Fund

Global financial markets were unsettled and volatile during 2011 as investors assessed and reacted to the economic implications of several global events, including the Japanese earthquake and tsunami, the U.S. debt ceiling debate, and a reinvigorated eurozone sovereign debt crisis. The U.S. economy showed signs of faltering and there was little consensus regarding the threat of U.S. inflation. However, starting in the second quarter, anxiety linked to the aforementioned

events and related concerns about global financial instability began dominating headlines and investor psyche, leading to periods of extreme risk aversion, wider credit spreads and high demand for the perceived safe haven of U.S. government bonds. By the end of the year, U.S. interest rates were pushed to near-historic lows, in spite of Standard & Poor’s credit rating downgrade of the U.S. in the third quarter.

     U.S. Treasury yields for maturities of between two and 30 years ended the year lower than at the start of the year, generating strong positive 12-month returns across government bond sectors. With inflation expectations held in check, long-term bonds outperformed short and intermediate maturities as investors were willing to extend out on the yield curve for incrementally higher returns. The broad 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, 2011. While U.S. credit spreads widened to reflect heightened systemic risks, the significant decline in rates across the yield curve created gains across most domestic bond market sectors for the year.

     The Fund allocated a significant portion of assets to agency MBS. These securities provided a higher yield than U.S. Treasury or agency debentures but gave up some average life certainty. During the year, the U.S. government made several attempts to adjust home refinancing programs, increasing MBS performance volatility. This volatility widened MBS yield spreads which had a negative impact on the Fund’s performance relative to the style specific benchmark. Our allocation to agency MBS also meant the Fund had a smaller allocation to U.S. Treasury securities and agency debentures than the benchmark.

Portfolio Composition

By security type

U.S. Government Sponsored
Mortgage-Backed Securities	73.5	%
U.S. Government Sponsored
Agency Securities	13.7
U.S. Treasury Securities	12.4
Non-U.S. Dollar Denominated
Bonds & Notes	2.6
U.S. Dollar Denominated Bonds & Notes	1.3
Money Market Funds
Plus Other Assets Less Liabilities	–3.5

Top 10 Fixed Income Issuers*

1.	Federal National Mortgage Association	22.6	%
2.	Freddie Mac REMICs	12.5
3.	Fannie Mae REMICs	12.4
4.	U.S. Treasury	12.4
5.	Federal Home Loan Mortgage Corp.	12.0
6.	Ginnie Mae REMICs	9.6
7.	Federal Agricultural Mortgage Corp.	4.5
8.	Federal Home Loan Bank	4.4
9.	Federal Farm Credit Bank	4.1
10.	Government
	National Mortgage Association	3.5

Total Net Assets	$1.3 billion
Total Number of Holdings*		922

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

     We used dollar rolls, a type of repurchase transaction in the highly liquid TBA market for agency MBS, to produce additional income for the Fund. A dollar roll involves the Fund selling MBS to a financial institution, with an agreement to repurchase a substantially similar security at an agreed upon price and date. Excess portfolio cash resulting from the use of this strategy is subsequently invested in short-term instruments to generate additional return on the portfolio.

     The Fund also uses 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 longer duration tending to be more sensitive to interest rate changes than the benchmark. The Fund’s duration and yield curve positions during the year had a modest negative effect on performance. The portfolio did own Treasury Inflation Protected Securities (TIPS) during the year. These securities pay a semiannual coupon and the principal is adjusted for changes in inflation. TIPS had a negligible effect on performance for the year. In addition, U.S. Treasury futures were an important investment tool in the management of our targeted portfolio duration and the Fund realized a small gain from the use of futures during the reporting period.

     We thank you for your investment in Invesco V.I. Government Securities 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.

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.

Brian Schneider
Chartered Financial Analyst, 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(es)

Fund and index data from 12/31/01*

1 Source: Lipper Inc.

* During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (5/5/93)		5.21	%
10	Years	4.97
5	Years	6.31
1	Year	7.91
Series II Shares
Inception (9/19/01)		4.59	%
10	Years	4.70
5	Years	6.04
1	Year	7.63

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 0.60% 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 0.76% and 1.01%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     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 June 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, 2011, 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

Derivatives risk. 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. A 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.

     Dollar roll transactions risk. 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.

     Interest rate risk. 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 risk. Leverage exists when the Fund purchases or sells an instrument or enters into a transaction without investing cash in an amount equal to the full economic exposure of the instrument or transaction and the Fund could lose more than it invested. Leverage created from borrowing or certain types of transactions or instruments, including derivatives, may impair the Fund’s liquidity, cause it to liquidate positions at an unfavorable time, increase volatility or otherwise not achieve its intended objective.

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

     Market risk. 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.

     Mortgage- and asset-backed securities risk. 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. Faster prepayments often happen when interest rates are falling. As a result, the Fund may reinvest these early payments at lower interest rates, thereby reducing the Fund’s income. Conversely, when interest rates rise, prepayments may happen more slowly, causing the security to lengthen in duration. Longer duration securities tend to be more volatile. Securities may be prepaid at a price less than the original purchase value. An unexpectedly high rate of defaults on the mortgages held by a mortgage pool may adversely affect the value of mortgage-backed securities and could result in losses to the Fund. The risk of such defaults is generally higher in the case of mortgage pools that include subprime mortgages. Subprime mortgages refer to loans made to borrowers with weakened credit histories or with lower capacity to make timely payments on their mortgages.

     Reinvestment risk. 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.

     Reverse repurchase agreement risk. 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.

     U.S. government obligations risk. 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.

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, 2011

	Principal
	Amount		Value
U.S. Government Sponsored Mortgage-Backed Securities–73.50%
Collateralized Mortgage Obligations–39.13%
Fannie Mae Grantor Trust, 5.34%, 04/25/12	$	4,500,000	$	4,544,383
Fannie Mae REMICs,
4.50%, 11/25/16 to 07/25/27		12,706,358		13,167,504
4.00%, 07/25/18 to 07/25/40		20,213,517		21,342,287
5.00%, 08/25/19 to 09/25/37		35,162,507		37,276,339
4.25%, 12/25/19 to 02/25/37		16,336,233		17,390,999
3.00%, 07/25/22 to 09/25/36		18,820,962		19,449,660
2.50%, 03/25/26		6,013,337		6,177,361
7.00%, 09/18/27		998,613		1,148,313
6.50%, 01/25/30 to 03/25/32		3,450,499		3,930,089
3.50%, 12/25/31		3,432,555		3,531,492
4.75%, 07/25/33		6,519,329		6,738,433
5.75%, 10/25/35		1,273,358		1,437,706
0.59%, 05/25/36(a)		12,877,173		12,839,762
6.58%, 06/25/39(a)		10,360,931		12,269,507
Fannie Mae Whole Loans, 5.50%, 07/25/34		956,150		973,122
Federal Home Loan Bank,
4.55%, 04/27/12		920,393		930,777
5.27%, 12/28/12		10,237,680		10,607,036
5.07%, 10/20/15		2,121,106		2,306,215
5.46%, 11/27/15		30,374,534		33,786,815
5.77%, 03/23/18		5,098,739		5,683,916
Freddie Mac REMICs,
0.85%, 03/15/13		2,725,461		2,725,907
4.75%, 07/15/14 to 05/15/23		1,779,402		1,801,464
3.50%, 10/15/16 to 12/15/27		3,359,027		3,441,550
4.38%, 05/15/17		642,150		650,738
4.16%, 07/15/17		762,928		773,790
3.77%, 09/15/17		783,328		797,912
3.84%, 09/15/17		1,099,761		1,121,312
4.50%, 10/15/17 to 10/15/36		15,634,965		16,131,172
4.00%, 12/15/17 to 03/15/38		21,554,042		22,430,372
5.00%, 02/15/18 to 09/15/32		17,432,455		18,373,846
3.00%, 10/15/18 to 04/15/26		18,390,634		19,066,053
3.75%, 10/15/18		5,910,777		6,121,914
4.25%, 01/15/19		1,263,295		1,305,666
0.68%, 04/15/28 to 06/15/37(a)		19,441,952		19,418,494
5.50%, 10/15/28 to 02/15/33		3,579,642		3,611,260
6.00%, 09/15/29		178,646		178,591
5.25%, 08/15/32		7,654,109		7,933,899
0.58%, 03/15/36(a)		12,628,318		12,613,177
5.75%, 05/15/36		1,252,389		1,314,070
0.62%, 11/15/36(a)		12,688,846		12,717,154
1.14%, 11/15/39(a)		5,815,681		5,872,528
Ginnie Mae REMICs,
6.00%, 01/16/25		2,843,803		3,171,499
5.00%, 09/16/27 to 08/16/35		5,137,001		5,504,944
4.50%, 01/16/31 to 08/20/35		59,860,077		62,593,606
5.50%, 04/16/31		642,205		643,417
4.75%, 09/20/32		2,101,089		2,210,785
4.00%, 04/16/33 to 02/20/38		28,155,374		29,458,834
5.76%, 08/20/34(a)		3,889,410		4,410,013
5.84%, 01/20/39(a)		11,564,465		13,192,470
				495,118,153
Federal Deposit Insurance Company (FDIC)–0.09%
Series 2010-S1, Class 1A, Floating Rate Pass Through Ctfs., 0.82%, 02/25/48 (Acquired 03/05/10; Cost $1,191,682)(a)(c)		1,191,682		1,190,434
Federal Home Loan Mortgage Corp. (FHLMC)–10.49%
Pass Through Ctfs.,
6.50%, 10/01/12 to 12/01/35		12,131,268		13,725,990
6.00%, 09/01/13 to 07/01/38		6,914,630		7,586,360
7.00%, 07/01/14 to 12/01/37		12,535,923		14,517,209
8.00%, 07/01/15 to 09/01/36		11,549,160		13,822,198
7.50%, 03/01/16 to 08/01/36		4,531,939		5,365,191
5.00%, 07/01/18 to 01/01/40		6,746,792		7,296,578
10.50%, 08/01/19		3,032		3,406
4.50%, 09/01/20 to 08/01/41		28,820,057		30,828,008
8.50%, 09/01/20 to 08/01/31		941,579		1,122,768
10.00%, 03/01/21		59,690		70,307
9.00%, 06/01/21 to 06/01/22		420,350		481,698
5.50%, 12/01/22 to 11/01/39		3,628,123		3,954,754
3.50%, 08/01/26		2,897,043		3,053,052
7.05%, 05/20/27		313,510		360,867
6.03%, 10/20/30		1,963,262		2,259,514
Pass Through Ctfs., ARM
2.66%, 10/01/36(a)		640,120		680,856
5.46%, 01/01/38(a)		353,577		377,304
Pass Through Ctfs., TBA, 4.00%, 01/01/42(b)		26,000,000		27,275,625
				132,781,685

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)–20.28%
Pass Through Ctfs.,
8.00%, 06/01/12 to 11/01/37	$	12,000,550	$	14,220,642
8.50%, 06/01/12 to 08/01/37		4,719,003		5,614,803
7.50%, 09/01/12 to 08/01/37		14,441,308		17,092,591
6.50%, 05/01/13 to 04/01/38		14,452,098		16,096,382
10.00%, 09/01/13		6,687		6,789
6.00%, 01/01/14 to 10/01/38		13,593,478		15,038,619
7.00%, 01/15/14 to 06/01/36		17,691,825		19,976,969
5.00%, 11/01/17 to 03/01/40		41,421,436		44,859,720
4.50%, 09/01/18 to 08/01/41		56,731,963		61,007,673
5.50%, 03/01/21 to 08/01/38		17,285,322		18,899,221
6.75%, 07/01/24		1,014,260		1,153,715
6.95%, 10/01/25		56,880		65,775
Pass Through Ctfs., ARM,
2.40%, 05/01/35(a)		1,147,538		1,209,076
4.73%, 03/01/38(a)		230,809		246,632
Pass Through Ctfs., Balloon, 3.84%, 04/01/18		6,600,000		7,153,949
Pass Through Ctfs., TBA,
4.00%, 01/01/27(b)		5,825,000		6,144,465
3.50%, 01/01/42(b)		27,000,000		27,776,250
				256,563,271
Government National Mortgage Association (GNMA)–3.51%
Pass Through Ctfs.,
6.50%, 02/20/12 to 01/15/37		11,550,301		13,217,450
8.00%, 07/15/12 to 01/15/37		3,592,484		4,250,542
6.75%, 08/15/13		11,092		11,602
7.50%, 10/15/14 to 10/15/35		6,127,808		7,081,317
11.00%, 10/15/15		1,560		1,572
9.00%, 10/20/16 to 12/20/16		79,183		80,932
7.00%, 04/15/17 to 01/15/37		4,526,272		5,257,917
10.50%, 09/15/17 to 11/15/19		3,141		3,163
8.50%, 12/15/17 to 01/15/37		673,979		776,206
10.00%, 06/15/19		26,486		29,801
6.00%, 09/15/20 to 08/15/33		1,804,608		2,041,089
5.00%, 02/15/25		758,430		850,532
6.95%, 08/20/25 to 08/20/27		695,529		803,428
6.38%, 10/20/27 to 09/20/28		703,604		799,346
6.10%, 12/20/33		7,862,012		9,176,943
				44,381,840
Total U.S. Government Sponsored Mortgage-Backed Securities (Cost $905,451,422)				930,035,383
U.S. Government Sponsored Agency Securities–13.69%
Federal Agricultural Mortgage Corp.–4.45%
Medium-Term Notes, 2.11%, 03/15/12		37,000,000		37,151,009
Sr. Unsec. Notes, 2.00%, 07/27/16		4,000,000		4,103,684
Unsec. Medium-Term Notes,
1.25%, 12/06/13		8,000,000		8,099,978
0.85%, 08/11/14		7,000,000		6,987,767
				56,342,438
Federal Farm Credit Bank (FFCB)–4.09%
Bonds,
1.13%, 02/27/14		13,000,000		13,183,863
3.00%, 09/22/14		5,000,000		5,318,910
1.63%, 11/19/14		4,800,000		4,941,364
1.50%, 11/16/15		11,000,000		11,270,116
5.75%, 01/18/22		2,775,000		2,780,811
Global Bonds, 1.38%, 06/25/13		10,000,000		10,161,764
Medium-Term Notes, 5.75%, 12/07/28		3,100,000		4,095,608
				51,752,436
Federal Home Loan Bank (FHLB)–0.40%
Unsec. Global Bonds, 1.88%, 06/21/13		5,000,000		5,119,701
Federal Home Loan Mortgage Corp. (FHLMC)–1.46%
Unsec. Global Notes,
0.63%, 12/29/14		5,000,000		5,008,170
1.75%, 09/10/15		6,500,000		6,725,893
2.00%, 08/25/16		6,500,000		6,773,388
				18,507,451
Federal National Mortgage Association (FNMA)–2.33%
Sr. Unsec. Global Notes,
2.50%, 05/15/14		4,875,000		5,104,674
0.75%, 12/19/14		10,000,000		10,049,619
Unsec. Global Notes,
3.00%, 09/16/14		7,500,000		7,988,177
2.38%, 04/11/16		6,000,000		6,351,710
				29,494,180
Financing Corp (FICO)–0.32%
Sec. Bonds, 9.80%, 04/06/18		700,000		1,031,487
Series E, Sec. Bonds, 9.65%, 11/02/18		1,985,000		2,954,139
				3,985,626
Tennessee Valley Authority (TVA)–0.64%
Global Notes, 5.50%, 07/18/17		2,420,000		2,948,953
Series A, Bonds, 6.79%, 05/23/12		5,000,000		5,130,427
				8,079,380
Total U.S. Government Sponsored Agency Securities (Cost $168,919,668)				173,281,212

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–12.42%
U.S. Treasury Notes–8.38%
0.75%, 06/15/14	$	7,000,000		$	7,075,469
2.38%, 10/31/14		450,000			475,383
0.38%, 11/15/14		20,000,000			20,015,625
2.13%, 11/30/14		150,000			157,570
2.25%, 01/31/15		3,500,000			3,697,422
1.25%, 08/31/15		3,000,000			3,080,156
2.00%, 01/31/16		1,200,000			1,266,188
1.00%, 10/31/16		9,000,000			9,087,187
0.88%, 11/30/16		8,000,000			8,025,000
2.75%, 05/31/17(d)		10,000,000			10,943,750
2.38%, 07/31/17(d)		10,000,000			10,750,000
3.13%, 05/15/21		1,000,000			1,116,563
2.13%, 08/15/21		5,000,000			5,127,344
2.00%, 11/15/21		25,000,000			25,285,156
					106,102,813
U.S. Treasury Bonds–3.02%
8.75%, 05/15/20		3,500,000			5,480,781
7.88%, 02/15/21		1,100,000			1,678,875
7.50%, 11/15/24		4,370,000			6,975,612
7.63%, 02/15/25		550,000			889,453
5.38%, 02/15/31		3,800,000			5,417,969
4.25%, 05/15/39(d)		3,685,000			4,684,556
4.38%, 11/15/39		3,000,000			3,891,563
4.63%, 02/15/40		2,700,000			3,638,672
4.75%, 02/15/41		4,000,000			5,508,125
					38,165,606
U.S. Treasury Inflation–Indexed Bonds–1.02%
0.63%, 07/15/21		12,056,880(e	)		12,895,210
Total U.S. Treasury Securities (Cost $147,379,988)					157,163,629
Foreign Bonds–2.63%
Sovereign Debt–0.38%
Israel Government Agency for International Development (AID) Bond (Israel), Gtd. Bonds, 5.13%, 11/01/24		3,800,000			4,767,548
Panama–2.25%
La Hipotecaria S.A. (Panama), Series 2010-1 GA, Class A, Floating Rate Pass Through Ctfs., 3.50%, 09/08/39 (Acquired 11/05/10; Cost $28,363,176)(a)(c)		27,453,770			28,448,968
Total Foreign Bonds (Cost $32,171,695)					33,216,516
Corporate Bonds and Notes–1.29%
Diversified Banks–0.52%
Ally Financial, Inc., Gtd. Notes, 2.20%, 12/19/12		1,700,000			1,733,105
Citibank N.A., Sr. Unsec. Gtd. Notes, 1.75%, 12/28/12		2,500,000			2,537,418
U.S. Central Federal Credit Union, Unsec. Gtd. Notes, 1.90%, 10/19/12		2,260,000			2,291,123
					6,561,646
Industrial Conglomerates–0.22%
General Electric Capital Corp., Series G, Sr. Unsec. Gtd. Medium-Term Global Notes, 2.63%, 12/28/12		2,800,000			2,867,554
Private Export Funding Corp.–0.55%
Sec. Gtd. Notes,
2.13%, 07/15/16		5,000,000			5,178,164
4.30%, 12/15/21		1,540,000			1,770,426
					6,948,590
Total Corporate Bonds and Notes (Cost $15,817,224)					16,377,790
	Shares
Money Market Funds–1.11%
Government & Agency Portfolio–Institutional Class (Cost $13,989,842)(f)		13,989,842			13,989,842
TOTAL INVESTMENTS–104.64% (Cost $1,283,729,839)					1,324,064,372
OTHER ASSETS LESS LIABILITIES–(4.64)%					(58,717,799	)
NET ASSETS–100.00%				$	1,265,346,573

Investment Abbreviations:

ARM	– Adjustable Rate Mortgage
Ctfs.	– Certificates
Gtd.	– Guaranteed
REMIC	– Real Estate Mortgage Investment Conduits
Sec.	– Secured
Sr.	– Senior
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, 2011.
(b)	Security purchased on a forward commitment basis. This security is subject to dollar roll transactions. See Note 1J.
(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, 2011 was $29,639,402, which represented 2.34% of the Fund’s Net Assets.
(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)	Principal amount of security and interest payments are adjusted for inflation.
(f)	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, 2011

Assets:
Investments, at value (Cost $1,269,739,997)	$	1,310,074,530
Investments in affiliated money market funds, at value and cost		13,989,842
Total investments, at value (Cost $1,283,729,839)		1,324,064,372
Cash		64,336
Receivable for:
Variation margin		967,485
Fund shares sold		299,336
Dividends and interest		4,703,424
Principal paydowns		150,077
Investment for trustee deferred compensation and retirement plans		59,953
Other assets		19,641
Total assets		1,330,328,624
Liabilities:
Payable for:
Investments purchased		60,823,351
Fund shares reacquired		2,869,605
Accrued fees to affiliates		1,009,587
Accrued other operating expenses		91,885
Trustee deferred compensation and retirement plans		187,623
Total liabilities		64,982,051
Net assets applicable to shares outstanding	$	1,265,346,573
Net assets consist of:
Shares of beneficial interest	$	1,198,490,336
Undistributed net investment income		35,365,149
Undistributed net realized gain		(10,184,603	)
Unrealized appreciation		41,675,691
	$	1,265,346,573
Net Assets:
Series I	$	970,028,967
Series II	$	295,317,606
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		77,641,599
Series II		23,829,742
Series I:
Net asset value per share	$	12.49
Series II:
Net asset value per share	$	12.39

Statement of Operations

For the year ended December 31, 2011

Investment income:
Interest	$	33,067,104
Dividends from affiliated money market funds		5,182
Total investment income		33,072,286
Expenses:
Advisory fees		5,702,112
Administrative services fees		3,324,390
Custodian fees		65,041
Distribution fees — Series II		511,963
Transfer agent fees		29,622
Trustees’ and officers’ fees and benefits		74,352
Other		129,421
Total expenses		9,836,901
Less: Fees waived and expense offset arrangement(s)		(1,429,118	)
Net expenses		8,407,783
Net investment income		24,664,503
Realized and unrealized gain from:
Net realized gain from:
Investment securities		5,705,758
Futures contracts		45,162,306
		50,868,064
Change in net unrealized appreciation of:
Investment securities		15,226,003
Futures contracts		7,923,699
		23,149,702
Net realized and unrealized gain		74,017,766
Net increase in net assets resulting from operations	$	98,682,269

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, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	24,664,503		$	23,688,971
Net realized gain		50,868,064			32,820,078
Change in net unrealized appreciation		23,149,702			7,306,223
Net increase in net assets resulting from operations		98,682,269			63,815,272
Distributions to shareholders from net investment income:
Series I		(36,635,024	)		(54,918,096	)
Series II		(1,001,427	)		(859,253	)
Total distributions from net investment income		(37,636,451	)		(55,777,349	)
Share transactions–net:
Series I		(145,217,239	)		(128,842,349	)
Series II		253,038,769			9,854,940
Net increase (decrease) in net assets resulting from share transactions		107,821,530			(118,987,409	)
Net increase (decrease) in net assets		168,867,348			(110,949,486	)
Net assets:
Beginning of year		1,096,479,225			1,207,428,711
End of year (includes undistributed net investment income of $35,365,149 and $37,474,465, respectively)	$	1,265,346,573		$	1,096,479,225

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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. 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”).

Invesco V.I. Government Securities 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.
	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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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

Invesco V.I. Government Securities 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 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 Rolls and Forward Commitment Transactions — The Fund may enter into dollar roll transactions to enhance the Fund’s performance. The Fund executes its dollar roll transactions in the to be announced (“TBA”) market whereby the Fund makes a forward commitment to purchase a security and, instead of accepting delivery, the position is offset by the sale of the security with a simultaneous agreement to repurchase at a future date.
	The Fund accounts for dollar roll transactions as purchases and sales and realizes gains and losses on these transactions. These transactions increase the Fund’s portfolio turnover rate. The Fund will segregate liquid assets in an amount equal to its dollar roll commitments. Dollar roll transactions are considered borrowings under the 1940 Act.
	Dollar roll transactions involve the risk that a counter-party to the transaction may fail to complete the transaction. If this occurs, the Fund may lose the opportunity to purchase or sell the security at the agreed upon price. Dollar rolls transactions also involve the risk that the value of the securities retained by the Fund may decline below the price of the securities that the Fund has sold but is obligated to purchase under the agreement.
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 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.

Invesco V.I. Government Securities Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

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

Average Daily Net Assets	Rate
First $250 million		0	.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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective May 2, 2011, 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. Prior to May 2, 2011, the Adviser had contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I to 0.73% and Series II 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, including litigation expenses; 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.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $1,428,955.

  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, 2011, Invesco was paid $295,052 for accounting and fund administrative services and reimbursed $3,029,338 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, Invesco Ltd., 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. Government Securities Fund

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	13,989,842	$	—	$	—	$	13,989,842
U.S. Treasury Securities		—		157,163,629		—		157,163,629
U.S. Government Sponsored Securities		—		1,103,316,595		—		1,103,316,595
Corporate Debt Securities		—		16,377,790		—		16,377,790
Foreign Debt Securities		—		28,448,968		—		28,448,968
Foreign Sovereign Debt Securities		—		4,767,548		—		4,767,548
	$	13,989,842	$	1,310,074,530	$	—	$	1,324,064,372
Futures*		1,341,158		—		—		1,341,158
Total Investments	$	15,331,000	$	1,310,074,530	$	—	$	1,325,405,530

*  Unrealized appreciation.

NOTE 4—Derivative Investments

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, 2011:

	Value
Risk Exposure/Derivative Type	Assets		Liabilities
Interest rate risk
Futures contracts(a)	$	4,495,580	$	(3,154,422	)

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

Effect of Derivative Instruments for the year ended December 31, 2011

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	$	45,162,306
Change in Unrealized Appreciation
Interest rate risk	$	7,923,699
Total	$	53,086,005

*  The average notional value of futures outstanding during the period was $541,866,941.

Open Futures Contracts
								Unrealized
	Number of		Expiration		Notional			Appreciation
Long Contracts	Contracts		Month		Value			(Depreciation)
U.S. Treasury 2 Year Notes		307		March-2012	$	67,707,891		$	20,021
U.S. Treasury 10 Year Notes		2,257		March-2012		295,949,125			2,587,284
Ultra U.S. Treasury Bonds		1,037		March-2012		166,114,438			1,888,275
Subtotal					$	529,771,454		$	4,495,580
Short Contracts
U.S. Treasury 5 Year Notes		434		March-2012	$	(53,493,891	)	$	(215,148	)
U.S. Treasury 30 Year Bonds		640		March-2012		(92,680,000	)		(2,939,274	)
Subtotal					$	(146,173,891	)	$	(3,154,422	)
Total					$	383,597,563		$	1,341,158

Invesco V.I. Government Securities 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, 2011, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $163.

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, 2011, the Fund paid legal fees of $2,537 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010:

	2011		2010
Ordinary income	$	37,636,451	$	55,777,349

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	35,549,690
Net unrealized appreciation — investments		39,723,086
Temporary book/tax differences		(184,540	)
Capital loss carryforward		(8,231,999	)
Shares of beneficial interest		1,198,490,336
Total net assets	$	1,265,346,573

  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 and straddles.

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

Invesco V.I. Government Securities Fund

  The Fund utilized $31,259,261 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, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term
December 31, 2015	$	3,869,214
December 31, 2017		4,362,785
Total	$	8,231,999

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. To the extent that unrealized gains as of May 2, 2011, the date of reorganization of Invesco Van Kampen V.I. Government Fund into the Fund are realized on securities held in each fund at such date of reorganization, 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, 2011 was $723,594,200 and $861,702,067, respectively. During the same period, purchases and sales of U.S. Treasury obligations were $191,925,362 and $140,535,317. 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	$	41,994,759
Aggregate unrealized (depreciation) of investment securities		(2,271,673	)
Net unrealized appreciation of investment securities	$	39,723,086
Cost of investments for tax purposes is $1,284,341,286.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of paydown gains (losses) and dollar rolls, on December 31, 2011, undistributed net investment income was increased by $10,868,957 and undistributed net realized gain was decreased by $10,868,957. Further, as a result of tax deferrals acquired in the reorganization of Invesco Van Kampen V.I. Government Fund into the Fund, undistributed net investment income was decreased by $6,325, undistributed net realized gain was decreased by $14,724,973 and shares of beneficial interest increased by $14,731,298. These reclassifications had no effect on the net assets of the Fund.

Invesco V.I. Government Securities Fund

NOTE 11—Share Information

	Summary of Share Activity
	Years ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		10,663,153		$	128,843,040			14,868,780		$	182,569,736
Series II		5,300,488			64,070,452			1,086,469			13,335,480
Issued as reinvestment of dividends:
Series I		3,158,192			36,635,024			4,508,875			54,918,094
Series II		86,854			1,001,427			70,954			859,253
Issued in connection with acquistions:(b)
Series I		2,587,718			30,250,210			—			—
Series II		22,298,634			259,005,451			—			—
Reacquired:
Series I		(28,160,963	)		(340,945,513	)		(29,794,392	)		(366,330,179	)
Series II		(5,875,436	)		(71,038,561	)		(355,134	)		(4,339,793	)
Net increase (decrease) in share activity		10,058,640		$	107,821,530			(9,614,448	)	$	(118,987,409	)

(a)

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 80% 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 Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

(b)

As of the opening of business on May 2, 2011 the Fund acquired all the net assets of Invesco Van Kampen V.I. Government Fund (the “Target Fund”) pursuant to a plan of reorganization approved by the Trustees of the Fund on November 10, 2010 and by the shareholders of the Target Fund on April 1, 2011. The acquisition was accomplished by a tax-free exchange of 24,886,352 shares of the Fund for 32,516,244 shares outstanding of the Target Fund as of the close of business on April 29, 2011. Each class of the Target Fund was exchanged for the like class of shares of the Fund based on the relative net asset value of the Target Fund to the net asset value of the Fund as of the close of business on April 29, 2011. The Target Fund’s net assets at that date of $289,255,661, including $4,992,514 of unrealized appreciation, were combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $1,059,348,706. The net assets of the Fund subsequent to the acquisition were $1,348,604,367. The pro forma results of operations for the year ended December 31, 2011 assuming the reorganization had been completed on January 1, 2011, the beginning of the annual reporting period, are as follows:

Net investment income	$	28,166,317
Net realized/unrealized gains		72,785,041
Change in net assets resulting from operations	$	100,951,358

The combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Target Fund that has been included in the Fund’s Statement of Operations since May 2, 2011.

Invesco V.I. Government Securities 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				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 12/31/11	$	12.00	$	0.25	$	0.67		$	0.92		$	(0.43	)	$	—		$	(0.43	)	$	12.49		7.91	%	$	970,029		0.63	%(d)		0.75	%(d)		2.03	%(d)		85	%
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			0.75			1.98			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
Series II
Year ended 12/31/11		11.92		0.21		0.67			0.88			(0.41	)		—			(0.41	)		12.39		7.63			295,318		0.88	(d)		1.00	(d)		1.78	(d)		85
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			1.00			1.73			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

(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. For the period ended December 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $309,171,077 and sold of $25,033,352 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Van Kampen V.I. Government Fund into the Fund.
(d)	Ratios are based on average daily net assets (000’s) of $1,034,573 and $204,785 for Series I and Series II shares, respectively.

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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 17, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	1,058.50	$	3.11	$	1,022.18	$	3.06		0.60	%
Series II		1,000.00		1,057.20		4.41		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, 2011 through December 31, 2011, 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 by184/365 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, 2011:

Federal and State Income Tax
Corporate Dividends Received Deduction*	0.04%
U.S. Treasury Obligations*	7.93%

*  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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. Government Securities Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. Government Securities Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. Government Securities Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. Government Securities Fund

Invesco V.I. High Yield Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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, 2011, Invesco V.I. High Yield Fund underperformed the Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index, due mainly to the Fund’s issuer selection and our underweighting of higher quality assets in the market.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares*	0.96	%
Series II Shares*	0.61
Barclays Capital U.S. Aggregate Index▼ (Broad Market Index)	7.84
Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index▼ (Style-Specific Index)	4.96
Lipper VUF High Current Yield Bond Funds Category Average▼ (Peer Group)	3.35

Source(s): ^▼Lipper Inc.

* Performance includes litigation proceeds. Had these proceeds not been received, total return would have been lower.

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 although we tend to underweight the lowest-quality bonds in the asset class. 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 25% of total assets in foreign securities. The Fund also may 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 ongoing 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

The high yield market depends heavily on the underlying health of the economy, principally in the U.S. and, secondarily, in Europe. Growth remained slow as deleveraging and caution constrained economic activity and job creation. The situation in Europe was generally worse than in the U.S., owing to the sovereign debt crisis, slower economic growth and the threat of renewed recession.

     Financial stimulus remained robust and appeared likely to stay accommodative. While the U.S. Federal Reserve’s (the Fed) second round of quantitative easing ended, the Fed committed to keeping short-term interest rates anchored near zero through mid-2013. (In January 2012, after the close of the reporting period, the Fed extended its commitment to keep short-term interest rates near zero through late 2014.) In Europe, the tightening cycle appeared to have ended as interest rates were cut. In this way, fixed income asset classes were broadly supported by the underlying interest rate structure.

     The high yield market moved from becoming increasingly aggressive early in the reporting period to increasingly defensive as the reporting period ended. The change was due to slower growth expectations, including a U.S. growth scare over the summer and fears of

Portfolio Composition
By credit quality

A	0.6	%
BBB	5.0
BB	30.4
B	39.0
CCC	7.4
CC	0.4
C	0.1
Non-Rated	5.2
Cash	11.9

Source: Standard & Poor’s. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations, including specific securities, money

Top 10 Fixed Income Issuers*

1.	International Lease Financing Corp.	1.8	%
2.	Ally Financial Inc.	1.4
3.	CIT Group Inc.	1.2
4.	Tenet Healthcare Corp.	1.0
5.	Building Materials Corp. of America	1.0
6.	Hertz Corp. (The)	0.9
7.	Intelsat Jackson Holdings S.A.	0.9
8.	Cricket Communications, Inc.	0.9
9.	Century Aluminum Co.	0.8
10.	Delta Air Lines, Inc.	0.8

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

Total Net Assets	$111.9 million
Total Number of Holdings*		380

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.

as indicating low quality. For more information on Standard & Poor’s rating methodology, please visit standardandpoors.com and select “Understanding Ratings” under “Ratings Resources” on the homepage.

Invesco V.I. High Yield Fund

a deepening financial crisis centered in the eurozone. Volatility and correlations were high as the high yield market experienced what is generally called the “risk on/risk off” market. Lower capital utilization by broker dealers, who were limiting their own risk-taking, further exacerbated market movements.

     Defaults in the high yield bond market remained muted during 2011. The annualized par-weighted default rate for the year was only 2.03% according to Standard & Poor’s. Very low defaults are to be expected after periods of high defaults and recession. We expect a gradual increase in defaults as we exit the immediate post-downturn period, although without renewed recession, we expect defaults will likely remain below average.

     The broad U.S. high yield bond market, as measured by the Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index, generated a positive total return for the year ended December 31, 2011. In August and September 2011, debt concerns in Europe and the downgrade of U.S. debt by Standard & Poor’s caused investors to scale back their risk profiles. The risk-on trade returned at the end of the reporting period, as we had potentially good news from Europe and economic data out of the U.S. improved.

     In this environment, the Fund generated positive returns for the 12-month period but underperformed its style-specific index, the Barclays Capital U.S. High Yield 2% Issuer Cap Index. While valuations in the market have improved, we did not increase our weights to distressed and very high risk bonds.

     The main detractor from Fund performance was issuer selection in construction materials bonds. The Fund’s issuer selection in the distiller and vintners industry also hurt, as some of our off-index issuers were oversold throughout much of the reporting period. In addition, the Fund’s issuer selection in the automotive manufacturing industry detracted from performance; our holding in one of the big U.S. manufacturers sold off during the year. Our position in an integrated telecommunications services company also detracted from performance. This was due mainly to our exposure to a Greek wireless company which sold off. Another line item that detracted was an off-index position in the oil and gas storage and transportation industry.

     Investments that contributed to the Fund’s performance varied. The Fund’s primary contributors to performance were issuer selection in the oil and gas

exploration and production industry and issuer selection in the integrated telecommunication services industry. Avoidance of the non-captive consumer industry was beneficial as that was one of the worst performers during the reporting period. Finally, issuer selection in the technology industry also proved beneficial to Fund performance.

     At the close of the reporting period, we remained generally positive in our assessment of high yield securities. However, while the economy appeared to be strengthening in the U.S., substantial obstacles remained, including resolution of U.S. deficits (the pending fiscal adjustment) and the European sovereign debt situation and its potential bank solvency and credit implications.

     Thank you for investing in Invesco V.I. High Yield 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.

Peter Ehret
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. High Yield Fund. He joined Invesco in 2001. Mr. Ehret 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 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(es)
Fund and index data from 12/31/01*

* During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

Average Annual Total Returns
As of 12/31/11

Series I Shares
Inception (5/1/98)	3.40	%
10 Years	7.23
5 Years	5.68
1 Year	0.96
Series II Shares
10 Years	6.99	%
5 Years	5.41
1 Year	0.61

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 0.80% and 1.05%, 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 1.09% 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. 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.

     Had the adviser not waived fees and/ or 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, 2013. 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, 2011, 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. 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.

     Developing markets securities risk. 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.

     Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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.

     High yield bond (junk bond) risk. 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.

     Interest rate risk. 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 risk. Leverage exists when the Fund purchases or sells an instrument or enters into a transaction without investing cash in an amount equal to the full economic exposure of the instrument or transaction and the Fund could lose more than it invested. Leverage created from borrowing or certain types of transactions or instruments, including derivatives, may impair the Fund’s liquidity, cause it to liquidate positions at an unfavorable time, increase volatility or otherwise not achieve its intended objective.

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

     Market risk. 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.

     Reinvestment risk. 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.

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 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, 2011

	Principal
	Amount		Value
U.S. Dollar Denominated Bonds and Notes–74.44%
Aerospace & Defense–0.81%
BE Aerospace, Inc., Sr. Unsec. Notes, 6.88%, 10/01/20	$	115,000	$	126,212
Bombardier Inc. (Canada), Sr. Unsec. Notes, 7.75%, 03/15/20(b)		230,000		251,850
Huntington Ingalls Industries Inc., Sr. Unsec. Gtd. Notes,
6.88%, 03/15/18(b)		165,000		162,937
7.13%, 03/15/21(b)		95,000		93,813
Spirit Aerosystems Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 12/15/20		240,000		251,400
Triumph Group, Inc., Sr. Unsec. Gtd. Sub. Global Notes, 8.00%, 11/15/17		20,000		21,500
				907,712
Airlines–2.69%
American Airlines Inc., Sr. Sec. Gtd. Notes, 7.50%, 03/15/16(b)(c)		1,015,000		730,800
American Airlines Pass Through Trust, Series 2011-1, Class B, Sec. Gtd. Pass Through Ctfs., 7.00%, 01/31/18(b)		79,472		70,730
Continental Airlines Inc.,
Series 2000-2, Class B, Sec. Sub. Pass Through Ctfs., 8.31%, 04/02/18		57,504		56,354
Series 2007-1, Class C, Sec. Sub. Global Pass Through Ctfs., 7.34%, 04/19/14		300,872		297,863
Series 2009-1, Sec. Pass Through Ctfs., 9.00%, 07/08/16		54,724		60,333
Series 2009-2, Class B, Sec. Global Pass Through Ctfs., 9.25%, 05/10/17		146,689		151,411
Delta Air Lines, Inc., Sec. Notes, 12.25%, 03/15/15(b)		85,000		90,100
Sr. Sec. Notes, 9.50%, 09/15/14(b)		222,000		229,215
Series 2002-1, Class C, Sec. Pass Through Ctfs., 7.78%, 01/02/12		9,495		9,495
Series 2007-1, Class C, Sec. Global Pass Through Ctfs., 8.95%, 08/10/14		385,852		378,135
Series 2010-1, Class B, Sec. Pass Through Ctfs., 6.38%, 01/02/16(b)		85,000		79,050
Series 2010-2, Class B, Sec. Pass Through Ctfs., 6.75%, 11/23/15(b)		125,000		116,250
UAL Pass Through Trust,
Series 2007-1, Class A, Sec. Gtd. Global Pass Through Ctfs., 6.64%, 07/02/22		40,036		39,911
Series 2007-1, Class B, Sr. Sec. Gtd. Global Pass Through Ctfs., 7.34%, 07/02/19		116,944		110,804
Series 2009-1, Sr. Sec. Gtd. Global Pass Through Ctfs., 10.40%, 11/01/16		142,053		158,035
Series 2009-2, Class B, Sec. Gtd. Pass Through Ctfs., 12.00%, 01/15/16(b)		213,468		223,074
US Airways Pass Through Trust, Series 1998-1, Class C, Sec. Pass Through Ctfs., 6.82%, 01/30/14		234,563		209,934
				3,011,494
Alternative Carriers–1.17%
Cogent Communications Group, Inc., Sr. Sec. Gtd. Notes, 8.38%, 02/15/18(b)		395,000		407,837
Level 3 Communications Inc., Sr. Unsec. Global Notes, 11.88%, 02/01/19		245,000		261,537
Level 3 Financing Inc., Sr. Unsec. Gtd. Global Notes,
9.25%, 11/01/14		59,000		60,328
9.38%, 04/01/19		335,000		350,075
Sr. Unsec. Gtd. Notes, 8.13%, 07/01/19(b)		230,000		227,700
				1,307,477
Aluminum–0.85%
Century Aluminum Co., Sr. Sec. Gtd. Notes, 8.00%, 05/15/14		950,630		946,471
Apparel Retail–1.07%
Express LLC/Express Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.75%, 03/01/18		390,000		426,075
Gap, Inc. (The), Sr. Unsec. Notes, 5.95%, 04/12/21		310,000		296,437
J. Crew Group, Inc., Sr. Unsec. Gtd. Global Notes, 8.13%, 03/01/19		305,000		292,037
Limited Brands Inc., Sr. Unsec. Gtd. Global Notes, 8.50%, 06/15/19		100,000		118,000
Sr. Unsec. Gtd. Notes,
6.63%, 04/01/21		40,000		42,600
7.00%, 05/01/20		25,000		27,188
				1,202,337
Apparel, Accessories & Luxury Goods–1.93%
Hanesbrands Inc., Sr. Unsec. Gtd. Global Notes, 6.38%, 12/15/20		575,000		587,937
Jones Group Inc. (The), Sr. Unsec. Notes, 6.88%, 03/15/19		625,000		565,625

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

Invesco V.I. High Yield Fund

	Principal
	Amount		Value
Apparel, Accessories & Luxury Goods–(continued)
Levi Strauss & Co., Sr. Unsec. Global Notes, 7.63%, 05/15/20	$	525,000	$	539,438
Quiksilver Inc., Sr. Unsec. Gtd. Global Notes, 6.88%, 04/15/15		505,000		469,650
				2,162,650
Auto Parts & Equipment–1.29%
Allison Transmission Inc., Sr. Unsec. Gtd Notes, 7.13%, 05/15/19(b)		360,000		354,600
American Axle & Manufacturing, Inc., Sr. Unsec. Gtd. Notes, 7.75%, 11/15/19		315,000		310,275
Dana Holding Corp., Sr. Unsec. Notes, 6.75%, 02/15/21		450,000		462,375
Tenneco Inc., Sr. Unsec. Gtd. Global Notes, 6.88%, 12/15/20		190,000		196,650
7.75%, 08/15/18		110,000		116,875
				1,440,775
Automobile Manufacturers–1.15%
Chrysler Group LLC/CG Co.-Issuer Inc., Sr. Sec. Gtd. Notes, 8.00%, 06/15/19(b)		450,000		412,875
Ford Motor Co., Sr. Unsec. Global Notes, 7.45%, 07/16/31		720,000		864,000
Motors Liquidation Corp., Sr. Unsec. Global Notes, 7.20%(c)(d)		445,000		3,682
Sr. Unsec. Notes, 8.38%, 07/15/33(c)(d)		755,000		6,268
				1,286,825
Biotechnology–0.22%
Grifols Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 02/01/18		70,000		73,850
Savient Pharmaceuticals Inc., Sr. Unsec. Conv. Notes, 4.75%, 02/01/18		90,000		43,200
STHI Holding Corp., Sec. Gtd. Notes, 8.00%, 03/15/18(b)		125,000		129,063
				246,113
Broadcasting–0.41%
Allbritton Communications Co., Sr. Unsec. Global Notes, 8.00%, 05/15/18		130,000		130,000
Clear Channel Communications, Inc., Sr. Sec. Gtd. Global Notes, 9.00%, 03/01/21		395,000		333,775
				463,775
Building Products–3.73%
American Standard Americas, Sr. Sec. Notes, 10.75%, 01/15/16(b)		310,000		184,450
Associated Materials LLC, Sr. Sec. Gtd. Global Notes, 9.13%, 11/01/17		455,000		403,813
Building Materials Corp. of America, Sr. Sec. Gtd. Notes, 7.50%, 03/15/20(b)		370,000		399,600
Sr. Unsec. Notes, 6.75%, 05/01/21(b)		150,000		158,250
6.88%, 08/15/18(b)		490,000		514,500
Gibraltar Industries Inc., Series B, Sr. Unsec. Gtd. Sub. Global Notes, 8.00%, 12/01/15		535,000		537,675
Nortek Inc., Sr. Unsec. Gtd. Notes,
8.50%, 04/15/21(b)		770,000		655,462
10.00%, 12/01/18(b)		140,000		133,350
Ply Gem Industries Inc., Sr. Sec. Gtd. Global Notes, 8.25%, 02/15/18		215,000		188,394
Sr. Unsec. Gtd. Sub. Global Notes, 13.13%, 07/15/14		265,000		235,850
Roofing Supply Group LLC/Roofing Supply Finance Inc., Sr. Sec. Notes, 8.63%, 12/01/17(b)		472,000		482,620
USG Corp., Sr. Unsec. Gtd. Notes,
8.38%, 10/15/18(b)		25,000		23,125
9.75%, 08/01/14(b)		105,000		107,100
Sr. Unsec. Notes, 9.75%, 01/15/18		180,000		154,800
				4,178,989
Cable & Satellite–0.73%
EH Holding Corp.,
Sr. Sec. Gtd. Notes, 6.50%, 06/15/19(b)		140,000		146,650
Sr. Unsec. Gtd. Notes, 7.63%, 06/15/21(b)		80,000		84,300
Kabel BW (Germany), Sr. Sec. Gtd. Notes, 7.50%, 03/15/19(b)		560,000		590,800
				821,750
Casinos & Gaming–3.76%
Ameristar Casinos Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 04/15/21		345,000		357,075
Caesars Entertainment Operating Co. Inc.,
Sec. Gtd. Global Notes, 12.75%, 04/15/18		265,000		212,000
Sr. Sec. Gtd. Global Notes, 11.25%, 06/01/17		171,000		182,542
Sr. Unsec. Gtd. Global Bonds, 5.63%, 06/01/15		389,000		217,840
CityCenter Holdings LLC/CityCenter Finance Corp., Sr. Sec. Gtd. Notes, 7.63%, 01/15/16(b)		15,000		15,413
Sr. Sec. Gtd. PIK Notes, 10.75%, 01/15/17(b)		248,890		257,601
Mandalay Resort Group, Sr. Unsec. Gtd. Sub. Notes, 7.63%, 07/15/13		200,000		199,500
MGM Resorts International, Sr. Unsec. Gtd. Conv. Notes, 4.25%, 04/15/15		95,000		90,369
Sr. Unsec. Gtd. Global Notes,
6.63%, 07/15/15		393,000		376,789
6.75%, 04/01/13		405,000		410,062
Sr. Unsec. Gtd. Notes, 5.88%, 02/27/14		10,000		9,725

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

Invesco V.I. High Yield Fund

	Principal
	Amount		Value
Casinos & Gaming–(continued)
Midwest Gaming Borrower LLC/ Midwest Finance Corp., Sr. Sec. Notes, 11.63%, 04/15/16(b)	$	45,000	$	49,050
Pinnacle Entertainment Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 08/01/17		145,000		154,063
Scientific Games International Inc., Sr. Unsec. Gtd. Sub. Global Notes, 9.25%, 06/15/19		195,000		207,187
Seneca Gaming Corp., Sr. Unsec. Gtd. Notes, 8.25%, 12/01/18(b)		180,000		175,950
Snoqualmie Entertainment Authority, Sr. Sec. Floating Rate Notes, 4.18%, 02/01/14(b)(e)		300,000		268,500
Sr. Sec. Notes, 9.13%, 02/01/15(b)		440,000		422,400
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., Sec. Gtd. First Mortgage Global Notes, 7.75%, 08/15/20		450,000		500,625
Sr. Sec. Gtd. First Mortgage Global Notes, 7.88%, 11/01/17		90,000		98,944
				4,205,635
Coal & Consumable Fuels–0.45%
CONSOL Energy Inc., Sr. Unsec. Gtd. Global Notes, 8.00%, 04/01/17		35,000		38,587
8.25%, 04/01/20		70,000		77,700
Peabody Energy Corp., Sr. Unsec. Gtd. Notes, 6.00%, 11/15/18(b)		380,000		389,500
				505,787
Communications Equipment–0.44%
Avaya Inc., Sr. Sec. Gtd. Notes, 7.00%, 04/01/19(b)		505,000		492,375
Computer & Electronics Retail–0.55%
Rent-A-Center Inc., Sr. Unsec. Gtd Global Notes, 6.63%, 11/15/20		605,000		611,050
Computer Storage & Peripherals–0.34%
Seagate HDD Cayman, Sr. Unsec. Gtd. Notes, 7.00%, 11/01/21(b)		365,000		375,950
Construction & Engineering–1.37%
Dycom Investments Inc., Sr. Unsec. Gtd. Sub. Global Notes, 7.13%, 01/15/21		585,000		593,775
MasTec, Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 02/01/17		315,000		328,781
Tutor Perini Corp., Sr. Unsec. Gtd. Global Notes, 7.63%, 11/01/18		650,000		614,250
				1,536,806
Construction & Farm Machinery & Heavy Trucks–1.05%
Case New Holland Inc., Sr. Unsec. Gtd. Global Notes, 7.88%, 12/01/17		215,000		244,025
Commercial Vehicle Group, Inc., Sr. Sec. Gtd. Notes, 7.88%, 04/15/19(b)		235,000		227,656
Manitowoc Co. Inc. (The), Sr. Unsec. Gtd. Notes, 8.50%, 11/01/20		105,000		110,250
Navistar International Corp., Sr. Unsec. Gtd. Notes, 8.25%, 11/01/21		270,000		287,550
Titan International Inc., Sr. Sec. Gtd. Global Notes, 7.88%, 10/01/17		290,000		303,050
				1,172,531
Construction Materials–0.81%
Cemex Finance LLC, Sr. Sec. Gtd. Bonds, 9.50%, 12/14/16(b)		495,000		434,548
Cemex S.A.B. de C.V. (Mexico), Unsec. Sub. Conv. Notes, 4.88%, 03/15/15		100,000		65,750
Texas Industries Inc., Sr. Unsec. Gtd. Global Notes, 9.25%, 08/15/20		415,000		373,500
U.S. Concrete Inc., Sr. Sec. Conv. Notes, 9.50%, 08/31/15(b)		40,000		38,200
				911,998
Consumer Finance–2.50%
Ally Financial Inc., Sr. Unsec. Gtd. Global Notes,
7.50%, 09/15/20		260,000		263,900
8.00%, 03/15/20		1,065,000		1,096,950
8.00%, 11/01/31		216,000		208,980
Ford Motor Credit Co. LLC, Sr. Unsec. Notes,
5.88%, 08/02/21		500,000		521,250
8.00%, 12/15/16		245,000		281,138
National Money Mart Co. (Canada), Sr. Unsec. Gtd. Global Notes, 10.38%, 12/15/16		395,000		423,637
				2,795,855
Data Processing & Outsourced Services–0.86%
CoreLogic, Inc., Sr. Unsec. Gtd. Notes, 7.25%, 06/01/21(b)		670,000		643,200
First Data Corp., Sr. Sec. Gtd. Notes, 7.38%, 06/15/19(b)		135,000		127,575
SunGard Data Systems Inc., Sr. Unsec. Gtd. Global Notes,
7.38%, 11/15/18		65,000		66,788
7.63%, 11/15/20		123,000		126,997
				964,560
Department Stores–0.24%
Sears Holdings Corp., Sr. Sec. Gtd. Global Notes, 6.63%, 10/15/18		350,000		267,750

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

Invesco V.I. High Yield Fund

	Principal
	Amount		Value
Distillers & Vintners–0.48%
CEDC Finance Corp. International Inc., Sr. Sec. Gtd. Notes, 9.13%, 12/01/16(b)	$	305,000	$	215,025
Constellation Brands Inc., Sr. Unsec. Gtd. Global Notes, 7.25%, 05/15/17		295,000		323,762
				538,787
Diversified Banks–0.07%
RBS Capital Trust II, Jr. Unsec. Gtd. Sub. Global Bonds, 6.43%(f)(g)		150,000		77,625
Diversified Commercial & Professional Services–0.01%
Corrections Corp. of America, Sr. Unsec. Gtd. Global Notes, 6.25%, 03/15/13		10,000		10,019
Diversified Metals & Mining–0.65%
FMG Resources Pty. Ltd. (Australia), Sr. Unsec. Gtd. Notes,
6.38%, 02/01/16(b)		250,000		243,131
7.00%, 11/01/15(b)		185,000		187,775
Midwest Vanadium Pty. Ltd. (Australia), Sr. Sec. Gtd. Mortgage Notes, 11.50%, 02/15/18(b)		65,000		47,797
Vedanta Resources PLC (United Kingdom), Sr. Unsec. Notes, 9.50%, 07/18/18(b)		295,000		252,385
				731,088
Electric Utilities–0.47%
Centrais Eletricas Brasileiras S.A. (Brazil), Sr. Unsec. Notes, 5.75%, 10/27/21(b)		230,000		241,107
Edison Mission Energy, Sr. Unsec. Notes, 7.50%, 06/15/13		10,000		9,700
LSP Energy L.P./LSP Batesville Funding Corp., Series C, Sr. Sec. Mortgage Bonds, 7.16%, 01/15/14		61,046		50,515
Series D, Sr. Sec. Bonds, 8.16%, 07/15/25		275,000		228,250
				529,572
Electrical Components & Equipment–0.06%
Polypore International Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 11/15/17		65,000		67,438
Electronic Manufacturing Services–0.38%
Sanmina-SCI Corp., Sr. Unsec. Gtd. Notes, 7.00%, 05/15/19(b)		440,000		421,300
Environmental & Facilities Services–0.10%
EnergySolutions Inc./LLC, Sr. Unsec. Gtd. Global Notes, 10.75%, 08/15/18		125,000		117,500
Food Retail–0.30%
New Albertsons Inc., Sr. Unsec. Bonds, 8.00%, 05/01/31		205,000		164,512
Simmons Foods Inc., Sec. Notes, 10.50%, 11/01/17(b)		205,000		172,200
				336,712
Forest Products–0.19%
Millar Western Forest Products Ltd. (Canada), Sr. Unsec. Notes, 8.50%, 04/01/21(b)		260,000		200,850
Sino-Forest Corp. (Canada), Sr. Unsec. Gtd. Notes, 6.25%, 10/21/17(b)		30,000		8,250
				209,100
Gas Utilities–0.72%
Ferrellgas L.P./Ferrellgas Finance Corp., Sr. Unsec. Global Notes, 6.50%, 05/01/21		433,000		383,205
Suburban Propane Partners, L.P./Suburban Energy Finance Corp., Sr. Unsec. Notes, 7.38%, 03/15/20		410,000		428,450
				811,655
Health Care Equipment–0.28%
DJO Finance LLC/Corp., Sr. Unsec. Gtd. Global Notes,
7.75%, 04/15/18		35,000		26,775
10.88%, 11/15/14		195,000		182,813
Sr. Unsec. Gtd. Sub. Global Notes, 9.75%, 10/15/17		130,000		101,400
				310,988
Health Care Facilities–1.82%
HCA, Inc.,
Sr. Sec. Gtd. Global Notes, 7.88%, 02/15/20		288,000		312,480
Sr. Unsec. Notes, 7.19%, 11/15/15		155,000		156,356
Health Management Associates Inc., Sr. Sec. Gtd. Notes, 6.13%, 04/15/16		70,000		72,625
HealthSouth Corp., Sr. Unsec. Gtd. Notes,
7.25%, 10/01/18		90,000		89,550
7.75%, 09/15/22		85,000		83,938
8.13%, 02/15/20		90,000		91,125
Select Medical Holdings Corp., Sr. Unsec. Floating Rate Global Notes, 6.27%, 09/15/15(e)		155,000		134,075
Tenet Healthcare Corp., Sr. Sec. Gtd. Global Notes, 10.00%, 05/01/18		180,000		206,550
Sr. Unsec. Global Notes,
8.00%, 08/01/20		310,000		310,000
9.25%, 02/01/15		545,000		580,425
				2,037,124
Health Care Services–0.41%
Radnet Management Inc., Sr. Unsec. Gtd. Global Notes, 10.38%, 04/01/18		225,000		201,375
Universal Hospital Services Inc., Sec. Gtd. PIK Global Notes, 8.50%, 06/01/15		250,000		254,062
				455,437
Health Care Supplies–0.12%
Alere Inc., Sr. Unsec. Gtd. Sub. Notes, 9.00%, 05/15/16		135,000		137,025

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

Invesco V.I. High Yield Fund

	Principal
	Amount		Value
Health Care Technology–0.29%
MedAssets Inc., Sr. Unsec. Gtd. Global Notes, 8.00%, 11/15/18	$	330,000	$	325,050
Homebuilding–1.19%
Beazer Homes USA Inc., Sr. Unsec. Gtd. Global Notes,
6.88%, 07/15/15		140,000		105,350
8.13%, 06/15/16		300,000		223,500
K. Hovnanian Enterprises Inc., Sr. Sec. Gtd. Global Notes, 10.63%, 10/15/16		490,000		392,000
Lennar Corp., Sr. Unsec. Gtd. Global Notes, 6.95%, 06/01/18		435,000		424,125
M/I Homes Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 11/15/18		205,000		181,937
				1,326,912
Hotels, Resorts & Cruise Lines–0.15%
Royal Caribbean Cruises Ltd., Sr. Unsec. Global Notes,
7.25%, 03/15/18		85,000		89,462
7.50%, 10/15/27		75,000		73,688
				163,150
Household Products–0.29%
Central Garden & Pet Co., Sr. Gtd. Sub. Notes, 8.25%, 03/01/18		325,000		320,938
Housewares & Specialties–0.45%
American Greetings Corp., Sr. Unsec. Gtd. Notes, 7.38%, 12/01/21		500,000		506,875
Independent Power Producers & Energy Traders–1.02%
AES Corp. (The),
Sr. Unsec. Global Notes,
7.75%, 10/15/15		340,000		369,750
8.00%, 10/15/17		190,000		209,000
AES Red Oak LLC, Series A, Sr. Sec. Bonds, 8.54%, 11/30/19		207,274		213,492
Calpine Corp., Sr. Sec. Notes, 7.25%, 10/15/17(b)		335,000		350,075
				1,142,317
Industrial Conglomerates–0.00%
Indalex Holding Corp., Series B, Sec. Gtd. Global Notes, 11.50%, 02/01/14(c)		230,000		2,013
Industrial Machinery–0.44%
Cleaver-Brooks Inc., Sr. Sec. Notes, 12.25%, 05/01/16(b)		305,000		308,050
Columbus McKinnon Corp., Sr. Unsec. Gtd. Sub. Global Notes, 7.88%, 02/01/19		25,000		26,094
SPX Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 09/01/17		145,000		157,325
				491,469
Industrial REIT’s–0.10%
DuPont Fabros Technology L.P., Sr. Unsec. Gtd. Global Notes, 8.50%, 12/15/17		100,000		107,750
Integrated Telecommunication Services–1.08%
Integra Telecom Holdings Inc., Sr. Sec. Notes, 10.75%, 04/15/16(b)		200,000		162,000
Intelsat Jackson Holdings S.A. (Luxembourg), Sr. Unsec. Gtd. Global Notes, 7.25%, 10/15/20		415,000		424,337
Sr. Unsec. Gtd. Notes,
7.25%, 04/01/19(b)		130,000		133,250
7.50%, 04/01/21(b)		390,000		399,750
Windstream Corp., Sr. Unsec. Gtd. Notes, 7.50%, 06/01/22(b)		95,000		95,475
				1,214,812
Internet Retail–0.07%
Travelport LLC/Inc., Sr. Unsec. Gtd. Global Notes, 9.00%, 03/01/16		135,000		76,613
Internet Software & Services–0.30%
Equinix Inc.,
Sr. Unsec. Notes,
7.00%, 07/15/21		50,000		53,250
8.13%, 03/01/18		255,000		281,775
				335,025
Investment Banking & Brokerage–0.48%
Cantor Fitzgerald L.P., Bonds, 7.88%, 10/15/19(b)		325,000		326,135
E*Trade Financial Corp.,
Sr. Unsec. Notes,
6.75%, 06/01/16		100,000		97,500
7.88%, 12/01/15		110,000		111,100
				534,735
Leisure Facilities–0.06%
Speedway Motorsports Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 02/01/19		70,000		71,050
Leisure Products–0.50%
Toys R US-Delaware Inc., Sr. Sec. Gtd. Notes, 7.38%, 09/01/16(b)		550,000		558,250
Life Sciences Tools & Services–0.14%
Patheon Inc. (Canada), Sr. Sec. Gtd. Notes, 8.63%, 04/15/17(b)		190,000		153,900
Marine–0.11%
Navios Maritime Acquisition Corp./Navios Acquisition Finance U.S. Inc. (Greece), Sr. Sec. Gtd. Global Notes, 8.63%, 11/01/17		40,000		28,600
Stena A.B. (Sweden), Sr. Unsec. Global Notes, 7.00%, 12/01/16		105,000		96,994
				125,594

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

Invesco V.I. High Yield Fund

	Principal
	Amount		Value
Movies & Entertainment–1.04%
AMC Entertainment Inc., Sr. Gtd. Sub. Global Notes, 9.75%, 12/01/20	$	400,000	$	382,000
Sr. Unsec. Gtd. Global Notes, 8.75%, 06/01/19		314,000		326,168
NAI Entertainment Holdings LLC, Sr. Sec. Notes, 8.25%, 12/15/17(b)		430,000		457,412
				1,165,580
Multi-Line Insurance–1.75%
American International Group Inc., Jr. Unsec. Sub. Global Deb., 8.18%, 05/15/58		380,000		344,850
Fairfax Financial Holdings Ltd. (Canada), Sr. Unsec. Notes, 5.80%, 05/15/21(b)		255,000		241,613
Hartford Financial Services Group Inc. (The), Jr. Unsec. Sub. Deb., 8.13%, 06/15/38		190,000		189,050
Sr. Unsec. Global Notes, 5.95%, 10/15/36		90,000		83,149
Liberty Mutual Group Inc., Jr. Unsec. Gtd. Sub. Bonds, 7.80%, 03/15/37 (Acquired 09/16/10-10/01/10; Cost $471,375)(b)		495,000		444,262
Nationwide Mutual Insurance Co., Unsec. Sub. Notes, 9.38%, 08/15/39(b)		545,000		657,275
				1,960,199
Multi-Sector Holdings–0.16%
Reynolds Group Issuer Inc./LLC/Luxembourg S.A., Sr. Unsec. Gtd. Notes, 8.25%, 02/15/21(b)		200,000		178,000
Office Services & Supplies–0.26%
IKON Office Solutions, Inc., Sr. Unsec. Notes, 6.75%, 12/01/25		265,000		259,037
Interface Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 12/01/18		35,000		37,188
				296,225
Oil & Gas Equipment & Services–1.35%
Bristow Group, Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 09/15/17		530,000		548,550
Key Energy Services, Inc., Sr. Unsec. Gtd. Notes, 6.75%, 03/01/21		805,000		809,025
SESI LLC, Sr. Unsec. Gtd. Global Notes, 6.38%, 05/01/19		145,000		148,625
				1,506,200
Oil & Gas Exploration & Production–4.78%
Berry Petroleum Co., Sr. Unsec. Notes, 6.75%, 11/01/20		95,000		96,544
Chaparral Energy Inc., Sr. Unsec. Gtd. Global Notes,
8.25%, 09/01/21		305,000		310,337
8.88%, 02/01/17		295,000		305,694
Chesapeake Energy Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 11/15/20		185,000		197,025
Sr. Unsec. Gtd. Notes, 6.13%, 02/15/21		185,000		190,319
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 7.13%, 05/01/17		65,000		68,169
Continental Resources Inc., Sr. Unsec. Gtd. Global Notes,
7.13%, 04/01/21		85,000		92,438
7.38%, 10/01/20		190,000		207,812
8.25%, 10/01/19		130,000		143,487
EXCO Resources Inc., Sr. Unsec. Gtd. Notes, 7.50%, 09/15/18		590,000		560,500
Forest Oil Corp., Sr. Unsec. Gtd. Global Notes, 7.25%, 06/15/19		195,000		196,950
McMoRan Exploration Co., Sr. Unsec. Gtd. Notes, 11.88%, 11/15/14		200,000		213,500
Newfield Exploration Co., Sr. Unsec. Sub. Global Notes, 7.13%, 05/15/18		518,000		547,759
OGX Petroleo e Gas Participacoes S.A. (Brazil), Sr. Unsec. Gtd. Notes, 8.50%, 06/01/18(b)		260,000		256,290
Plains Exploration & Production Co., Sr. Unsec. Gtd. Notes,
7.63%, 06/01/18		520,000		553,800
8.63%, 10/15/19		100,000		110,250
Range Resources Corp., Sr. Unsec. Gtd. Sub. Notes, 5.75%, 06/01/21		340,000		366,350
SM Energy Co., Sr. Unsec. Notes,
6.63%, 02/15/19(b)		140,000		144,900
6.50%, 11/15/21(b)		680,000		703,800
Whiting Petroleum Corp., Sr. Unsec. Gtd. Sub. Notes, 6.50%, 10/01/18		80,000		83,700
				5,349,624
Oil & Gas Refining & Marketing–0.65%
United Refining Co., Sr. Sec. Gtd. Global Notes, 10.50%, 02/28/18		770,000		723,800
Oil & Gas Storage & Transportation–3.60%
Atlas Pipeline Partners L.P./Atlas Pipeline Finance Corp., Sr. Unsec. Gtd. Notes, 8.75%, 06/15/18(b)		575,000		608,062
Chesapeake Midstream Partners L.P./CHKM Finance Corp., Sr. Unsec. Gtd. Notes, 5.88%, 04/15/21(b)		535,000		540,350
Copano Energy LLC/Copano Energy Finance Corp., Sr. Unsec. Gtd. Notes, 7.13%, 04/01/21		485,000		492,275
Energy Transfer Equity L.P., Sr. Sec. Gtd. Notes, 7.50%, 10/15/20		385,000		418,206
Inergy L.P./Inergy Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 08/01/21		183,000		185,288
MarkWest Energy Partners L.P./MarkWest Energy Finance Corp., Sr. Unsec. Gtd. Notes, 6.25%, 06/15/22		410,000		430,500
Overseas Shipholding Group, Inc., Sr. Unsec. Notes, 8.13%, 03/30/18		375,000		229,687

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 Storage & Transportation–(continued)
Regency Energy Partners L.P./Regency Energy Finance Corp., Sr. Unsec. Gtd. Notes, 6.88%, 12/01/18	$	245,000	$	260,619
Targa Resources Partners L.P./Targa Resources Partners Finance Corp., Sr. Unsec. Gtd. Notes, 6.88%, 02/01/21(b)		305,000		310,337
Teekay Corp. (Canada), Sr. Unsec. Global Notes, 8.50%, 01/15/20		105,000		101,588
WPX Energy Inc., Sr. Unsec. Notes, 6.00%, 01/15/22(b)		440,000		452,100
				4,029,012
Other Diversified Financial Services–1.92%
Aircastle Ltd., Sr. Notes, 9.75%, 08/01/18(b)		90,000		94,950
International Lease Finance Corp.,
Sr. Sec. Notes,
6.75%, 09/01/16(b)		145,000		148,897
7.13%, 09/01/18(b)		200,000		206,938
Sr. Unsec. Global Notes,
5.75%, 05/15/16		65,000		60,572
6.25%, 05/15/19		100,000		92,500
8.63%, 09/15/15		370,000		378,880
8.75%, 03/15/17		285,000		294,797
Sr. Unsec. Notes, 8.25%, 12/15/20		860,000		871,287
				2,148,821
Packaged Foods & Meats–0.26%
Del Monte Corp., Sr. Unsec. Gtd. Global Notes, 7.63%, 02/15/19		305,000		295,088
Paper Packaging–0.22%
Cascades Inc. (Canada), Sr. Unsec. Gtd. Global Notes, 7.88%, 01/15/20		250,000		244,375
Paper Products–1.34%
Boise Cascade LLC, Sr. Unsec. Gtd. Sub. Global Notes, 7.13%, 10/15/14		785,000		781,075
Clearwater Paper Corp., Sr. Unsec. Gtd. Global Notes, 7.13%, 11/01/18		225,000		234,562
Mercer International Inc., Sr. Unsec. Gtd. Global Notes, 9.50%, 12/01/17		205,000		210,638
NewPage Corp., Sr. Sec. Gtd. Global Notes, 11.38%, 12/31/14		215,000		159,638
P.H. Glatfelter Co., Sr. Unsec. Gtd. Global Notes, 7.13%, 05/01/16		105,000		108,806
				1,494,719
Pharmaceuticals–1.16%
Aptalis Pharma Inc., Sr. Unsec. Gtd. Global Notes, 12.75%, 03/01/16		95,000		100,700
Elan Finance PLC/Corp. (Ireland), Sr. Unsec. Gtd. Global Notes,
8.75%, 10/15/16		105,000		112,875
8.75%, 10/15/16		100,000		107,250
Endo Pharmaceuticals Holdings Inc., Sr. Unsec. Gtd. Global Notes, 7.00%, 12/15/20		30,000		32,025
Mylan Inc., Sr. Unsec. Gtd. Notes, 6.00%, 11/15/18(b)		135,000		139,388
NBTY Inc., Sr. Unsec. Gtd. Global Notes, 9.00%, 10/01/18		400,000		440,000
Valeant Pharmaceuticals International, Sr. Unsec. Gtd. Notes,
6.75%, 10/01/17(b)		85,000		85,000
6.75%, 08/15/21(b)		285,000		278,231
				1,295,469
Property & Casualty Insurance–0.32%
QBE Capital Funding III Ltd. (Botswana), Unsec. Gtd. Sub. Notes, 7.25%, 05/24/41(b)		200,000		176,820
XL Group PLC (Ireland), Series E, Jr. Sub. Global Pfd. Bonds, 6.50%(g)		225,000		177,187
				354,007
Publishing–0.02%
MediMedia USA Inc., Sr. Unsec. Sub. Notes, 11.38%, 11/15/14(b)		30,000		26,625
Real Estate Services–0.20%
CB Richard Ellis Services Inc., Sr. Unsec. Gtd. Global Notes, 6.63%, 10/15/20		215,000		221,988
Regional Banks–1.53%
AmSouth Bancorp., Unsec. Sub. Deb., 6.75%, 11/01/25		75,000		61,500
BB&T Capital Trust II, Jr. Unsec. Ltd. Gtd. Sub. Global Trust Pfd. Capital Securities, 6.75%, 06/07/36		180,000		179,831
PNC Financial Services Group, Inc., Series O, Jr. Unsec. Sub. Pfd. Notes, 6.75%(g)		120,000		118,200
Regions Financial Corp., Sr. Unsec. Notes, 5.75%, 06/15/15		500,000		483,750
Unsec. Sub. Notes, 7.38%, 12/10/37		465,000		384,787
Susquehanna Capital II, Jr. Unsec. Ltd. Gtd. Sub. Notes, 11.00%, 03/23/40		175,000		181,782
Synovus Financial Corp., Unsec. Sub. Global Notes, 5.13%, 06/15/17		355,000		302,638
				1,712,488
Research & Consulting Services–0.26%
FTI Consulting Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 10/01/20		275,000		288,063

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

Invesco V.I. High Yield Fund

	Principal
	Amount		Value
Semiconductor Equipment–0.75%
Amkor Technology Inc., Sr. Unsec. Global Notes,
6.63%, 06/01/21	$	210,000	$	202,125
7.38%, 05/01/18		315,000		322,875
Sensata Technologies B.V. (Netherlands), Sr. Unsec. Gtd. Notes, 6.50%, 05/15/19(b)		320,000		319,200
				844,200
Semiconductors–0.56%
Freescale Semiconductor Inc., Sr. Sec. Gtd. Notes, 9.25%, 04/15/18(b)		125,000		134,062
Sr. Unsec. Gtd. Global Notes,
8.05%, 02/01/20		325,000		305,500
10.75%, 08/01/20		175,000		182,875
				622,437
Specialized Finance–1.25%
CIT Group Inc., Sec. Gtd. Bonds, 7.00%, 05/02/17(b)		1,395,000		1,398,487
Specialized REIT’s–0.80%
Host Hotels & Resorts L.P.,
Sr. Gtd. Global Notes, 6.00%, 11/01/20		205,000		210,125
Sr. Unsec. Gtd. Notes, 6.00%, 10/01/21(b)		325,000		334,750
MPT Operating Partnership L.P./MPT Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 05/01/21		200,000		199,250
Omega Healthcare Investors, Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 10/15/22		155,000		155,581
				899,706
Specialty Chemicals–1.17%
Ferro Corp., Sr. Unsec. Notes, 7.88%, 08/15/18		260,000		263,900
Huntsman International LLC, Sr. Unsec. Gtd. Global Notes, 5.50%, 06/30/16		245,000		241,938
Sr. Unsec. Gtd. Sub. Global Notes, 8.63%, 03/15/21		263,000		280,095
NewMarket Corp., Sr. Unsec. Gtd. Global Notes, 7.13%, 12/15/16		150,000		153,656
PolyOne Corp., Sr. Unsec. Notes, 7.38%, 09/15/20		360,000		372,600
				1,312,189
Specialty Stores–0.58%
Michaels Stores Inc.,
Sr. Unsec. Gtd. Global Notes, 7.75%, 11/01/18		185,000		188,700
Sr. Unsec. Gtd. Sub. Disc. Global Notes, 13.00%, 11/01/16		135,000		143,944
Sally Holdings LLC/Sally Capital Inc., Sr. Unsec. Gtd. Notes, 6.88%, 11/15/19(b)		305,000		318,725
				651,369
Steel–0.24%
APERAM (Luxembourg), Sr. Unsec. Notes, 7.38%, 04/01/16(b)		150,000		130,125
United States Steel Corp., Sr. Unsec. Notes, 7.00%, 02/01/18		140,000		139,300
				269,425
Systems Software–0.48%
Allen Systems Group Inc., Sec. Gtd. Notes, 10.50%, 11/15/16(b)		615,000		538,125
Tires & Rubber–0.35%
Cooper Tire & Rubber Co., Sr. Unsec. Notes, 8.00%, 12/15/19		350,000		365,750
Goodyear Tire & Rubber Co. (The), Sr. Unsec. Gtd. Notes, 8.25%, 08/15/20		20,000		21,900
				387,650
Trading Companies & Distributors–2.18%
Avis Budget Car Rental LLC/Avis Budget Finance Inc., Sr. Unsec. Gtd. Global Notes,
8.25%, 01/15/19		585,000		583,537
9.75%, 03/15/20		70,000		72,450
H&E Equipment Services Inc., Sr. Unsec. Gtd. Global Notes, 8.38%, 07/15/16		485,000		496,519
Hertz Corp. (The), Sr. Unsec. Gtd. Global Notes,
6.75%, 04/15/19		260,000		264,550
7.38%, 01/15/21		500,000		513,750
7.50%, 10/15/18		170,000		178,075
8.88%, 01/01/14		2,569		2,572
Interline Brands, Inc., Sr. Unsec. Gtd. Global Notes, 7.00%, 11/15/18		125,000		129,688
RSC Equipment Rental Inc./RSC Holdings III LLC, Sr. Unsec. Gtd. Global Notes, 8.25%, 02/01/21		195,000		199,875
				2,441,016
Wireless Telecommunication Services–4.11%
Clearwire Communications LLC/Clearwire Finance, Inc.,
Sr. Sec. Gtd. Notes, 12.00%, 12/01/15(b)		465,000		449,887
Sr. Unsec. Gtd. Conv. Notes, 8.25%, 12/01/17(b)(h)		60,000		38,700
Cricket Communications, Inc., Sr. Sec. Gtd. Global Notes, 7.75%, 05/15/16		225,000		234,281
Sr. Unsec. Gtd. Global Notes, 7.75%, 10/15/20		820,000		721,600
Digicel Group Ltd. (Bermuda), Sr. Unsec. Notes, 8.88%, 01/15/15(b)		200,000		196,750
Digicel Ltd. (Bermuda), Sr. Unsec. Notes, 8.25%, 09/01/17(b)		255,000		258,825

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

Invesco V.I. High Yield Fund

	Principal
	Amount		Value
Wireless Telecommunication Services–(continued)
MetroPCS Wireless Inc., Sr. Unsec. Gtd. Notes,
6.63%, 11/15/20	$	235,000	$	222,075
7.88%, 09/01/18		190,000		192,969
SBA Telecommunications Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 08/15/19		240,000		262,500
Sprint Capital Corp., Sr. Unsec. Gtd. Global Notes, 6.90%, 05/01/19		250,000		205,625
Sprint Nextel Corp., Sr. Unsec. Gtd. Notes, 9.00%, 11/15/18(b)		285,000		300,319
Sr. Unsec. Notes,
8.38%, 08/15/17		340,000		307,275
11.50%, 11/15/21(b)		125,000		124,219
VimpelCom (Ireland), Unsec. Notes, 7.75%, 02/02/21(b)		400,000		343,000
Wind Acquisition Finance S.A. (Luxembourg), Sr. Sec. Gtd. Notes,
7.25%, 02/15/18(b)		200,000		181,500
11.75%, 07/15/17(b)		625,000		559,375
				4,598,900
Total U.S. Dollar Denominated Bonds and Notes (Cost $84,223,075)				83,318,275
Non-U.S. Dollar Denominated Bonds & Notes–7.42%(i)
Canada–0.22%
Gateway Casinos & Entertainment Ltd., Sec. Gtd. Notes, 8.88%, 11/15/17(b)	CAD	240,000		240,283
Croatia–0.10%
Agrokor D.D., Sr. Unsec. Gtd. Notes, 10.00%, 12/07/16(b)	EUR	90,000		108,620
Czech Republic–0.13%
CET 21 spol sro, Sr. Sec. Notes, 9.00%, 11/01/17(b)	EUR	115,000		142,147
Ireland–1.21%
Ardagh Packaging Finance PLC, Sr. Unsec. Gtd. Notes, 9.25%, 10/15/20(b)	EUR	400,000		469,831
Bord Gais Eireann, Sr. Unsec. Medium-Term Euro Notes, 5.75%, 06/16/14	EUR	255,000		313,872
Nara Cable Funding Ltd., Sr. Sec. Notes, 8.88%, 12/01/18(b)	EUR	500,000		571,110
				1,354,813
Italy–0.12%
Lottomatica SpA, REGS, Jr. Unsec. Sub. Euro Bonds, 8.25%, 03/31/66(b)	EUR	130,000		132,083
Luxembourg–2.69%
Boardriders S.A., Sr. Unsec. Gtd. Notes, 8.88%, 12/15/17(b)	EUR	315,000		358,780
Cirsa Funding Luxembourg S.A., Sr. Unsec. Gtd. Notes, 8.75%, 05/15/18(b)	EUR	180,000		191,912
REGS, Sr. Gtd. Euro Notes, 8.75%, 05/15/18(b)	EUR	150,000		159,927
Codere Finance Luxembourg S.A., Sr. Sec. Gtd. Notes, 8.25%, 06/15/15(b)	EUR	100,000		119,723
REGS, Sr. Sec. Gtd. Euro Notes, 8.25%, 06/15/15(b)	EUR	390,000		466,919
ConvaTec Healthcare S.A., Sr. Sec. Gtd. Notes, 7.38%, 12/15/17(b)	EUR	200,000		245,917
Sr. Unsec. Gtd. Notes, 10.88%, 12/15/18(b)	EUR	100,000		112,604
KION Finance S.A., Sr. Sec. Gtd Notes, 7.88%, 04/15/18(b)	EUR	200,000		192,851
Mark IV Europe Lux SCA/Mark IV USA SCA, Sr. Sec. Gtd. Notes, 8.88%, 12/15/17(b)	EUR	300,000		394,114
Sunrise Communications Holdings S.A., REGS, Sr. Sec. Gtd. Medium-Term Euro Notes, 8.50%, 12/31/18(b)	EUR	200,000		262,743
TMD Friction Finance S.A., Sr. Sec. Gtd. Bonds, 10.75%, 05/15/17(b)	EUR	210,000		284,034
Wind Acquisition Finance S.A., Sr. Gtd. Notes, 11.75%, 07/15/17(b)	EUR	100,000		107,751
Xefin Lux SCA, Sr. Sec. Notes, 8.00%, 06/01/18(b)	EUR	100,000		117,781
				3,015,056
Netherlands–1.05%
Boats Investments B.V., Sec. PIK Medium-Term Euro Notes, 11.00%, 03/31/17	EUR	81,472		62,261
Carlson Wagonlit B.V., Sr. Gtd. Floating Rate Notes, 7.34%, 05/01/15(b)(e)	EUR	140,000		150,398
Goodyear Dunlop Tires Europe B.V., Sr. Unsec. Gtd. Notes, 6.75%, 04/15/19(b)	EUR	400,000		481,480
Polish Television Holding B.V., Sr. Sec. Notes, 11.25%, 05/15/17(b)(j)	EUR	60,000		78,823
Ziggo Bond Co. B.V., Sr. Sec. Gtd. Notes, 8.00%, 05/15/18(b)	EUR	310,000		407,251
				1,180,213
Sweden–0.12%
TVN Finance Corp II A.B., Sr. Unsec. Gtd. Notes, 10.75%, 11/15/17(b)	EUR	100,000		135,254
United Kingdom–1.48%
EC Finance PLC, REGS, Sr. Sec. Gtd. Euro Notes, 9.75%, 08/01/17(b)	EUR	100,000		100,308
Exova PLC, Sr. Unsec. Notes, 10.50%, 10/15/18(b)	GBP	200,000		246,991
Infinis PLC, Sr. Sec. Notes, 9.13%, 12/15/14(b)	GBP	80,000		126,136
Kerling PLC, Sr. Sec. Gtd. Notes, 10.63%, 02/01/17(b)	EUR	130,000		149,750
Odeon & UCI Finco PLC, Sr. Sec. Gtd. Notes, 9.00%, 08/01/18(b)	GBP	210,000		300,932

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

Invesco V.I. High Yield Fund

	Principal
	Amount		Value
United Kingdom–(continued)
Pipe Holdings PLC, Sr. Sec. Gtd. Bonds, 9.50%, 11/01/15(b)	GBP	200,000	$	277,282
R&R Ice Cream PLC, Sr. Sec. Gtd. Notes, 8.38%, 11/15/17(b)	EUR	300,000		343,637
REGS, Sr. Sec. Gtd. Euro Notes, 8.38%, 11/15/17(b)	EUR	100,000		114,546
				1,659,582
United States–0.30%
CEDC Finance Corp. International Inc., Sr. Sec. Gtd. Notes, 8.88%, 12/01/16(b)	EUR	355,000		330,823
Total Non-U.S. Dollar Denominated Bonds & Notes (Cost $9,679,515)				8,298,874
	Shares
Common Stocks & Other Equity Interests–1.48%
Automobile Manufacturers–0.17%
General Motors Co.(d)(k)		4,888		99,080
General Motors Co., Wts. expiring 07/10/16(d)(k)		4,443		52,116
General Motors Co., Wts. expiring 07/10/19(d)(k)		4,443		34,744
				185,940
Broadcasting–0.00%
Adelphia Communications Corp.(l)		—		820
Adelphia Recovery Trust, Series ACC-1(l)		318,570		319
Adelphia Recovery Trust, Series Arahova(l)		109,170		4,476
				5,615
Building Products–0.01%
Nortek, Inc.(k)		215		5,624
Construction Materials–0.05%
U.S. Concrete, Inc.(k)		20,786		60,279
Integrated Telecommunication Services–0.21%
Hawaiian Telcom Holdco Inc.–Wts. expiring 10/28/15(k)		1,527		6,108
Largo Limited–Class A (Luxembourg)(k)		17,563		22,732
Largo Limited–Class B (Luxembourg)(k)		158,069		204,589
				233,429
Investment Companies–Mutual Funds–1.03%
BlackRock Corporate High Yield Fund V, Inc.		50,000		584,500
BlackRock Corporate High Yield Fund VI, Inc.		50,000		569,000
				1,153,500
Publishing–0.00%
Reader’s Digest Association Inc. (The), Wts. expiring 02/19/14(k)		669		0
Semiconductors–0.01%
Magnachip Semiconductor Corp.(k)		1,372		10,263
Total Common Stocks & Other Equity Interests (Cost $3,530,237)				1,654,650
Preferred Stocks–1.43%
Automobile Manufacturers–0.11%
General Motors Co., Series B, $2.38 Conv. Pfd.		3,580		122,615
Consumer Finance–0.65%
Ally Financial, Inc., Series A, 8.50% Pfd.		7,845		144,269
Series G, 7.00% Pfd.(b)		581		416,523
GMAC Capital Trust I, Series 2, 8.13% Jr. Gtd. Sub. Pfd.(e)		8,630		166,904
				727,696
Industrial REIT’s–0.07%
DuPont Fabros Technology, Inc., Series B, 7.63% Pfd.		3,020		75,319
Regional Banks–0.49%
Zions Bancorp., Series C, 9.50% Pfd.		21,800		550,450
Tires & Rubber–0.11%
Goodyear Tire & Rubber Co. (The), $2.94 Conv. Pfd.		2,490		121,139
Total Preferred Stocks (Cost $1,715,918)				1,597,219
	Principal
	Amount
U.S. Treasury Bills–0.56%(m)
0.06%, 05/24/12(n) (Cost $629,854)	$	630,000		629,894
Bundled Securities–0.03%
Investment Banking & Brokerage–0.03%
Targeted Return Index Securities Trust, Series HY 2006-1, Sec. Variable Rate Bonds, 7.12%, 05/01/16 (Acquired 08/15/08; Cost $28,350) (Cost $28,950)(b)(e)		30,000		29,511
	Shares
Money Market Funds–10.75%
Liquid Assets Portfolio–Institutional Class(o)		6,017,716		6,017,716
Premier Portfolio–Institutional Class(o)		6,017,715		6,017,715
Total Money Market Funds (Cost $12,035,431)				12,035,431
TOTAL INVESTMENTS–96.11% (Cost $111,842,980)				107,563,854
OTHER ASSETS LESS LIABILITIES–3.89%				4,355,882
NET ASSETS–100.00%			$	111,919,736

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

Invesco V.I. High Yield 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
REGS	– Regulation S
REIT	– Real Estate Investment Trust
Sec.	– Secured
Sr.	– Senior
Sub.	– Subordinated
Unsec.	– Unsecured
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, 2011 was $35,600,798, which represented 31.81% of the Trust’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, 2011 was $742,763, which represented 0.66% of the Fund’s Net Assets.
(d)	Acquired as part of the General Motors reorganization.
(e)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2011.
(f)	Interest payments have been suspended under European Union agreement for 24 months beginning April 30, 2010.
(g)	Perpetual bond with no specified maturity date.
(h)	Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put.
(i)	Foreign denominated security. Principal amount is denominated in currency indicated.
(j)	Step coupon bond issued at discount. The interest rate represents the coupon rate at which the bond will accrue at a specified future date.
(k)	Non-income producing security.
(l)	Non-income producing security acquired as part of the Adelphia Communications bankruptcy reorganization.
(m)	Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund.
(n)	A portion of the principal balance was pledged as collateral for open credit default swap contracts. See Note 1M and Note 4.
(o)	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, 2011

Assets:
Investments, at value (Cost $99,807,549)	$	95,528,423
Investments in affiliated money market funds, at value and cost		12,035,431
Total investments, at value (Cost $111,842,980)		107,563,854
Foreign currencies, at value (Cost $474,445)		470,094
Receivable for:
Investments sold		82,854
Fund shares sold		2,288,053
Dividends and interest		1,773,310
Foreign currency contracts		512,358
Unrealized appreciation on swap agreements		17,439
Investment for trustee deferred compensation and retirement plans		38,719
Total assets		112,746,681
Liabilities:
Payable for:
Investments purchased		353
Fund shares reacquired		206,043
Accrued fees to affiliates		101,955
Accrued other operating expenses		49,658
Trustee deferred compensation and retirement plans		47,020
Premiums received on swap agreements		421,916
Total liabilities		826,945
Net assets applicable to shares outstanding	$	111,919,736
Net assets consist of:
Shares of beneficial interest	$	121,938,972
Undistributed net investment income		5,493,549
Undistributed net realized gain (loss)		(11,717,723	)
Unrealized appreciation (depreciation)		(3,795,062	)
	$	111,919,736
Net Assets:
Series I	$	106,556,691
Series II	$	5,363,045
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		21,148,580
Series II		1,065,588
Series I:
Net asset value per share	$	5.04
Series II:
Net asset value per share	$	5.03

Statement of Operations

For the year ended December 31, 2011

Investment income:
Interest (net of foreign withholding taxes of $(285))	$	6,132,993
Dividends		143,967
Dividends from affiliated money market funds (includes securities lending income of $14)		5,225
Total investment income		6,282,185
Expenses:
Advisory fees		512,057
Administrative services fees		228,977
Custodian fees		25,198
Distribution fees — Series II		5,398
Transfer agent fees		22,690
Trustees’ and officers’ fees and benefits		20,526
Other		62,780
Total expenses		877,626
Less: Fees waived		(191,950	)
Net expenses		685,676
Net investment income		5,596,509
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		1,963,734
Foreign currencies		(8,212	)
Foreign currency contracts		27,134
Swap agreements		6,312
		1,988,968
Change in net unrealized appreciation (depreciation) of:
Investment securities		(8,420,039	)
Foreign currencies		(15,872	)
Foreign currency contracts		536,238
Swap agreements		17,439
		(7,882,234	)
Net realized and unrealized gain (loss)		(5,893,266	)
Net increase (decrease) in net assets resulting from operations	$	(296,757	)

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, 2011 and 2010

	December 31,			December 31,
	2011			2010
Operations:
Net investment income	$	5,596,509		$	4,456,145
Net realized gain		1,988,968			3,536,654
Change in net unrealized appreciation (depreciation)		(7,882,234	)		(977,968	)
Net increase (decrease) in net assets resulting from operations		(296,757	)		7,014,831
Distributions to shareholders from net investment income:
Series I		(4,229,022	)		(5,284,452	)
Series II		(46,712	)		(38,411	)
Total distributions from net investment income		(4,275,734	)		(5,322,863	)
Share transactions–net:
Series I		55,281,125			(6,523,411	)
Series II		4,911,560			17,659
Net increase (decrease) in net assets resulting from share transactions		60,192,685			(6,505,752	)
Net increase (decrease) in net assets		55,620,194			(4,813,784	)
Net assets:
Beginning of year		56,299,542			61,113,326
End of year (includes undistributed net investment income of $5,493,549 and $4,198,259, respectively)	$	111,919,736		$	56,299,542

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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. 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.

Invesco V.I. High Yield Fund

	Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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 V.I. High Yield 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.	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 affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
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.
M.	Swap Agreements — The Fund may enter into various swap transactions, including interest rate, total return, index, currency exchange rate and credit default swap contracts (“CDS”) for investment purposes or to manage interest rate, currency or credit risk.
	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 V.I. High Yield 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. If a counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties, the Fund may experience significant delays in obtaining any recovery in a bankruptcy or other reorganization proceeding. The Fund may obtain only limited recovery or may obtain no recovery in such circumstances.

  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.

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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective May 2, 2011, the Adviser has contractually agreed, through at least June 30, 2013, 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. Prior to May 2, 2011, the Adviser had contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of 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 items or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2013.

Invesco V.I. High Yield Fund

  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 (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $191,950.

  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, 2011, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $178,977 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, Invesco Ltd., 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, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	14,642,636	$	644,664	$	0	$	15,287,300
U.S. Treasury Securities		—		629,894		—		629,894
Corporate Debt Securities		—		83,337,836		9,950		83,347,786
Foreign Corporate Debt Securities		—		8,298,874				8,298,874
	$	14,642,636	$	92,911,268	$	9,950	$	107,563,854
Foreign Currency Contracts*		—		476,920		—		476,920
Swap Agreements*		—		17,439		—		17,439
Total Investments	$	14,642,636	$	93,405,627	$	9,950	$	108,058,213

*  Unrealized appreciation.

Invesco V.I. High Yield Fund

NOTE 4—Derivative Investments

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, 2011:

	Value
Risk Exposure/Derivative Type	Assets		Liabilities
Credit risk
Swap agreements(a)	$	17,439	$	—
Currency risk
Foreign currency contracts(b)		512,358		—
	$	529,797	$	—

(a)	Value is disclosed on the Statement of Assets and Liabilities as Unrealized appreciation on swap agreements.
(b)	Value is disclosed on the Statement of Assets and Liabilities as Foreign currency contracts.

Effect of Derivative Instruments for the year ended December 31, 2011

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		Foreign Currency
	Agreements*		Contracts*
Realized Gain (Loss)
Credit risk	$	6,312	$	—
Currency risk		—		27,134
Change in Unrealized Appreciation
Credit risk		17,439		—
Currency risk		—		536,238
Total	$	23,751	$	563,372

*  The average notional value of swap agreements and foreign currency contracts outstanding during the period was $1,406,667 and $8,450,691, respectively.

Open Foreign Currency Contracts
Settlement		Contract to				Notional		Unrealized
Date	Counterparty	Deliver		Receive		Value		Appreciation
02/09/12	RBC Dain Rauscher	EUR	5,527,000	USD	7,609,132	$	7,156,142	$	452,990
02/17/12	Morgan Stanley	GBP	777,000	USD	1,230,363		1,206,433		23,930
Total open foreign currency contracts						$	8,362,575	$	476,920

Closed Foreign Currency Contracts
Closed		Contract to				Notional
Date	Counterparty	Deliver		Receive		Value		Realized Gain
11/21/11	RBC Dain Rauscher	EUR	207,000	USD	284,981	$	280,322	$	4,659
11/25/11	RBC Dain Rauscher	EUR	155,000	USD	213,392		206,118		7,274
11/29/11	RBC Dain Rauscher	EUR	141,000	USD	194,117		187,987		6,130
12/15/11	RBC Dain Rauscher	EUR	79,000	USD	108,761		102,720		6,041
12/22/11	Morgan Stanley	GBP	22,000	USD	34,837		34,475		362
12/22/11	RBC Dain Rauscher	EUR	157,000	USD	216,145		205,173		10,972
Total closed foreign currency contracts						$	1,016,795	$	35,438
Total foreign currency contracts								$	512,358

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

Invesco V.I. High Yield Fund

Open Credit Default Swap Agreements

Value

Implied

Notional

Unrealized

Buy/Sell

(Pay)/Receive

Expiration

Credit

Amount

Appreciation

Counterparty

Reference Entity

Protection

Fixed Rate

Date

Spread(a)

(000)

(Depreciation)

JPMorgan Chase Bank

CDX North American High Yield

Sell

5.00

%

12/20/2016

6.80

%

4,900

$

19,664

(b)

JPMorgan Chase Bank

CDX North American High Yield

Sell

5.00

%

12/20/2016

6.80

%

980

(2,225

)(b)

Total Credit Default Swap Agreements

$

17,439

(a)

Implied credit spreads represent the current level at which protection could be bought or sold given the terms of the existing credit default swap contract and serve as an indicator of the current status of the payment/performance risk of the credit default swap contract. An implied credit spread that has widened or increased since entry into the initial contract may indicate a deteriorating credit profile and increased risk of default for the reference entity. A declining or narrowing spread may indicate an improving credit profile or decreased risk of default for the reference entity. Alternatively, credit spreads may increase or decrease reflecting the general tolerance for risk in the credit markets generally.

(b)

Includes unamortized premium at period-end of $421,916.

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, 2011, the Fund paid legal fees of $1,200 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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

Tax Character of Distributions to Shareholders Paid During the Years Ended December 31, 2011 and 2010:

	2011		2010
Ordinary income	$	4,275,733	$	5,322,863

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	5,538,695
Net unrealized appreciation (depreciation) — investments		(4,335,103	)
Net unrealized appreciation — other investments		7,145
Temporary book/tax differences		(45,146	)
Capital loss carryforward		(11,184,827	)
Shares of beneficial interest		121,938,972
Total net assets	$	111,919,736

Invesco V.I. High Yield Fund

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. Under these limitation rules, the Fund is limited to utilizing $3,605,428 of capital loss carryforward in the fiscal year ending December 31, 2012.

  The Fund utilized $2,269,937 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, 2011, which expires as follows:

Capital Loss Carryforward
Expiration	Short-Term		Long-Term		Total
December 31, 2015	$	329,831	$	—	$	329,831
December 31, 2016		9,020,578		—		9,020,578
December 31, 2017		1,834,418		—		1,834,418
Total capital loss carryforward	$	11,184,827	$	—	$	11,184,827

*  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, 2011 was $67,945,216 and $44,444,414, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	2,271,515
Aggregate unrealized (depreciation) of investment securities		(6,606,618	)
Net unrealized appreciation (depreciation) of investment securities	$	(4,335,103	)
Cost of investments for tax purposes is $111,898,957.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of capital loss carryforward, on December 31, 2011, undistributed net investment income was decreased by $21,452, undistributed net realized gain was increased by $2,340,736 and shares of beneficial interest decreased by $2,319,284. Further, as a result of tax deferrals acquired in the reorganization of Invesco Van Kampen V.I. High Yield Fund into the Fund, undistributed net investment income was decreased by $4,033, undistributed net realized gain was decreased by $10,506,909 and shares of beneficial interest increased by $10,510,942. These reclassifications had no effect on the net assets of the Fund.

Invesco V.I. High Yield Fund

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		11,649,443		$	59,272,659			4,999,888		$	26,982,826
Series II		1,343,316			6,766,855			16,305			86,476
Issued as reinvestment of dividends:
Series I		814,841			4,229,022			1,018,199			5,284,452
Series II		9,000			46,711			7,401			38,411
Issued in connection with acquisitions:(b)
Series I		6,239,174			32,616,526			—			—
Series II		1,983			10,369			—			—
Reacquired:
Series I		(7,984,170	)		(40,837,082	)		(7,205,545	)		(38,790,689	)
Series II		(381,629	)		(1,912,375	)		(19,746	)		(107,228	)
Net increase (decrease) in share activity		11,691,958		$	60,192,685			(1,183,498	)	$	(6,505,752	)

(a)	There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 62% of the outstanding shares of the Fund. 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 Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.
(b)	As of the opening of business on May 2, 2011, the Fund acquired all the net assets of Invesco Van Kampen V.I. High Yield Fund (the “Target Fund”) pursuant to a plan of reorganization approved by the Trustees of the Fund on November 10, 2010 and by the shareholders of the Target Fund on April 1, 2011. The acquisition was accomplished by a tax-free exchange of 6,241,157 shares of the Fund for 2,940,652 shares outstanding of the Target Fund as of the close of business on April 29, 2011. Each class of the Target Fund was exchanged for the like class of shares of the Fund, based on the relative net asset value of the Target Fund to the net asset value of the Fund on the close of business, April 29, 2011. The Target Fund’s net assets at that date of $32,626,895 including $1,685,415 of unrealized appreciation, was combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $63,972,559. The net assets immediately after the acquisition were $96,599,454.
	The pro forma results of operations for the year ended December 31, 2011 assuming the reorganization had been completed on January 1, 2011, the beginning of the annual reporting period, are as follows:

Net investment income	$	6,329,832
Net realized/unrealized gains (losses)		(4,990,283	)
Change in net assets resulting from operations	$	1,339,549

The combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Target Fund that has been included in the Fund’s Statement of Operations since May 2, 2011.

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) on																to average			to average net			Ratio of net
	Net asset				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 12/31/11	$	5.35	$	0.35	$	(0.29	)	$	0.06		$	(0.37	)	$	5.04		0.96	%	$	106,557		0.83	%(d)		1.06	%(d)		6.84	%(d)		71	%
Year ended 12/31/10		5.22		0.43		0.26			0.69			(0.56	)		5.35		13.57			55,803		0.95			1.17			8.04			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
Series II
Year ended 12/31/11		5.35		0.33		(0.29	)		0.04			(0.36	)		5.03		0.61			5,363		1.08	(d)		1.31	(d)		6.59	(d)		71
Year ended 12/31/10		5.22		0.42		0.26			0.68			(0.55	)		5.35		13.27			497		1.20			1.42			7.79			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

(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. For the period ending December 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $30,901,742 and sold of $8,109,618 in effect to realign the Fund’s portfolio holdings after the reorganization of Invesco Van Kampen V.I. High Yield Fund into the Fund.
(d)	Ratios are based on average daily net assets (000’s) of $79,770 and $2,159 for Series I and Series II, respectively.

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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 17, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	976.70	$	3.94	$	1,021.22	$	4.02		0.79	%
Series II		1,000.00		974.80		5.18		1,019.96		5.30		1.04

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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, 2011:

Federal and State Income Tax
Corporate Dividends Received Deduction*	0.00%

*  The above percentages are 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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. High Yield Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. High Yield Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. High Yield Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. High Yield Fund

Invesco V.I. High Yield Securities Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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

For the year ended December 31, 2011, Invesco V.I. High Yield Securities Fund underperformed the Fund’s broad market/style-specific index, the Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index. This was due mainly to the Fund’s issuer selection and its underweight exposure to higher quality credits during the 12-month reporting period.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	1.99	%
Series II Shares	1.65
Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index▼ (Broad Market/Style-Specific Index)	4.96

Source(s): ^▼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, although we tend to underweight the lowest-quality bonds in the asset class. 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 ongoing 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

The high yield market depends heavily on the underlying health of the economy, principally in the U.S. and, secondarily, in Europe. Growth remained slow as deleveraging and caution constrained economic activity and job creation. The situation in Europe was generally worse than in the U.S., owing to the sovereign debt crisis, slower economic growth and the threat of renewed recession.

     Financial stimulus remained robust and appeared likely to stay accommodative. While the U.S. Federal Reserve’s (the Fed) second round of quantitative easing ended, the Fed committed to keeping short-term interest rates anchored near zero through mid-2013. (In January 2012, after the close of the reporting period, the Fed extended its commitment to keep short-term interest rates near zero through late 2014.) In Europe, the tightening cycle appeared to have ended, as interest rates were cut. In this way, fixed income asset classes were broadly supported by the underlying interest rate structure.

     The high yield market moved from becoming increasingly aggressive early in the reporting period to increasingly defensive as the reporting period ended. The change was due to slower growth expectations, including a U.S. growth scare over the summer and fears of a deepening financial crisis centered in the eurozone. Volatility and correlations were high as the high yield market experienced what is generally called the “risk on/risk off” market.

Portfolio Composition

By credit quality

A	0.8	%
BBB	5.4
BB	33.5
B	45.6
CCC	8.8
CC	0.3
C	0.1
Non-Rated	5.1
Cash	0.4

Top 10 Fixed Income Issuers*
1.	Building Materials Corp. of America	1.5	%
2.	International Lease Finance Corp.	1.5
3.	Ford Motor Co.	1.3
4.	MGM Resorts International	1.2
5.	Tenet Healthcare Corp.	1.1
6.	Continental Airlines Pass Through Trust	1.1
7.	Intelsat Jackson Holdings S.A.	1.1
8.	Nortek Inc.	1.1
9.	Cricket Communications, Inc.	1.0
10.	CIT Group Inc.	1.0

Top Five Industries*

1.	Casinos & Gaming	6.7	%
2.	Building Products	5.8
3.	Wireless Telecommunication Services	5.4
4.	Oil & Gas Exploration & Production	5.2
5.	Airlines	3.3

Total Net Assets	$	25.7 million
Total Number of Holdings*		304

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 & 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 & Poor’s rating methodology, please visit standardandpoors.com and select “Understanding Ratings” under “Ratings Resources” on the homepage.

Invesco V.I. High Yield Securities Fund

     Defaults in the high yield bond market remained muted during 2011. The annualized par-weighted default rate for the fiscal year was only 2.03% according to Standard & Poor’s. Very low defaults are to be expected after periods of high defaults and recession. We expect a gradual increase in defaults as we exit the immediate post-downturn period, although without renewed recession, we expect defaults will likely remain below average.

     The broad U.S. high yield bond market, as measured by the Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index, generated a positive total return for the year ended December 31, 2011. In August and September 2011, debt concerns in Europe and the downgrade of U.S. debt by Standard & Poor’s caused investors to scale back their risk profile. The risk-on trade returned at the end of the reporting period, as we had potentially good news from Europe and as U.S. economic data improved.

     In this environment, the Fund generated positive returns for the 12-month reporting period but underperformed its style-specific index.

     The main detractors from Fund performance for the year were issuer selection and overweight exposure to building materials bonds. The Fund’s issuer selection in the automotive industry also detracted from performance during the year; our holding in one of the big U.S. manufacturers sold off. Issuer selection in the food and beverage industry hurt, as some of our off-index issuers experienced overselling in their bonds. In the financials sector, the non-captive diversified industry was one of the main detractors from Fund performance.

     Investments that contributed to the Fund’s performance varied. The Fund’s primary contributors to performance were an overweight position and issuer selection in the independent industry, and issuer selection and an underweight position in the media non-cable industry. The Fund’s issuer selection in the technology industry was beneficial throughout the reporting period. Avoidance of the non-captive consumer industry was beneficial, as that was one of the worst performers during the reporting period. Finally, issuer selection in the aerospace/ defense industry also proved beneficial to Fund performance.

     At the close of the reporting period, we remained generally positive in our assessment of high yield securities. However, while the economy appeared to be strengthening in the U.S., substantial obstacles remained, including resolution of U.S. deficits (the pending fiscal adjustment) and the European sovereign debt situation and its potential bank solvency and credit implications.

     Thank you for investing in Invesco V.I. High Yield Securities 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.

Peter Ehret

Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. High Yield Securities Fund. He joined Invesco in 2001. Mr. Ehret 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(es)

Fund and index data from 12/31/01*

1

Source: Lipper Inc.

*

During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (3/9/84)		4.07	%
10	Years	6.59
5	Years	5.41
1	Year	1.99
Series II Shares
Inception (6/5/00)		-1.34	%
10	Years	6.34
5	Years	5.17
1	Year	1.65

Effective June 1, 2010, Class X and Class Y shares of the predecessor fund, Morgan Stanley Variable Investment High Yield Portfolio, 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 and Series II shares was 1.69% and 1.94%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     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, 2011, 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

Convertible securities risk. The Fund may own convertible securities, the value of which may be affected by market interest rates, the risk that the issuer will default, the value of the underlying stock or the right of the issuer to buy back the convertible securities.

     Defaulted securities risk. Defaulted securities involve the substantial risk that principal will not be repaid. Defaulted securities and any securities received in an exchange for such securities may be subject to restrictions on resale.

     Derivatives risk. 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. A 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.

     Developing markets securities risk. 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.

     Fixed-income securities risk. Principal risks of investing in the Fund are associated with its fixed-income securities investments that are rated below investment grade. All fixed-income securities, such as junk bonds, are subject to two types of risk: credit risk and interest rate risk. Credit risk refers to the possibility that the issuer of a security will be unable to make interest payments and/or repay the principal on its debt. 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 interest.)

     Lower rated securities (junk bonds) risk. Junk bonds are subject to greater risk of loss of income and principal than higher rated securities and may have a higher incidence of default than higher rated securities. The prices of junk bonds are likely to be more sensitive to adverse economic changes or individual corporate developments than higher rated securities. Rule 144A securities could have the effect of increasing the level of Fund illiquidity to the extent the Fund may be unable to find qualified institutional buyers interested in purchasing the securities.

     Foreign risks. 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.

     Public bank loans risk. 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.

     Swaps risk. 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. Swaps are subject to credit risk and counterparty risk.

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, 2011

	Principal
	Amount		Value
U.S. Dollar Denominated Bonds and Notes–87.16%
Aerospace & Defense–0.93%
BE Aerospace, Inc., Sr. Unsec. Notes, 6.88%, 10/01/20	$	50,000	$	54,875
Bombardier Inc. (Canada), Sr. Unsec. Notes, 7.75%, 03/15/20(b)		20,000		21,900
Huntington Ingalls Industries Inc., Sr. Unsec. Gtd. Notes,
6.88%, 03/15/18(b)		20,000		19,750
7.13%, 03/15/21(b)		65,000		64,187
Spirit Aerosystems Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 12/15/20		55,000		57,613
Triumph Group, Inc., Sr. Unsec. Gtd. Sub. Global Notes, 8.00%, 11/15/17		20,000		21,500
				239,825
Airlines–3.29%
American Airlines Inc., Sr. Sec. Gtd. Notes, 7.50%, 03/15/16(b)(c)		155,000		111,600
American Airlines Inc., Series 2011-1, Class B, Sec. Gtd. Pass Through Ctfs., 7.00%, 01/31/18(b)		29,802		26,524
Continental Airlines Inc., Series 2007-1, Class C, Sec. Sub. Global Pass Through Ctfs., 7.34%, 04/19/14		172,318		170,594
Series 2009-2, Class B, Sec. Global Pass Through Ctfs., 9.25%, 05/10/17		113,160		116,803
Delta Air Lines, Inc., Sec. Notes, 12.25%, 03/15/15(b)		150,000		159,000
Series 2010-1, Class B, Sec. Pass Through Ctfs., 6.38%, 01/02/16(b)		30,000		27,900
Series 2010-2, Class B, Sec. Pass Through Ctfs., 6.75%, 11/23/15(b)		40,000		37,200
UAL Pass Through Trust, Series 2007-1, Class A, Sec. Gtd. Global Pass Through Ctfs., 6.64%, 07/02/22		36,033		35,920
Series 2009-2, Class B, Sec. Gtd. Pass Through Ctfs., 12.00%, 01/15/16(b)		81,118		84,768
US Airways Pass Through Trust, Series 1998-1, Class C, Sec. Pass Through Ctfs., 6.82%, 01/30/14		83,075		74,352
				844,661
Alternative Carriers–2.39%
Cogent Communications Group, Inc., Sr. Sec. Gtd. Notes, 8.38%, 02/15/18(b)		85,000		87,762
Intelsat Jackson Holdings S.A. (Luxembourg), Sr. Unsec. Gtd. Global Notes, 7.25%, 10/15/20		270,000		276,075
Level 3 Communications Inc., Sr. Unsec. Global Notes, 11.88%, 02/01/19		90,000		96,075
Level 3 Financing Inc.,
Sr. Unsec. Gtd. Global Notes,
9.25%, 11/01/14		71,000		72,598
9.38%, 04/01/19		45,000		47,025
Sr. Unsec. Gtd. Notes, 8.13%, 07/01/19(b)		35,000		34,650
				614,185
Aluminum–0.50%
Century Aluminum Co., Sr. Sec. Gtd. Notes, 8.00%, 05/15/14		130,000		129,431
Apparel Retail–1.18%
Express LLC/Express Finance Corp., Sr. Unsec. Gtd. Global Notes, 8.75%, 03/01/18		90,000		98,325
Gap, Inc. (The), Sr. Unsec. Notes, 5.95%, 04/12/21		95,000		90,844
J. Crew Group, Inc., Sr. Unsec. Gtd. Global Notes, 8.13%, 03/01/19		75,000		71,812
Limited Brands Inc., Sr. Unsec. Gtd. Notes, 6.63%, 04/01/21		40,000		42,600
				303,581
Apparel, Accessories & Luxury Goods–2.45%
Hanesbrands Inc., Sr. Unsec. Gtd. Global Notes, 6.38%, 12/15/20		80,000		81,800
Jones Group Inc. (The), Sr. Unsec. Notes, 6.88%, 03/15/19		210,000		190,050
Levi Strauss & Co., Sr. Unsec. Global Notes, 7.63%, 05/15/20		165,000		169,537
Quiksilver Inc., Sr. Unsec. Gtd. Global Notes, 6.88%, 04/15/15		200,000		186,000
				627,387
Auto Parts & Equipment–0.99%
Allison Transmission Inc., Sr. Unsec. Gtd Notes, 7.13%, 05/15/19(b)		100,000		98,500
Dana Holding Corp., Sr. Unsec. Notes, 6.75%, 02/15/21		85,000		87,337
Tenneco Inc., Sr. Unsec. Gtd. Global Notes,
6.88%, 12/15/20		25,000		25,875
7.75%, 08/15/18		40,000		42,500
				254,212
Automobile Manufacturers–2.04%
Chrysler Group LLC/CG Co-Issuer Inc., Sr. Sec. Gtd. Notes, 8.00%, 06/15/19(b)		200,000		183,500
Ford Motor Co., Sr. Unsec. Global Notes, 7.45%, 07/16/31		282,000		338,400

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
Automobile Manufacturers–(continued)
Motors Liquidation Corp., Sr. Unsec. Notes, 8.38%, 07/15/33(c)(d)	$	305,000	$	2,532
				524,432
Biotechnology–0.34%
Grifols Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 02/01/18		30,000		31,650
Savient Pharmaceuticals Inc., Sr. Unsec. Conv. Notes, 4.75%, 02/01/18		30,000		14,400
STHI Holding Corp., Sec. Gtd. Notes, 8.00%, 03/15/18(b)		40,000		41,300
				87,350
Broadcasting–0.60%
Allbritton Communications Co., Sr. Unsec. Global Notes, 8.00%, 05/15/18		45,000		45,000
Clear Channel Communications, Inc., Sr. Sec. Gtd. Global Notes, 9.00%, 03/01/21		130,000		109,850
				154,850
Building Products–5.31%
American Standard Americas, Sr. Sec. Notes, 10.75%, 01/15/16(b)		80,000		47,600
Associated Materials LLC, Sr. Sec. Gtd. Global Notes, 9.13%, 11/01/17		165,000		146,438
Building Materials Corp. of America, Sr. Sec. Gtd. Notes, 7.50%, 03/15/20(b)		160,000		172,800
Sr. Unsec. Notes,
6.75%, 05/01/21(b)		40,000		42,200
6.88%, 08/15/18(b)		150,000		157,500
Gibraltar Industries Inc., Series B, Sr. Unsec. Gtd. Sub. Global Notes, 8.00%, 12/01/15		105,000		105,525
Nortek Inc., Sr. Unsec. Gtd. Notes, 8.50%, 04/15/21(b)		250,000		212,812
10.00%, 12/01/18(b)		75,000		71,438
Ply Gem Industries Inc., Sr. Sec. Gtd. Global Notes, 8.25%, 02/15/18		125,000		109,531
Sr. Unsec. Gtd. Sub. Global Notes, 13.13%, 07/15/14		55,000		48,950
Roofing Supply Group LLC/Roofing Supply Finance Inc., Sr. Sec. Notes, 8.63%, 12/01/17(b)		158,000		161,555
USG Corp., Sr. Unsec. Gtd. Notes,
8.38%, 10/15/18(b)		10,000		9,250
9.75%, 08/01/14(b)		20,000		20,400
Sr. Unsec. Notes, 9.75%, 01/15/18		65,000		55,900
				1,361,899
Cable & Satellite–0.88%
EH Holding Corp., Sr. Sec. Gtd. Notes, 6.50%, 06/15/19(b)		40,000		41,900
Sr. Unsec. Gtd. Notes, 7.63%, 06/15/21(b)		25,000		26,344
Kabel BW GmbH (Germany), Sr. Sec. Gtd. Notes, 7.50%, 03/15/19(b)		150,000		158,250
				226,494
Casinos & Gaming–5.71%
Ameristar Casinos Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 04/15/21		115,000		119,025
Caesars Entertainment Operating Co. Inc., Sec. Gtd. Global Notes, 12.75%, 04/15/18		85,000		68,000
Sr. Sec. Gtd. Global Notes, 11.25%, 06/01/17		100,000		106,750
Sr. Unsec. Gtd. Global Bonds, 5.63%, 06/01/15		115,000		64,400
CityCenter Holdings LLC/CityCenter Finance Corp., Sr. Sec. Gtd. Notes, 7.63%, 01/15/16(b)		5,000		5,138
Sr. Sec. Gtd. PIK Notes, 10.75%, 01/15/17(b)		81,389		84,238
Mandalay Resort Group, Sr. Unsec. Gtd. Sub. Notes, 7.63%, 07/15/13		100,000		99,750
MGM Resorts International, Sr. Unsec. Gtd. Global Notes,
6.63%, 07/15/15		65,000		62,319
6.75%, 04/01/13		245,000		248,062
Pinnacle Entertainment Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 08/01/17		45,000		47,812
Resort at Summerlin L.P., Series B, Sr. Unsec. Sub. Notes, 13.00%, 12/15/07(c)		7,210,050		—
Scientific Games International Inc., Sr. Unsec. Gtd. Sub. Global Notes, 9.25%, 06/15/19		80,000		85,000
Seneca Gaming Corp., Sr. Unsec. Gtd. Notes, 8.25%, 12/01/18(b)		65,000		63,537
Snoqualmie Entertainment Authority, Sr. Sec. Floating Rate Notes, 4.18%, 02/01/14(b)(e)		75,000		67,125
Sr. Sec. Notes, 9.13%, 02/01/15(b)		150,000		144,000
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., Sec. Gtd. First Mortgage Global Notes, 7.75%, 08/15/20		180,000		200,250
				1,465,406
Coal & Consumable Fuels–0.39%
CONSOL Energy Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 04/01/20		35,000		38,850
Peabody Energy Corp., Sr. Unsec. Gtd. Notes, 6.00%, 11/15/18(b)		60,000		61,500
				100,350
Communications Equipment–0.61%
Avaya Inc., Sr. Sec. Gtd. Notes, 7.00%, 04/01/19(b)		160,000		156,000

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
Computer & Electronics Retail–0.31%
Rent-A-Center Inc., Sr. Unsec. Gtd Global Notes, 6.63%, 11/15/20	$	80,000	$	80,800
Computer Storage & Peripherals–0.43%
Seagate HDD Cayman, Sr. Unsec. Gtd. Notes,
7.00%, 11/01/21(b)		30,000		30,900
7.75%, 12/15/18(b)		75,000		80,250
				111,150
Construction & Engineering–1.38%
Dycom Investments Inc., Sr. Unsec. Gtd. Sub. Global Notes, 7.13%, 01/15/21		115,000		116,725
Tutor Perini Corp., Sr. Unsec. Gtd. Global Notes, 7.63%, 11/01/18		250,000		236,250
				352,975
Construction & Farm Machinery & Heavy Trucks–1.59%
Case New Holland Inc., Sr. Unsec. Gtd. Global Notes, 7.88%, 12/01/17		75,000		85,125
Commercial Vehicle Group, Inc., Sr. Sec. Gtd. Notes, 7.88%, 04/15/19(b)		95,000		92,031
Manitowoc Co. Inc. (The), Sr. Unsec. Gtd. Notes, 8.50%, 11/01/20		50,000		52,500
Navistar International Corp., Sr. Unsec. Gtd. Notes, 8.25%, 11/01/21		85,000		90,525
Titan International Inc., Sr. Sec. Gtd. Global Notes, 7.88%, 10/01/17		85,000		88,825
				409,006
Construction Materials–1.22%
Cemex Finance LLC, Sr. Sec. Gtd. Bonds, 9.50%, 12/14/16(b)		100,000		87,787
Texas Industries Inc., Sr. Unsec. Gtd. Global Notes, 9.25%, 08/15/20		250,000		225,000
				312,787
Consumer Finance–1.52%
Ally Financial Inc., Sr. Unsec. Gtd. Global Notes,
7.50%, 09/15/20		75,000		76,125
8.00%, 03/15/20		120,000		123,600
8.00%, 11/01/31		15,000		14,513
Ford Motor Credit Co. LLC, Sr. Unsec. Notes, 8.00%, 12/15/16		45,000		51,637
National Money Mart Co. (Canada), Sr. Unsec. Gtd. Global Notes, 10.38%, 12/15/16		115,000		123,337
				389,212
Data Processing & Outsourced Services–0.91%
CoreLogic, Inc., Sr. Unsec. Gtd. Notes, 7.25%, 06/01/21(b)		140,000		134,400
First Data Corp., Sr. Sec. Gtd. Notes, 7.38%, 06/15/19(b)		45,000		42,525
SunGard Data Systems Inc., Sr. Unsec. Gtd. Global Notes,
7.38%, 11/15/18		30,000		30,825
7.63%, 11/15/20		25,000		25,812
				233,562
Department Stores–0.19%
Sears Holdings Corp., Sr. Sec. Gtd. Global Notes, 6.63%, 10/15/18		65,000		49,725
Distillers & Vintners–0.77%
CEDC Finance Corp. International Inc., Sr. Sec. Gtd. Notes, 9.13%, 12/01/16(b)		100,000		70,500
Constellation Brands Inc., Sr. Unsec. Gtd. Global Notes, 7.25%, 05/15/17		115,000		126,212
				196,712
Diversified Banks–0.10%
RBS Capital Trust II, Jr. Unsec. Gtd. Sub. Global Bonds, 6.43%(f)(g)		50,000		25,875
Diversified Metals & Mining–0.80%
FMG Resources Pty. Ltd. (Australia), Sr. Unsec. Gtd. Notes,
6.38%, 02/01/16(b)		90,000		87,527
7.00%, 11/01/15(b)		10,000		10,150
Midwest Vanadium Pty. Ltd. (Australia), Sr. Sec. Gtd. Mortgage Notes, 11.50%, 02/15/18(b)		30,000		22,060
Vedanta Resources PLC (United Kingdom), Sr. Unsec. Notes, 9.50%, 07/18/18(b)		100,000		85,555
				205,292
Electrical Components & Equipment–0.10%
Polypore International Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 11/15/17		25,000		25,938
Electronic Manufacturing Services–0.30%
Sanmina-SCI Corp., Sr. Unsec. Gtd. Notes, 7.00%, 05/15/19(b)		80,000		76,600
Environmental & Facilities Services–0.13%
EnergySolutions Inc./LLC, Sr. Unsec. Gtd. Global Notes, 10.75%, 08/15/18		35,000		32,900
Food Retail–0.26%
Simmons Foods Inc., Sec. Notes, 10.50%, 11/01/17(b)		80,000		67,200
Forest Products–0.27%
Millar Western Forest Products Ltd. (Canada), Sr. Unsec. Notes, 8.50%, 04/01/21(b)		85,000		65,663
Sino-Forest Corp. (Canada), Sr. Unsec. Gtd. Notes, 6.25%, 10/21/17(b)		10,000		2,750
				68,413

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
Gas Utilities–0.66%
Ferrellgas L.P./Ferrellgas Finance Corp., Sr. Unsec. Global Notes, 6.50%, 05/01/21	$	90,000	$	79,650
Suburban Propane Partners, L.P./Suburban Energy Finance Corp., Sr. Unsec. Notes, 7.38%, 03/15/20		85,000		88,825
				168,475
Health Care Equipment–0.42%
DJO Finance LLC/Corp.,
Sr. Unsec. Gtd. Global Notes,
7.75%, 04/15/18		10,000		7,650
10.88%, 11/15/14		90,000		84,375
Sr. Unsec. Gtd. Sub. Global Notes, 9.75%, 10/15/17		20,000		15,600
				107,625
Health Care Facilities–2.22%
HCA, Inc., Sr. Sec. Gtd. Global Notes, 7.88%, 02/15/20		105,000		113,925
Health Management Associates Inc., Sr. Sec. Gtd. Notes, 6.13%, 04/15/16		30,000		31,125
HealthSouth Corp., Sr. Unsec. Gtd. Notes,
7.25%, 10/01/18		60,000		59,700
7.75%, 09/15/22		35,000		34,563
Select Medical Holdings Corp., Sr. Unsec. Floating Rate Global Notes, 6.27%, 09/15/15(e)		45,000		38,925
Tenet Healthcare Corp., Sr. Sec. Gtd. Global Notes, 10.00%, 05/01/18		135,000		154,912
Sr. Unsec. Global Notes,
8.00%, 08/01/20		20,000		20,000
9.25%, 02/01/15		110,000		117,150
				570,300
Health Care Services–0.38%
Radnet Management Inc., Sr. Unsec. Gtd. Global Notes, 10.38%, 04/01/18		80,000		71,600
Universal Hospital Services Inc., Sec. Gtd. PIK Global Notes, 8.50%, 06/01/15		25,000		25,406
				97,006
Health Care Technology–0.48%
MedAssets Inc., Sr. Unsec. Gtd. Global Notes, 8.00%, 11/15/18		125,000		123,125
Homebuilding–1.56%
Beazer Homes USA Inc., Sr. Unsec. Gtd. Global Notes,
6.88%, 07/15/15		80,000		60,200
8.13%, 06/15/16		100,000		74,500
K. Hovnanian Enterprises Inc., Sr. Sec. Gtd. Global Notes, 10.63%, 10/15/16		190,000		152,000
Lennar Corp., Sr. Unsec. Gtd. Global Notes, 6.95%, 06/01/18		85,000		82,875
M/I Homes Inc., Sr. Unsec. Gtd. Global Notes, 8.63%, 11/15/18		35,000		31,062
				400,637
Hotels, Resorts & Cruise Lines–0.06%
Royal Caribbean Cruises Ltd., Sr. Unsec. Global Notes, 7.25%, 03/15/18		15,000		15,788
Household Products–0.31%
Central Garden & Pet Co., Sr. Gtd. Sub. Notes, 8.25%, 03/01/18		80,000		79,000
Housewares & Specialties–0.20%
American Greetings Corp., Sr. Unsec. Gtd. Notes, 7.38%, 12/01/21		50,000		50,688
Independent Power Producers & Energy Traders–1.10%
AES Corp. (The), Sr. Unsec. Global Notes, 7.75%, 10/15/15		220,000		239,250
Calpine Corp., Sr. Sec. Notes, 7.25%, 10/15/17(b)		40,000		41,800
				281,050
Industrial Machinery–0.71%
Cleaver-Brooks Inc., Sr. Sec. Notes, 12.25%, 05/01/16(b)		110,000		111,100
Columbus McKinnon Corp., Sr. Unsec. Gtd. Sub. Global Notes, 7.88%, 02/01/19		10,000		10,437
SPX Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 09/01/17		55,000		59,675
				181,212
Industrial REIT’s–0.15%
DuPont Fabros Technology L.P., Sr. Unsec. Gtd. Global Notes, 8.50%, 12/15/17		35,000		37,713
Integrated Telecommunication Services–0.34%
Integra Telecom Holdings Inc., Sr. Sec. Notes, 10.75%, 04/15/16(b)		70,000		56,700
Intelsat Jackson Holdings S.A. (Luxembourg), Sr. Unsec. Gtd. Notes, 7.50%, 04/01/21(b)		10,000		10,250
Windstream Corp., Sr. Unsec. Gtd. Notes, 7.50%, 06/01/22(b)		20,000		20,100
				87,050
Internet Retail–0.19%
Travelport LLC/Inc., Sr. Unsec. Gtd. Global Notes, 9.00%, 03/01/16		85,000		48,238

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
Internet Software & Services–0.64%
Equinix Inc., Sr. Unsec. Notes,
7.00%, 07/15/21	$	60,000	$	63,900
8.13%, 03/01/18		90,000		99,450
				163,350
Investment Banking & Brokerage–0.52%
Cantor Fitzgerald L.P., Bonds, 7.88%, 10/15/19(b)		105,000		105,367
E*Trade Financial Corp., Sr. Unsec. Notes, 6.75%, 06/01/16		30,000		29,250
				134,617
Leisure Facilities–0.10%
Speedway Motorsports Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 02/01/19		25,000		25,375
Leisure Products–0.44%
Toys R US-Delaware Inc., Sr. Sec. Gtd. Notes, 7.38%, 09/01/16(b)		110,000		111,650
Life Sciences Tools & Services–0.21%
Patheon Inc. (Canada), Sr. Sec. Gtd. Notes, 8.63%, 04/15/17(b)		65,000		52,650
Marine–0.17%
Navios Maritime Acquisition Corp./Navios Acquisition Finance U.S. Inc. (Greece), Sr. Sec. Gtd. Global Notes, 8.63%, 11/01/17		10,000		7,150
Stena A.B. (Sweden), Sr. Unsec. Global Notes, 7.00%, 12/01/16		40,000		36,950
				44,100
Movies & Entertainment–1.34%
AMC Entertainment Inc., Sr. Gtd. Sub. Global Notes, 9.75%, 12/01/20		50,000		47,750
Sr. Unsec. Gtd. Global Notes, 8.75%, 06/01/19		115,000		119,456
NAI Entertainment Holdings LLC, Sr. Sec. Notes, 8.25%, 12/15/17(b)		165,000		175,519
				342,725
Multi-Line Insurance–2.84%
American International Group Inc., Jr. Unsec. Sub. Global Deb., 8.18%, 05/15/58		215,000		195,112
Fairfax Financial Holdings Ltd. (Canada), Sr. Unsec. Notes, 5.80%, 05/15/21(b)		45,000		42,638
Hartford Financial Services Group Inc., Jr. Unsec. Sub. Deb., 8.13%, 06/15/38		85,000		84,575
Liberty Mutual Group Inc., Jr. Unsec. Gtd. Sub. Bonds, 7.80%, 03/15/37(b)		230,000		206,425
Nationwide Mutual Insurance Co., Unsec. Sub. Notes, 9.38%, 08/05/39(b)		165,000		198,991
				727,741
Office Services & Supplies–0.22%
IKON Office Solutions, Inc., Sr. Unsec. Notes, 6.75%, 12/01/25		35,000		34,213
Interface Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 12/01/18		20,000		21,250
				55,463
Oil & Gas Equipment & Services–1.11%
Bristow Group, Inc., Sr. Unsec. Gtd. Global Notes, 7.50%, 09/15/17		110,000		113,850
Key Energy Services, Inc., Sr. Unsec. Gtd. Notes, 6.75%, 03/01/21		125,000		125,625
SESI LLC, Sr. Unsec. Gtd. Global Notes, 6.38%, 05/01/19		45,000		46,125
				285,600
Oil & Gas Exploration & Production–5.17%
Berry Petroleum Co., Sr. Unsec. Notes, 6.75%, 11/01/20		35,000		35,569
Chaparral Energy Inc., Sr. Unsec. Gtd. Global Notes,
8.25%, 09/01/21		110,000		111,925
8.88%, 02/01/17		90,000		93,262
Chesapeake Energy Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 11/15/20		30,000		31,950
Sr. Unsec. Gtd. Notes,
6.13%, 02/15/21		10,000		10,288
6.63%, 08/15/20		73,000		78,201
Cimarex Energy Co., Sr. Unsec. Gtd. Notes, 7.13%, 05/01/17		50,000		52,438
Continental Resources Inc., Sr. Unsec. Gtd. Global Notes,
7.13%, 04/01/21		30,000		32,625
7.38%, 10/01/20		55,000		60,156
8.25%, 10/01/19		50,000		55,188
EXCO Resources Inc., Sr. Unsec. Gtd. Notes, 7.50%, 09/15/18		130,000		123,500
Forest Oil Corp., Sr. Unsec. Gtd. Global Notes, 7.25%, 06/15/19		45,000		45,450
McMoRan Exploration Co., Sr. Unsec. Gtd. Notes, 11.88%, 11/15/14		155,000		165,462
Newfield Exploration Co., Sr. Unsec. Sub. Global Notes, 7.13%, 05/15/18		70,000		74,022
Plains Exploration & Production Co., Sr. Unsec. Gtd. Notes, 7.63%, 06/01/18		120,000		127,800
Range Resources Corp., Sr. Unsec. Gtd. Sub. Notes, 5.75%, 06/01/21		105,000		113,137
SM Energy Co., Sr. Unsec. Notes,
6.50%, 11/15/21(b)		15,000		15,525
6.63%, 02/15/19(b)		50,000		51,750

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
Oil & Gas Exploration & Production–(continued)
Whiting Petroleum Corp., Sr. Unsec. Gtd. Sub. Notes, 6.50%, 10/01/18	$	45,000	$	47,081
				1,325,329
Oil & Gas Refining & Marketing–0.71%
United Refining Co., Sr. Sec. Gtd. Global Notes, 10.50%, 02/28/18		195,000		183,300
Oil & Gas Storage & Transportation–3.19%
Atlas Pipeline Partners L.P./Atlas Pipeline Finance Corp., Sr. Unsec. Gtd. Notes, 8.75%, 06/15/18(b)		60,000		63,450
Chesapeake Midstream Partners L.P./CHKM Finance Corp., Sr. Unsec. Gtd. Notes, 5.88%, 04/15/21(b)		75,000		75,750
Copano Energy LLC/Copano Energy Finance Corp., Sr. Unsec. Gtd. Notes, 7.13%, 04/01/21		115,000		116,725
Energy Transfer Equity L.P., Sr. Sec. Gtd. Notes, 7.50%, 10/15/20		95,000		103,194
Inergy L.P./Inergy Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 08/01/21		66,000		66,825
MarkWest Energy Partners L.P./MarkWest Energy Finance Corp., Sr. Unsec. Gtd. Notes,
6.25%, 06/15/22		45,000		47,250
6.50%, 08/15/21		40,000		41,900
Overseas Shipholding Group, Inc., Sr. Unsec. Notes, 8.13%, 03/30/18		100,000		61,250
Regency Energy Partners L.P./Regency Energy Finance Corp., Sr. Unsec. Gtd. Notes, 6.88%, 12/01/18		75,000		79,781
Targa Resources Partners L.P./Targa Resouces Partners Finance Corp., Sr. Unsec. Gtd. Notes, 6.88%, 02/01/21(b)		105,000		106,837
WPX Energy Inc., Sr. Unsec. Notes, 6.00%, 01/15/22(b)		55,000		56,513
				819,475
Other Diversified Financial Services–1.52%
Aircastle Ltd., Sr. Notes, 9.75%, 08/01/18(b)		20,000		21,100
International Lease Finance Corp.,
Sr. Sec. Notes,
6.75%, 09/01/16(b)		45,000		46,209
7.13%, 09/01/18(b)		65,000		67,255
Sr. Unsec. Global Notes,
5.75%, 05/15/16		20,000		18,638
6.25%, 05/15/19		30,000		27,750
8.63%, 09/15/15		145,000		148,480
8.75%, 03/15/17		44,000		45,512
Sr. Unsec. Notes, 8.25%, 12/15/20		15,000		15,197
				390,141
Packaged Foods & Meats–0.24%
Del Monte Corp., Sr. Unsec. Gtd. Global Notes, 7.63%, 02/15/19		65,000		62,888
Paper Packaging–0.55%
Cascades Inc. (Canada), Sr. Unsec. Gtd. Global Notes, 7.88%, 01/15/20		145,000		141,738
Paper Products–1.89%
Boise Cascade LLC, Sr. Unsec. Gtd. Sub. Global Notes, 7.13%, 10/15/14		165,000		164,175
Clearwater Paper Corp., Sr. Unsec. Gtd. Global Notes, 7.13%, 11/01/18		75,000		78,187
Mercer International Inc., Sr. Unsec. Gtd. Global Notes, 9.50%, 12/01/17		75,000		77,063
NewPage Corp., Sr. Sec. Gtd. Global Notes, 11.38%, 12/31/14		70,000		51,975
P.H. Glatfelter Co., Sr. Unsec. Gtd. Global Notes, 7.13%, 05/01/16		110,000		113,987
				485,387
Pharmaceuticals–1.80%
Aptalis Pharma Inc., Sr. Unsec. Gtd. Global Notes, 12.75%, 03/01/16		60,000		63,600
Elan Finance PLC/Corp. (Ireland), Sr. Unsec. Gtd. Global Notes, 8.75%, 10/15/16		100,000		107,250
Endo Pharmaceuticals Holdings Inc., Sr. Unsec. Gtd. Global Notes, 7.00%, 12/15/20		15,000		16,013
Mylan Inc., Sr. Unsec. Gtd. Notes, 6.00%, 11/15/18(b)		50,000		51,625
NBTY Inc., Sr. Unsec. Gtd. Global Notes, 9.00%, 10/01/18		100,000		110,000
Valeant Pharmaceuticals International, Sr. Unsec. Gtd. Notes,
6.75%, 10/01/17(b)		30,000		30,000
6.75%, 08/15/21(b)		85,000		82,981
				461,469
Property & Casualty Insurance–0.26%
XL Group PLC (Ireland), Series E, Jr. Sub. Global Pfd. Bonds, 6.50%(f)		85,000		66,938
Real Estate Services–0.32%
CB Richard Ellis Services Inc., Sr. Unsec. Gtd. Global Notes, 6.63%, 10/15/20		80,000		82,600
Regional Banks–1.51%
AmSouth Bancorp., Unsec. Sub. Deb., 6.75%, 11/01/25		25,000		20,500
BB&T Capital Trust II, Jr. Unsec. Ltd. Gtd. Sub. Global Notes, 6.75%, 06/07/36		60,000		59,944
PNC Financial Services Group, Inc., Series O, Jr. Unsec. Sub. Pfd. Notes, 6.75%(f)		40,000		39,400
Regions Financial Corp., Sr. Unsec. Notes, 5.75%, 06/15/15		60,000		58,050
Unsec. Sub. Notes, 7.38%, 12/10/37		150,000		124,125

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
Regional Banks–(continued)
Synovus Financial Corp., Unsec. Sub. Global Notes, 5.13%, 06/15/17	$	100,000	$	85,250
				387,269
Research & Consulting Services–0.37%
FTI Consulting Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 10/01/20		90,000		94,275
Semiconductor Equipment–1.12%
Amkor Technology Inc., Sr. Unsec. Global Notes,
6.63%, 06/01/21		15,000		14,437
7.38%, 05/01/18		160,000		164,000
Sensata Technologies B.V. (Netherlands), Sr. Unsec. Gtd. Notes, 6.50%, 05/15/19(b)		110,000		109,725
				288,162
Semiconductors–0.81%
Freescale Semiconductor Inc., Sr. Sec. Gtd. Notes, 9.25%, 04/15/18(b)		109,000		116,902
Sr. Unsec. Gtd. Global Notes,
8.05%, 02/01/20		25,000		23,500
10.75%, 08/01/20		65,000		67,925
				208,327
Specialized Finance–0.96%
CIT Group Inc., Sec. Gtd. Bonds, 7.00%, 05/02/17(b)		245,000		245,612
Specialized REIT’s–0.69%
Host Hotels & Resorts L.P., Sr. Gtd. Global Notes, 6.00%, 11/01/20		75,000		76,875
MPT Operating Partnership L.P./MPT Finance Corp., Sr. Unsec. Gtd. Global Notes, 6.88%, 05/01/21		45,000		44,831
Omega Healthcare Investors, Inc., Sr. Unsec. Gtd. Global Notes, 6.75%, 10/15/22		55,000		55,207
				176,913
Specialty Chemicals–1.65%
Ferro Corp., Sr. Unsec. Notes, 7.88%, 08/15/18		105,000		106,575
Huntsman International LLC, Sr. Unsec. Gtd. Global Notes, 5.50%, 06/30/16		30,000		29,625
Sr. Unsec. Gtd. Sub. Global Notes, 8.63%, 03/15/21		90,000		95,850
NewMarket Corp., Sr. Unsec. Gtd. Global Notes, 7.13%, 12/15/16		45,000		46,097
PolyOne Corp., Sr. Unsec. Notes, 7.38%, 09/15/20		140,000		144,900
				423,047
Specialty Stores–0.66%
Michaels Stores Inc., Sr. Unsec. Gtd. Global Notes, 7.75%, 11/01/18		25,000		25,500
Sr. Unsec. Gtd. Sub. Disc. Global Notes, 13.00%, 11/01/16		135,000		143,944
				169,444
Steel–0.14%
United States Steel Corp., Sr. Unsec. Notes, 7.00%, 02/01/18		35,000		34,825
Systems Software–0.77%
Allen Systems Group Inc., Sec. Gtd. Notes, 10.50%, 11/15/16(b)		225,000		196,875
Tires & Rubber–0.48%
Cooper Tire & Rubber Co., Sr. Unsec. Notes, 8.00%, 12/15/19		110,000		114,950
Goodyear Tire & Rubber Co. (The), Sr. Unsec. Gtd Notes, 8.25%, 08/15/20		7,000		7,665
				122,615
Trading Companies & Distributors–2.59%
Avis Budget Car Rental LLC/Avis Budget Finance Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 01/15/19		160,000		159,600
H&E Equipment Services Inc., Sr. Unsec. Gtd. Global Notes, 8.38%, 07/15/16		185,000		189,394
Hertz Corp. (The), Sr. Unsec. Gtd. Global Notes,
6.75%, 04/15/19		45,000		45,788
7.38%, 01/15/21		125,000		128,437
7.50%, 10/15/18		55,000		57,612
Interline Brands, Inc., Sr. Unsec. Gtd. Global Notes, 7.00%, 11/15/18		40,000		41,500
RSC Equipment Rental Inc./RSC Holdings III LLC, Sr. Unsec. Gtd. Global Notes, 8.25%, 02/01/21		40,000		41,000
				663,331
Trucking–0.10%
Avis Budget Car Rental LLC/Avis Budget Finance Inc., Sr. Unsec. Gtd. Global Notes, 9.75%, 03/15/20		25,000		25,875
Wireless Telecommunication Services–5.40%
Clearwire Communications LLC/Clearwire Finance, Inc., Sr. Sec. Gtd. Notes, 12.00%, 12/01/15(b)		165,000		159,637
Sr. Unsec. Gtd. Conv. Notes, 8.25%, 12/01/17(b)(h)		35,000		22,575
Cricket Communications, Inc., Sr. Sec. Gtd. Global Notes, 7.75%, 05/15/16		115,000		119,744
Sr. Unsec. Gtd. Global Notes, 7.75%, 10/15/20		165,000		145,200
Digicel Group Ltd. (Bermuda), Sr. Unsec. Notes, 8.88%, 01/15/15(b)		150,000		147,562

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
Wireless Telecommunication Services–(continued)
MetroPCS Wireless Inc., Sr. Unsec. Gtd. Notes,
6.63%, 11/15/20	$	95,000	$	89,775
7.88%, 09/01/18		65,000		66,016
SBA Telecommunications Inc., Sr. Unsec. Gtd. Global Notes, 8.25%, 08/15/19		50,000		54,688
Sprint Capital Corp., Sr. Unsec. Gtd. Global Notes, 6.90%, 05/01/19		165,000		135,712
Sprint Nextel Corp., Sr. Unsec. Gtd. Notes, 9.00%, 11/15/18(b)		65,000		68,494
Sr. Unsec. Notes, 11.50%, 11/15/21(b)		25,000		24,844
VimpelCom (Ireland), Unsec. Loan Participation Notes, 7.75%, 02/02/21(b)		200,000		171,500
Wind Acquisition Finance S.A. (Luxembourg), Sr. Sec. Gtd. Notes, 11.75%, 07/15/17(b)		200,000		179,000
				1,384,747
Total U.S. Dollar Denominated Bonds and Notes (Cost $29,993,804)				22,359,970
Non-U.S. Dollar Denominated Bonds & Notes–6.94%(i)
Canada–0.33%
Gateway Casinos & Entertainment Ltd., Sec. Gtd. Notes, 8.88%, 11/15/17(b)	CAD	85,000		85,100
Czech Republic–0.24%
CET 21 Spol S.R.O., Sr. Sec. Notes, 9.00%, 11/01/17(b)	EUR	50,000		61,803
Ireland–1.36%
Ardagh Packaging Finance PLC, Sr. Unsec. Gtd. Notes, 9.25%, 10/15/20(b)	EUR	100,000		117,457
Bord Gais Eireann, Sr. Unsec. Medium-Term Euro Notes, 5.75%, 06/16/14	EUR	95,000		116,933
Nara Cable Funding Ltd., Sr. Sec. Notes, 8.88%, 12/01/18(b)	EUR	100,000		114,222
				348,612
Italy–0.20%
Lottomatica SpA–REGS, Jr. Unsec. Sub. Euro Bonds, 8.25%, 03/31/66(b)	EUR	50,000		50,801
Luxembourg–2.22%
Cirsa Funding Luxembourg S.A., Sr. Unsec. Gtd. Notes, 8.75%, 05/15/18(b)	EUR	50,000		53,309
REGS, Sr. Gtd. Euro Notes, 8.75%, 05/15/18(b)	EUR	50,000		53,309
Codere Finance Luxembourg S.A., Sr. Sec. Gtd. Notes, 8.25%, 06/15/15(b)	EUR	100,000		119,723
ConvaTec Healthcare S.A., Sr. Sec. Gtd. Notes, 7.38%, 12/15/17(b)	EUR	100,000		122,959
Mark IV Europe Lux SCA/Mark IV USA SCA, Sr. Sec. Gtd. Notes, 8.88%, 12/15/17(b)	EUR	100,000		131,371
TMD Friction Finance S.A., Sr. Sec. Gtd. Bonds, 10.75%, 05/15/17(b)	EUR	65,000		87,915
				568,586
Netherlands–0.56%
Ziggo Bond Co. B.V., Sr. Sec. Gtd. Notes, 8.00%, 05/15/18(b)	EUR	110,000		144,509
Sweden–0.26%
TVN Finance Corp II A.B., Sr. Unsec. Gtd. Notes, 10.75%, 11/15/17(b)	EUR	50,000		67,627
United Kingdom–1.41%
EC Finance PLC–REGS, Sr. Sec. Gtd. Euro Notes, 9.75%, 08/01/17(b)	EUR	50,000		50,154
Kerling PLC, Sr. Sec. Gtd. Notes, 10.63%, 02/01/17(b)	EUR	50,000		57,596
Pipe Holdings PLC, Sr. Sec. Gtd. Bonds, 9.50%, 11/01/15(b)	GBP	100,000		138,641
R&R Ice Cream PLC, Sr. Sec. Gtd. Notes, 8.38%, 11/15/17(b)	EUR	100,000		114,546
				360,937
United States–0.36%
CEDC Finance Corp. International Inc., Sr. Sec. Gtd. Notes, 8.88%, 12/01/16(b)	EUR	100,000		93,190
Total Non-U.S. Dollar Denominated Bonds & Notes (Cost $2,008,866)				1,781,165
	Shares
Preferred Stocks–2.85%
Automobile Manufacturers–0.29%
General Motors Co., Series B, $2.38 Conv. Pfd.(d)		2,130		72,953
Consumer Finance–1.16%
Ally Financial, Inc., Series A,, 8.50% Pfd.,		2,690		49,469
Series G, 7.00% Pfd.(b)		264		189,263
GMAC Capital Trust I, Series 2, 8.13% Jr. Gtd. Sub. Pfd.		3,025		58,504
				297,236
Industrial REIT’s–0.10%
DuPont Fabros Technology, Inc., Series B, 7.63% Pfd.		1,045		26,062
Regional Banks–1.14%
Zions Bancorp., Series C, 9.50% Pfd.		11,600		292,900

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

Invesco V.I. High Yield Securities Fund

	Shares		Value
Tires & Rubber–0.16%
Goodyear Tire & Rubber Co. (The), $2.94 Conv. Pfd.		855	$	41,596
Total Preferred Stocks (Cost $782,024)				730,747
Common Stocks & Other Equity Interests–0.18%
Automobile Manufacturers–0.18%
General Motors Co.(d)(j)		1,239		25,115
General Motors Co., Wts. expiring 07/10/16(d)(k)		1,125		13,196
General Motors Co., Wts. expiring 07/10/19(d)(k)		1,125		8,797
Total Common Stocks & Other Equity Interests (Cost $95,241)				47,108
Money Market Funds–0.27%
Liquid Assets Portfolio–Institutional Class(l)		34,509		34,509
Premier Portfolio–Institutional Class(l)		34,509		34,509
Total Money Market Funds (Cost $69,018)				69,018
TOTAL INVESTMENTS–97.40% (Cost $32,948,953)				24,988,008
OTHER ASSETS LESS LIABILITIES–2.60%				667,491
NET ASSETS–100.00%			$	25,655,499

Investment Abbreviations:

CAD	– Canadian Dollar
Conv.	– Convertible
Ctfs.	– Certificates
Deb.	– Debentures
EUR	– Euro
GBP	– British Pound
Gtd.	– Guaranteed
Jr.	– Junior
Pfd.	– Preferred
PIK	– Payment in Kind
REGS	– Regulation S
REIT	– Real Estate Investment Trust
Sec.	– Secured
Sr.	– Senior
Sub.	– Subordinated
Unsec.	– Unsecured
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, 2011 was $8,756,432, which represented 34,13% 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, 2011 was $114,132, which represented 0.44% of the Fund’s Net Assets
(d)	Acquired as part of the General Motors reorganization.
(e)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2011.
(f)	Perpetual bond with no specified maturity date.
(g)	Interest payments have been suspended under the European Union agreement for 24 months beginning April 30, 2010.
(h)	Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put.
(i)	Foreign denominated security. Principal amount is denominated in currency indicated.
(j)	Non-income producing security.
(k)	Non-income producing security acquired through a corporate action.
(l)	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, 2011

Assets:
Investments, at value (Cost $32,879,935)	$	24,918,990
Investments in affiliated money market funds, at value and cost		69,018
Total investments, at value (Cost $32,948,953)		24,988,008
Foreign currencies, at value (Cost $147,463)		147,463
Receivable for:
Investments sold		49,303
Fund shares sold		43,186
Dividends and interest		471,892
Foreign currency contracts		118,995
Investment for trustee deferred compensation and retirement plans		4,960
Other assets		4,367
Total assets		25,828,174
Liabilities:
Payable for:
Investments purchased		10,184
Fund shares reacquired		80
Accrued fees to affiliates		55,479
Accrued other operating expenses		100,070
Trustee deferred compensation and retirement plans		6,862
Total liabilities		172,675
Net assets applicable to shares outstanding	$	25,655,499
Net assets consist of:
Shares of beneficial interest	$	134,321,802
Undistributed net investment income		1,509,910
Undistributed net realized gain (loss)		(102,315,886	)
Unrealized appreciation (depreciation)		(7,860,327	)
	$	25,655,499
Net Assets:
Series I	$	13,403,102
Series II	$	12,252,397
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		12,599,391
Series II		11,516,979
Series I:
Net asset value per share	$	1.06
Series II:
Net asset value per share	$	1.06

Statement of Operations

For the year ended December 31, 2011

Investment income:
Interest	$	2,230,543
Dividends		55,690
Dividends from affiliated money market funds		131
Total investment income		2,286,364
Expenses:
Advisory fees		121,485
Administrative services fees		77,372
Custodian fees		15,643
Distribution fees — Series II		35,130
Transfer agent fees		2,744
Trustees’ and officers’ fees and benefits		18,136
Professional services fees		228,779
Other		18,212
Total expenses		517,501
Less: Fees waived		(269	)
Net expenses		517,232
Net investment income		1,769,132
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		1,133,562
Foreign currencies		(5,103	)
Foreign currency contracts		(36,120	)
		1,092,339
Change in net unrealized appreciation (depreciation) of:
Investment securities		(2,453,106	)
Foreign currencies		(1,169	)
Foreign currency contracts		101,990
		(2,352,285	)
Net realized and unrealized gain (loss)		(1,259,946	)
Net increase in net assets resulting from operations	$	509,186

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, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	1,769,132		$	2,370,243
Net realized gain (loss)		1,092,339			(43,900,656	)
Change in net unrealized appreciation (depreciation)		(2,352,285	)		44,931,025
Net increase in net assets resulting from operations		509,186			3,400,612
Distributions to shareholders from net investment income:
Series I		(1,187,359	)		(1,323,198	)
Series II		(1,065,238	)		(1,325,494	)
Total distributions from net investment income		(2,252,597	)		(2,648,692	)
Share transactions–net:
Series I		(1,728,255	)		(1,163,101	)
Series II		(3,049,386	)		(958,872	)
Net increase (decrease) in net assets resulting from share transactions		(4,777,641	)		(2,121,973	)
Net increase (decrease) in net assets		(6,521,052	)		(1,370,053	)
Net assets:
Beginning of year		32,176,551			33,546,604
End of year (includes undistributed net investment income of $1,509,910 and $1,946,344, respectively)	$	25,655,499		$	32,176,551

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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 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. 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 V.I. High Yield Securities 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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 V.I. High Yield Securities 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.	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 million		0	.295%
Next $1 billion		0	.27%
Next $1 billion		0	.245%
Over $3 billion		0	.22%

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

  The Adviser has contractually agreed, through at least June 30, 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, including litigation expenses; and

Invesco V.I. High Yield Securities Fund

(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 reimburse expenses during the period under this expense limitation.

  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.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $269.

  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, 2011, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $27,372 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, IIS and/or IDI.

NOTE 3—Additional Valuation Information

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

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

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	657,609	$	189,264	$	—	$	846,873
Corporate Debt Securities		—		22,357,438		2,532		22,359,970
Foreign Debt Securities		—		1,781,165		—		1,781,165
	$	657,609	$	24,327,867	$	2,532	$	24,988,008
Foreign Currency Contracts*		—		101,990		—		101,990
Total Investments	$	657,609	$	24,429,857	$	2,532	$	25,089,998

*  Unrealized appreciation.

Invesco V.I. High Yield Securities Fund

NOTE 4—Derivative Investments

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, 2011:

	Value
Risk Exposure/Derivative Type	Assets		Liabilities
Currency risk(a)
Foreign Currency Contracts	$	101,990	$	—

^(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, 2011

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 (Loss)
Currency risk	$	(36,120	)
Change in Unrealized Appreciation
Currency risk		101,990
Total	$	65,870

*  The average notional value of foreign currency contracts outstanding during the period was $2,500,017.

Open Foreign Currency Contracts
Settlement		Contract to				Notional		Unrealized
Date	Counterparty	Deliver		Receive		Value		Appreciation
02/09/12	RBC Capital Markets Corp.	EUR	1,176,000	USD	1,619,024	$	1,522,639	$	96,385
02/17/12	Morgan Stanley	GBP	182,000	USD	288,193		282,588		5,605
Total open foreign currency contracts								$	101,990
Closed Foreign Currency Contracts
Closed		Contract to				Notional		Realized
Date	Counterparty	Deliver		Receive		Value		Gain
11/21/11	RBC Capital Markets Corp.	EUR	56,000	USD	77,096	$	75,836	$	1,260
11/25/11	RBC Capital Markets Corp.	EUR	184,000	USD	253,317		244,681		8,636
11/29/11	RBC Capital Markets Corp.	EUR	82,000	USD	112,891		109,326		3,565
12/15/11	RBC Capital Markets Corp.	EUR	37,000	USD	50,939		48,110		2,829
12/22/11	Morgan Stanley	GBP	1,000	USD	1,583		1,567		16
12/22/11	RBC Capital Markets Corp.	EUR	10,000	USD	13,767		13,068		699
Total closed foreign currency contracts								$	17,005
Total foreign currency contracts								$	118,995

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

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, 2011, the Fund paid legal fees of $1,158 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner of that firm is a Trustee of the Trust.

Invesco V.I. High Yield Securities Fund

NOTE 6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. 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, 2011 and 2010:

	2011		2010
Ordinary income	$	2,252,597	$	2,648,692

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	1,838,811
Net unrealized appreciation (depreciation) — investments		(8,286,459	)
Net unrealized appreciation (depreciation) — other investments		(1,372	)
Temporary book/tax differences		(6,862	)
Capital loss carryforward		(102,210,421	)
Shares of beneficial interest		134,321,802
Total net assets	$	25,655,499

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund utilized $1,148,876 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, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term		Long-Term		Total
December 31, 2012	$	24,097,705	$	—	$	24,097,705
December 31, 2013		15,736,680		—		15,736,680
December 31, 2014		6,219,062		—		6,219,062
December 31, 2016		1,794,343		—		1,794,343
December 31, 2017		10,401,018		—		10,401,018
December 31, 2018		43,961,613		—		43,961,613
	$	102,210,421	$	—	$	102,210,421

*  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 Securities 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, 2011 was $18,124,189 and $22,992,846, 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	$	634,602
Aggregate unrealized (depreciation) of investment securities		(8,921,061	)
Net unrealized appreciation (depreciation) of investment securities	$	(8,286,459	)
Cost of investments for tax purposes is $33,274,467.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions and expired capital loss carryforward, on December 31, 2011, undistributed net investment income was increased by $47,031, undistributed net realized gain (loss) was increased by $80,261,734 and shares of beneficial interest decreased by $80,308,765. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		692,930		$	784,581			685,783		$	764,001
Series II		139,366			158,013			598,859			659,318
Issued as reinvestment of dividends:
Series I		1,164,078			1,187,359			1,272,306			1,323,198
Series II		1,044,351			1,065,238			1,274,514			1,325,494
Reacquired:
Series I		(3,232,497	)		(3,700,195	)		(2,886,241	)		(3,250,300	)
Series II		(3,722,675	)		(4,272,637	)		(2,643,132	)		(2,943,684	)
Net increase (decrease) in share activity		(3,914,447	)	$	(4,777,641	)		(1,697,911	)	$	(2,121,973	)

^(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 Fund 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 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) on																to average			to average net			Ratio of net
	Net asset				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 12/31/11	$	1.15	$	0.07	$	(0.06	)	$	0.01		$	(0.10	)	$	1.06		1.10	%	$	13,403		1.67	%(d)		1.67	%(d)		6.24	%(d)		63	%
Year ended 12/31/10		1.13		0.08		0.04			0.12			(0.10	)		1.15		10.19			16,049		1.97			1.98			7.37			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
Series II
Year ended 12/31/11		1.15		0.07		(0.06	)		0.01			(0.10	)		1.06		0.77			12,252		1.92	(d)		1.92	(d)		5.99	(d)		63
Year ended 12/31/10		1.13		0.08		0.03			0.11			(0.09	)		1.15		10.36			16,128		2.22			2.23			7.12			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

(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 $14,873 and $14,052 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.

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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. 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 17, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	977.00	$	7.08	$	1,018.05	$	7.22		1.42	%
Series II		1,000.00		973.80		8.31		1,016.79		8.49		1.67

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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, 2011:

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. High Yield Securities Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. High Yield Securities Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. High Yield Securities Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. High Yield Securities Fund

Invesco V.I. International Growth Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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

Global equity markets faced headwinds in 2011. China’s growth continued to slow as the U.S. battled high unemployment and runaway deficits. Several European countries faced similar deficits, which brought to light the imperfect structure of the euro. The reporting period ended with a market upswing, however, as European leaders took steps to address the Greek sovereign debt issue and stabilize their banking system.

     Invesco V.I. International Growth Fund was not immune to this volatility, closing the year ended December 31, 2011, in negative territory. The Fund’s relative results were favorable, however, with the Fund outperforming the Fund’s style-specific benchmark, the MSCI EAFE Growth Index.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	-6.74	%
Series II Shares	-6.99
MSCI EAFE Index ▼ (Broad Market Index)	-12.14
MSCI EAFE Growth Index▼ (Style-Specific Index)	-12.11
Lipper VUF International Growth Funds Index▼ (Peer Group Index)	-13.10

Source(s): ^▼Lipper Inc.

How we invest

When selecting stocks for your Fund, we use a disciplined investment strategy that emphasizes fundamental research, supported by both quantitative analysis and portfolio construction techniques. Our earnings, quality, valuation (EQV) 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

Market volatility was intense during the reporting period. During mid-2011, Greek sovereign debt concerns and signs of slowing global growth continued to worry investors. In addition, numerous world events caught investors’ attention, including the growing unrest in the Middle East and northern Africa, and the devastating earthquake and tsunami in Japan in March. Renewed credit problems overseas and the market correction that occurred mid-year created a more uncertain environment, which prompted

many investors to favor safety over risk.

     In this environment, we continued to manage the Fund’s portfolio with a long-term view and a bottom-up approach (i.e., selecting stocks on an individual basis). From a sector perspective, the Fund fared better than its style-specific benchmark in six of 10 sectors, significantly outperforming in the consumer discretionary, materials and financials sectors. In each instance, strong stock selection played a key role in driving results. A modest cash exposure during the volatile reporting period was supportive on a relative basis as well.

     In the consumer discretionary sector, favorable stock selection in the retail industry and the hotels, restaurants and leisure industry contributed positively to both relative and absolute results. Top stock level contributors included U.K. retailer Next. Zero exposure to several weak index names, including Sony and Panasonic (not Fund holdings) in the household durables industry, was supportive on a relative basis as well.

     In financials, the reporting period’s weakest sector, stock selection combined with underweight exposure, drove the Fund’s relative results. As noted previously, the European sovereign debt situation was the focal point of investor concern through most of the reporting period, and we believe it will remain a key issue for markets entering 2012. Notably, the Fund ended the reporting period with limited direct exposure to companies based in Portugal, Ireland, Italy, Greece or Spain. (The Fund did hold two U.K. companies incorporated in Ireland for tax purposes.)
     In the materials sector, the Fund’s continued underweight exposure to a sector that was down almost 20%¹ for the reporting period, was a key driver of relative outperformance versus the index. At the end of the reporting period,

Portfolio Composition

By sector

Consumer Discretionary	18.0	%
Consumer Staples	14.1
Health Care	11.3
Energy	10.1
Information Technology	10.1
Industrials	9.6
Financials	9.5
Telecommunication Services	4.0
Materials	3.6
Utilities	1.6
Money Market Funds
Plus Other Assets Less Liabilities	8.1

Top 10 Equity Holdings*

1.	Compass Group PLC	2.3	%
2.	Imperial Tobacco Group PLC	2.1
3.	Anheuser-Busch InBev N.V.	1.9
4.	Canon, Inc.	1.8
5.	Teva Pharmaceutical Industries Ltd.	1.7
6.	Yamada Denki Co., Ltd.	1.7
7.	Banco Bradesco S.A.	1.7
8.	Novartis AG	1.7
9.	BG Group PLC	1.6
10.	British American Tobacco PLC	1.6

Top Five Industries

1.	Pharmaceuticals	8.4	%
2.	Integrated Oil & Gas	7.9
3.	Diversified Banks	6.2
4.	Packaged Foods & Meats	4.2
5.	Tobacco	3.7

Total Net Assets	$1.2 billion
Total Number of Holdings*		85

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

the Fund held approximately 4% of its total net assets in this sector while the MSCI EAFE Growth Index held close to 14%.²
     In contrast, underweight exposure to consumer staples, the reporting period’s strongest performing sector, also detracted from relative Fund results. However, solid stock selection enabled the Fund to deliver double-digit gains, outperforming the style-specific index within this sector despite our underweight position.

     Fund holdings in the telecommunication services sector (predominantly in the wireless industry) detracted from the Fund’s relative and absolute results. Mexican telecommunications company America Movil was one such detractor. Concerns about increased competition and rising regulatory risk in Mexico weighed on the stock price. We reduced the Fund’s position in America Movil over the reporting period. Fund exposure in the information technology (IT) sector detracted on a relative basis as well, but the impact was modest.

     In broad geographic terms, the Fund outperformed the MSCI EAFE Growth Index in both Europe and Asia. Outperformance in Europe was led by strong results in the U.K., which at about 20%, was the Fund’s largest single country exposure. All five top stock level contributors were U.K.-based holdings, including Imperial Tobacco Group and Shire.

     In Asia, the Fund’s exposure to Japan was the key driver of relative results. In Japan, the effects of the March earthquake and tsunami have largely passed, and production levels returned to normal. However, Japan faced the effects of a new natural disaster with flooding in Thailand; Japanese manufacturers use Thailand as a production hub. The yen’s continued strength and weak export numbers to the U.S. and Europe produced a steady stream of earnings growth downgrades as well. As a result, the Fund’s underweight position in Japan contributed positively to relative performance.

     In contrast, the Fund’s exposure to emerging markets detracted from both absolute and relative results as the MSCI EAFE Growth Index did not have exposure to this segment of the market. During the reporting period, emerging markets underperformed developed markets due to multiple macroeconomic headwinds, including the European debt crisis, a deteriorating global economy, rising inflation and tightening monetary policies.

     As long-term, bottom-up stock selectors, we see volatility as an opportunity to buy quality growth companies at more

attractive-than-usual valuations. Consequently, we took advantage of market volatility to buy several stocks that had long been on our EQV radar.

     Stock selection in the portfolio continued to be driven by the underlying fundamentals of companies, not any top-down macroeconomic views. That said, because of our belief in the long-term strength of consumer growth outside the U.S., we maintained overweight exposure to the consumer discretionary sector at the end of the reporting period. We reduced our exposure to the health care sector slightly but remained overweight compared to the Fund’s style-specific index. The Fund also ended the reporting period with overweight exposure to the energy and IT sectors, while our largest underweight positions were in the materials, industrials, and consumer staples sectors.

     At the close of the reporting period, we remained focused on investing according to our bottom-up stock selection process and maintaining our long-term investment view.

     We thank you for your continued investment in Invesco V.I. International Growth Fund.

1

Source: Lipper Inc.

2

Source: MSCI: Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.

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 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.

Steve Cao

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. International 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.

Mark Jason

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. International Growth Fund. He joined Invesco in 2001. Mr. Jason earned a B.S. in finance and a B.S. in real estate from California State University at Northridge.

Invesco V.I. International Growth Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class(es)

Fund and index data from 12/31/01*

* During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (5/5/93)			6.99	%
	10	Years	7.11
	5	Years	-0.53
	1	Year	-6.74
Series II Shares
Inception (9/19/01)			7.31	%
	10	Years	6.83
	5	Years	-0.78
	1	Year	-6.99

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 1.04% and 1.29%, 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, 2011, 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

Developing markets securities risk. 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.

     Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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 investing risk. 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.

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

     Market risk. 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 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, Australasia 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, 2011

	Shares		Value
Common Stocks & Other Equity Interests–90.94%
Australia–5.82%
BHP Billiton Ltd.		455,880	$	16,091,924
Brambles Ltd.		2,235,983		16,374,658
CSL Ltd.		286,823		9,387,602
QBE Insurance Group Ltd.		701,757		9,294,954
WorleyParsons Ltd.		606,233		15,882,514
				67,031,652
Belgium–1.93%
Anheuser-Busch InBev N.V.		362,640		22,148,200
Brazil–2.46%
Banco Bradesco S.A.–ADR		1,180,003		19,682,450
Petroleo Brasileiro S.A.–ADR		369,109		8,670,371
				28,352,821
Canada–5.85%
Agrium Inc.		132,231		8,875,104
Canadian National Railway Co.		129,482		10,186,477
Canadian Natural Resources Ltd.		253,593		9,496,047
Cenovus Energy Inc.		320,865		10,654,557
Fairfax Financial Holdings Ltd.		25,187		10,803,858
Suncor Energy, Inc.		601,017		17,332,037
				67,348,080
China–1.20%
Industrial & Commercial Bank of China Ltd.–Class H		23,195,000		13,804,265
Denmark–1.49%
Novo Nordisk A.S.–Class B		149,589		17,191,443
France–6.27%
BNP Paribas S.A.		219,077		8,605,784
Cap Gemini S.A.		260,708		8,109,655
Cie Generale des Etablissements Michelin–Class B		104,786		6,160,418
Danone S.A.		226,689		14,250,612
Eutelsat Communications S.A		193,492		7,536,139
L’Oreal S.A		70,004		7,311,918
Publicis Groupe S.A.		128,186		5,883,282
Schneider Electric S.A.		126,621		6,617,570
Total S.A.		150,487		7,681,300
				72,156,678
Germany–4.92%
Adidas AG		252,490		16,424,858
Bayer AG		90,629		5,794,675
Bayerische Motoren Werke AG		55,889		3,736,614
Fresenius Medical Care AG & Co. KGaA		201,842		13,715,315
SAP AG		321,057		16,974,976
				56,646,438
Hong Kong–2.28%
China Mobile Ltd.		1,340,000		13,064,872
Hutchison Whampoa Ltd.		1,585,000		13,210,463
				26,275,335
India–0.87%
Infosys Ltd.		192,539		10,042,035
Israel–1.73%
Teva Pharmaceutical Industries Ltd.–ADR		493,993		19,937,558
Japan–9.21%
Canon Inc.		456,900		20,249,922
Denso Corp.		464,800		12,821,715
FANUC Corp.		69,600		10,656,200
Keyence Corp.		45,300		10,927,580
Komatsu Ltd.		292,137		6,815,500
Nidec Corp.		142,495		12,372,842
Toyota Motor Corp.		368,800		12,278,726
Yamada Denki Co., Ltd.		292,630		19,929,571
				106,052,056
Mexico–3.45%
America Movil SAB de C.V.–Series L–ADR		629,027		14,216,010
Fomento Economico Mexicano, S.A.B. de C.V.–ADR		212,219		14,793,787
Grupo Televisa S.A.B.–ADR		506,722		10,671,565
				39,681,362
Netherlands–2.88%
Koninklijke (Royal) KPN N.V.		168,309		2,009,512
Koninklijke Ahold N.V.		898,204		12,079,338
Unilever N.V.		454,154		15,596,927
VimpelCom Ltd.–ADR		363,183		3,439,343
				33,125,120
Russia–0.92%
Gazprom OAO–ADR		994,429		10,600,613
Singapore–2.35%
Keppel Corp. Ltd.		2,084,661		14,900,788
United Overseas Bank Ltd.		1,031,000		12,106,338
				27,007,126

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

Invesco V.I. International Growth Fund

	Shares		Value
South Korea–2.46%
Hyundai Mobis		54,347	$	13,770,076
NHN Corp.(a)		79,662		14,585,172
				28,355,248
Spain–0.53%
Amadeus IT Holding S.A.–Class A		380,769		6,151,361
Sweden–3.02%
Kinnevik Investment A.B.–Class B		286,593		5,584,928
Swedbank A.B.–Class A		778,397		10,084,298
Telefonaktiebolaget LM Ericsson–Class B		1,282,861		13,032,357
Volvo A.B.–Class B		552,654		6,008,790
				34,710,373
Switzerland–8.10%
ABB Ltd.(a)		682,815		12,853,672
Julius Baer Group Ltd.(a)		310,808		12,089,228
Nestle S.A.		316,875		18,194,622
Novartis AG		343,762		19,655,046
Roche Holding AG		84,080		14,220,921
Syngenta AG(a)		55,277		16,270,728
				93,284,217
Taiwan–1.39%
Taiwan Semiconductor Manufacturing Co. Ltd.–ADR		1,243,220		16,049,970
Turkey–0.63%
Akbank T.A.S.		2,270,373		7,201,103
United Kingdom–21.18%
BG Group PLC		880,867		18,791,373
British American Tobacco PLC		395,410		18,767,794
Centrica PLC		2,302,316		10,346,576
Compass Group PLC		2,766,196		26,198,250
GlaxoSmithKline PLC		416,138		9,491,482
Imperial Tobacco Group PLC		642,681		24,309,595
Informa PLC		1,655,582		9,256,239
International Power PLC		1,556,037		8,150,623
Kingfisher PLC		2,752,677		10,719,953
Next PLC		346,548		14,734,028
Reed Elsevier PLC		2,039,801		16,445,173
Royal Dutch Shell PLC–Class B		462,183		17,618,618
Shire PLC		302,315		10,495,643
Smith & Nephew PLC		1,105,477		10,714,726
Tesco PLC		2,443,252		15,312,330
Vodafone Group PLC		4,679,475		13,004,414
WPP PLC		911,833		9,524,986
				243,881,803
Total Common Stocks & Other Equity Interests (Cost $836,474,217)				1,047,034,857
Preferred Stocks–0.99%
Germany–0.99%
Volkswagen AG -1.63% Pfd. (Cost $14,017,517)		76,068		11,375,563
Money Market Funds–8.43%
Liquid Assets Portfolio–Institutional Class(b)		48,544,895		48,544,895
Premier Portfolio–Institutional Class(b)		48,544,895		48,544,895
Total Money Market Funds (Cost $97,089,790)				97,089,790
TOTAL INVESTMENTS–100.36% (Cost $947,581,524)				1,155,500,210
OTHER ASSETS LESS LIABILITIES–(0.36)%				(4,088,300	)
NET ASSETS–100.00%			$	1,151,411,910

Investment Abbreviations:

ADR	– American Depositary Receipt
Pfd.	– Preferred

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

December 31, 2011

Assets:
Investments, at value (Cost $850,491,734)	$	1,058,410,420
Investments in affiliated money market funds, at value and cost		97,089,790
Total investments, at value (Cost $947,581,524)		1,155,500,210
Foreign currencies, at value (Cost $816,921)		823,809
Receivable for:
Investments sold		17,956
Fund shares sold		1,803,402
Dividends		4,175,652
Investment for trustee deferred compensation and retirement plans		61,727
Other assets		190
Total assets		1,162,382,946
Liabilities:
Payable for:
Investments purchased		8,389,244
Fund shares reacquired		1,047,060
Accrued fees to affiliates		1,087,627
Accrued other operating expenses		266,148
Trustee deferred compensation and retirement plans		180,957
Total liabilities		10,971,036
Net assets applicable to shares outstanding	$	1,151,411,910
Net assets consist of:
Shares of beneficial interest	$	1,183,401,097
Undistributed net investment income		18,339,786
Undistributed net realized gain (loss)		(258,508,038	)
Unrealized appreciation		208,179,065
	$	1,151,411,910
Net Assets:
Series I	$	544,142,504
Series II	$	607,269,406
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		20,637,504
Series II		23,284,098
Series I:
Net asset value per share	$	26.37
Series II:
Net asset value per share	$	26.08

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $2,436,148)	$	32,571,151
Dividends from affiliated money market funds		86,398
Total investment income		32,657,549
Expenses:
Advisory fees		8,381,388
Administrative services fees		3,137,238
Custodian fees		364,091
Distribution fees — Series II		1,505,155
Transfer agent fees		76,233
Trustees’ and officers’ fees and benefits		68,410
Other		131,751
Total expenses		13,664,266
Less: Fees waived		(126,641	)
Net expenses		13,537,625
Net investment income		19,119,924
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (net of tax on the sale of foreign investments of $186)		54,328,405
Foreign currencies		(512,075	)
		53,816,330
Change in net unrealized appreciation (depreciation) of:
Investment securities (net of foreign taxes on holdings of $2,336,660)		(159,501,801	)
Foreign currencies		(35,056	)
		(159,536,857	)
Net realized and unrealized gain (loss)		(105,720,527	)
Net increase (decrease) in net assets resulting from operations	$	(86,600,603	)

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, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	19,119,924		$	18,371,750
Net realized gain (loss)		53,816,330			(17,156,987	)
Change in net unrealized appreciation (depreciation)		(159,536,857	)		41,178,093
Net increase (decrease) in net assets resulting from operations		(86,600,603	)		42,392,856
Distributions to shareholders from net investment income:
Series I		(8,703,100	)		(11,906,519	)
Series II		(6,565,728	)		(9,115,881	)
Total distributions from net investment income		(15,268,828	)		(21,022,400	)
Share transactions–net:
Series I		6,595,238			(19,927,647	)
Series II		90,856,363			(903,010,172	)
Net increase (decrease) in net assets resulting from share transactions		97,451,601			(922,937,819	)
Net increase (decrease) in net assets		(4,417,830	)		(901,567,363	)
Net assets:
Beginning of year		1,155,829,740			2,057,397,103
End of year (includes undistributed net investment income of $18,339,786 and $15,003,445, respectively)	$	1,151,411,910		$	1,155,829,740

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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. International 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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

Invesco V.I. International Growth Fund

	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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective May 2, 2011, 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 1.11% and Series II shares to 1.36% of average daily net assets. Prior to May 2, 2011, the Adviser had contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of 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 items or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless 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 reimburse expenses during the period under the expense limitation.

  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 (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $126,641.

  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. International Growth 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, 2011, Invesco was paid $281,281 for accounting and fund administrative services and reimbursed $2,855,957 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, Invesco Ltd., 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, 2011. 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	$	35,057,214	$	31,974,438	$	—	$	67,031,652
Belgium		—		22,148,200		—		22,148,200
Brazil		28,352,821		—		—		28,352,821
Canada		67,348,080		—		—		67,348,080
China		—		13,804,265		—		13,804,265
Denmark		17,191,443		—		—		17,191,443
France		30,168,314		41,988,364		—		72,156,678
Germany		52,909,824		15,112,177		—		68,022,001
Hong Kong		—		26,275,335		—		26,275,335
India		10,042,035		—		—		10,042,035
Israel		19,937,558		—		—		19,937,558
Japan		61,763,273		44,288,783		—		106,052,056
Mexico		39,681,362		—		—		39,681,362
Netherlands		3,439,343		29,685,777		—		33,125,120
Russia		10,600,613		—		—		10,600,613
Singapore		—		27,007,126		—		27,007,126
South Korea		28,355,248		—		—		28,355,248
Spain		—		6,151,361		—		6,151,361
Sweden		15,669,226		19,041,147		—		34,710,373

Invesco V.I. International Growth Fund

	Level 1*		Level 2*		Level 3		Total
Switzerland		32,508,718		60,775,499		—		93,284,217
Taiwan		16,049,970		—		—		16,049,970
Turkey		—		7,201,103				7,201,103
United Kingdom		149,409,104		94,472,699		—		243,881,803
United States		97,089,790		—		—		97,089,790
Total Investments	$	715,573,936	$	439,926,274	$	—	$	1,155,500,210

*  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, 2011, the Fund paid legal fees of $2,606 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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, 2011 and 2010:

	2011		2010
Ordinary income	$	15,268,828	$	21,022,400

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	18,518,772
Net unrealized appreciation — investments		185,778,657
Net unrealized appreciation — other investments		260,384
Temporary book/tax differences		(178,985	)
Capital loss carryforward		(236,368,015	)
Shares of beneficial interest		1,183,401,097
Total net assets	$	1,151,411,910

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. Under these limitation rules, the Fund is limited to utilizing $226,177,234 of capital loss carryforward in the fiscal year ending December 31, 2012.

Invesco V.I. International Growth Fund

  The Fund utilized $46,997,606 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, 2011, which expires as follows:

Capital Loss Carryforward
Expiration	Short-Term
December 31, 2016	$	55,375,763
December 31, 2017		143,189,697
December 31, 2018		37,802,555
	$	236,368,015

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

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, 2011 was $335,013,091 and $280,952,344, 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	$	222,745,738
Aggregate unrealized (depreciation) of investment securities		(36,967,081	)
Net unrealized appreciation of investment securities	$	185,778,657
Cost of investments for tax purposes is $969,721,553.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryforward and foreign currency transactions, on December 31, 2011, undistributed net investment income was decreased by $512,075, undistributed net realized gain (loss) was increased by $29,108,216 and shares of beneficial interest decreased by $28,596,141. Further, as a result of tax deferrals and capital loss carryforward acquired in the reorganization of Invesco Van Kampen V.I. International Growth Equity Fund into the Fund, undistributed net investment income was decreased by $2,680, undistributed net realized gain (loss) was decreased by $44,174,791 and shares of beneficial interest increased by $44,177,471. These reclassifications had no effect on the net assets of the Fund.

Invesco V.I. International Growth Fund

NOTE 9—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		4,674,557		$	132,444,153			3,482,926		$	94,266,556
Series II		5,695,478			157,043,118			6,653,404			171,405,013
Issued as reinvestment of dividends:
Series I		292,246			8,703,100			445,770			11,906,519
Series II		222,492			6,565,728			345,168			9,115,882
Issued in connection with acquisitions:(b)
Series I		426			13,190			—			—
Series II		1,107,888			34,002,342			—			—
Reacquired:
Series I		(4,761,021	)		(134,565,205	)		(4,909,461	)		(126,100,722	)
Series II		(3,833,060	)		(106,754,825	)		(45,442,204	)		(1,083,531,067	)
Net increase (decrease) in share activity		3,399,006		$	97,451,601			(39,424,397	)	$	(922,937,819	)

(a)	There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 35% 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 Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.
(b)	As of the open of business on May 2, 2011, the Fund acquired all the net assets of Invesco Van Kampen V.I. International Growth Equity Fund (the “Target Fund”) pursuant to a plan of reorganization approved by the Trustees of the Fund on November 10, 2010 and by the shareholders of the Target Fund on April 1, 2011. The acquisition was accomplished by a tax-free exchange of 1,108,314 shares of the Fund for 3,524,810 shares outstanding of the Target Fund as of the close of business on April 29, 2011. Each class of the Target Fund was exchanged for the like class of shares of the Fund based on the relative net asset value of the Target Fund to the net asset value of the Fund on the close of business, April 29, 2011. The Target Fund’s net assets at that date of $34,015,533 including $7,388,865 of unrealized appreciation, was combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $1,248,419,884. The net assets of the Fund immediately following the acquisition were $1,282,435,417.
	The pro forma results of operations for the year ended December 31, 2011, assuming the reorganization had been completed on January 1, 2011, the beginning of the annual reporting period are as follows:

Net investment income	$	19,406,572
Net realized/unrealized gains (losses)		(102,914,763	)
Change in net assets resulting from operations	$	(83,508,191	)

The combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earrings of the Target Fund that have been included in the Fund’s Statement of Operations since May 2, 2011.

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 12/31/11	$	28.69	$	0.50	$	(2.38	)	$	(1.88	)	$	(0.44	)	$	—		$	(0.44	)	$	26.37		(6.74	)%	$	544,143		1.02	%(d)		1.03	%(d)		1.75	%(d)		26	%
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			1.04			1.46			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
Series II
Year ended 12/31/11		28.35		0.42		(2.36	)		(1.94	)		(0.33	)		—			(0.33	)		26.08		(6.99	)		607,269		1.27	(d)		1.28	(d)		1.50	(d)		26
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			1.29			1.21			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

(a)	Calculated using the 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. For the period ending December 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $23,376,285 and sold of $8,831,296 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Van Kampen V.I. International Growth Equity Fund into the Fund.
(d)	Ratios are based on average daily net assets (000’s omitted) of $577,422 and $602,062 for Series I and Series II shares, respectively.

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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	874.60	$	4.82	$	1,020.06	$	5.19		1.02	%
Series II		1,000.00		873.40		6.00		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, 2011 through December 31, 2011, 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, 2011:

Federal and State Income Tax
Corporate Dividends Received Deduction*		0%
Foreign Taxes	$	0.0523 per share
Foreign Source Income	$	0.8758 per share

*  The above percentages are 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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. International Growth Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. International Growth Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. International Growth Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. International Growth Fund

Invesco V.I. Leisure Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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

On May 2, 2011, Ido Cohen became the lead portfolio manager of the Invesco V.I. Leisure Fund. Mr. Cohen is a portfolio manager for Invesco large-cap growth equity strategies and has 14 years of experience in the investment industry. Juan Hartsfield was named co-manager.

     Equity markets were quite volatile during the year ended December 31, 2011, and investors generally favored less economically sensitive sectors. Invesco V.I. Leisure Fund underperformed its broad market benchmark, the S&P 500 Index, as well as its style-specific benchmark, the S&P 500 Consumer Discretionary Index, for the reporting period. Underperformance relative to the Fund’s style-specific index was predominately the result of security selection within the hotels, restaurants and leisure industry, the software industry and the media industry.

     Your Fund’s long-term performance can be found later in this report.

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	-3.85	%
Series II Shares	-4.04
S&P 500 Index▼ (Broad Market Index)	2.09
S&P 500 Consumer Discretionary Index▼ (Style-Specific Index)	6.13

Source(s): ^▼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 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.

     We construct the portfolio with the goal of holding from 40 to 75 individual stocks with an average investment horizon of 18 to 24 months. Portfolio weightings are adjusted based on current economic and industry conditions.

     We may reduce or eliminate exposure to a stock when:

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 indicates negative underlying information which is further determined to have violated a fundamental investment thesis.

Market conditions and your Fund

Equity markets were highly volatile during 2011 as investors weighed the competing issues of improved corporate profits, soft macroeconomic data and sovereign debt issues in Europe. In the U.S., corporate earnings increased, but often were overshadowed by concerns about high unemployment and a lack of consumer confidence. After generally rising through July, major equity indexes sold off precipitously in August as the U.S. received the first-ever downgrade to its credit rating from Standard & Poor’s, and while the sovereign debt crisis unfolded in the eurozone, prompting fears of a “double-dip” recession. Equity markets rebounded in the fourth quarter of 2011, despite a lack of meaningful resolutions to improve the global economy.

     Major domestic equity indexes produced positive returns for the calendar year, and seven out of 10 sectors in the S&P 500 Index posted gains. ¹ Less economically sensitive sectors such as utilities, consumer staples and health care had the highest returns. Conversely, financials, materials and industrials were the market laggards and produced losses for the reporting period.

     The Fund’s underperformance relative to the S&P 500 Consumer Discretionary Index was predominately the result of security selection in the hotels, restaurants and leisure industry, the software industry and the media industry. Top individual detractors from Fund performance included Rovi and Starwood Hotels and

Portfolio Composition

By sector

Consumer Discretionary	84.1	%
Information Technology	11.0
Consumer Staples	3.6
Financials	0.5
Money Market Funds
Plus Other Assets Less Liabilities	0.8

Top 10 Equity Holdings*

1.	Apple Inc.		4.8	%
2.	Home Depot, Inc. (The)		4.6
3.	NIKE, Inc.-Class B		4.5
4.	Comcast Corp.-Class A		4.5
5.	Starbucks Corp.		4.2
6.	Macy’s, Inc.		4.2
7.	DIRECTV-Class A		4.2
8.	Interpublic Group of Cos., Inc. (The)	3.1
9.	CBS Corp.-Class B		2.8
10.	Amazon.com, Inc.		2.8

Top Five Industries

1.	Restaurants	9.7	%
2.	Cable & Satellite	8.6
3.	Movies & Entertainment	8.5
4.	Broadcasting	6.3
5.	Footwear	6.1

Total Net Assets	$17.0 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. Leisure Fund

Resorts. Rovi is a global leader in digital entertainment products and services, while Starwood Hotels and Resorts is a hotel and leisure company with brand names such as St. Regis, Westin and Sheraton. Investors reacted negatively when both companies announced earnings projections for the third quarter and for fiscal year 2011 that would fall short of analysts’ expectations. We continued to hold the stocks at the close of the reporting period.

     The Fund benefited from exposure to industries outside of the consumer discretionary sector; specifically, security selection in the computers and peripherals industry, the beverages industry, and the Internet software and services industry contributed positively to the Fund’s relative performance. Top individual contributors to performance during the reporting period included Starbucks and Hansen Natural. In general, both companies benefited from investor preference for consumer staples stocks given the volatility of the equity market in 2011. In addition, Starbucks acquired Evolution Fresh – known for its premium juice brand Naked Juice, in November, further affirming its interest in consumer packaged goods.

     During the year, we increased our exposure to a number of trends we expect to continue for the foreseeable future. First, we expect income growth in emerging markets to continue to outpace U.S. income growth. As a result, we expect companies levered to both high- and low-end discretionary spending in emerging markets will continue to see more rapid growth than their U.S.- and European-focused peers. Second, we expect the shift toward increased online retail consumption will continue. As a result, we expect online retailers will continue to take share from traditional retailers, and thus see more rapid growth. And third, we expect the shift toward online media consumption will continue, and will take share from more traditional formats.

     We believe the rate of growth of global discretionary spending may lag prior recoveries as U.S. consumer leverage remains above the long-term average and personal savings as a percentage of disposable income will likely remain above recent levels as consumers reduce their leverage. We believe consumer spending at the low-end of the spectrum in the U.S. may also remain constrained given continued high levels of unemployment.

     As always, we thank you for your continued investment in Invesco V.I. Leisure Fund.

1 Source: 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.

Ido Cohen
Portfolio manager, is lead manager of Invesco V.I. Leisure Fund. Mr. Cohen joined Invesco in 2010. He is a cum laude graduate of The Wharton School of the University of Pennsylvania with a B.S. in economics.

Juan Hartsfield
Chartered Financial Analyst, portfolio manager, is 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.

Invesco V.I. Leisure Fund

Your Fund’s Long-Term Performance

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

Fund and index data from 4/30/02

1 Source: Lipper Inc.

Past performance cannot guarantee comparable future results.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (4/30/02)			3.11	%
	5	Years	-2.55
	1	Year	-3.85
Series II Shares
Inception			2.89	%
	5	Years	-2.76
	1	Year	-4.04

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 1.01% 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 1.65% and 1.90%, 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 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, 2013. 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, 2011, 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

Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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.

     Initial Public Offering (IPO) risk. The prices of IPO securities may fluctuate more than prices of equity securities of companies with longer trading histories. In addition, companies offering securities in IPOs may have less experienced management or limited operating histories. There can be no assurance that the Fund will have favorable IPO investment opportunities.

     Leisure industry risk. 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.

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

     Market risk. 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.

     Sector fund risk. The Fund’s investments are concentrated in a comparatively narrow segment of the economy, which may make the Fund more volatile than non-concentrated funds.

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.

     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. Leisure Fund

Schedule of Investments^(a)

December 31, 2011

	Shares		Value
Common Stocks & Other Equity Interests–99.22%
Advertising–3.84%
Interpublic Group of Cos., Inc. (The)		54,404	$	529,351
National CineMedia, Inc.		10,089		125,104
				654,455
Apparel Retail–1.98%
Express, Inc.		8,401		167,516
TJX Cos., Inc.		2,626		169,508
				337,024
Apparel, Accessories & Luxury Goods–3.78%
Michael Kors Holdings Ltd.(b)		9,117		248,438
Prada S.p.A. (Italy)(b)		48,500		218,164
Under Armour, Inc.–Class A(b)		2,470		177,321
				643,923
Auto Parts & Equipment–1.85%
Johnson Controls, Inc.		10,066		314,663
Automobile Manufacturers–2.75%
Ford Motor Co.(b)		15,041		161,841
Honda Motor Co., Ltd. (Japan)		5,293		161,247
Tesla Motors, Inc.(b)(c)		5,118		146,170
				469,258
Automotive Retail–2.44%
AutoZone, Inc.(b)		681		221,304
Group 1 Automotive, Inc.		3,752		194,354
				415,658
Broadcasting–6.25%
CBS Corp.–Class B		17,785		482,685
Scripps Networks Interactive–Class A		9,100		386,022
Sirius XM Radio Inc.(b)		107,319		195,321
				1,064,028
Cable & Satellite–8.62%
Comcast Corp.–Class A		32,084		760,712
DIRECTV–Class A(b)		16,565		708,319
				1,469,031
Casinos & Gaming–3.71%
Las Vegas Sands Corp.(b)		6,264		267,661
Penn National Gaming, Inc.(b)		9,555		363,759
				631,420
Computer Hardware–4.80%
Apple Inc.(b)		2,021		818,505
Consumer Finance–0.49%
EZCORP, Inc.–Class A(b)		3,144		82,907
Department Stores–4.19%
Macy’s, Inc.		22,157		713,012
Distributors–1.25%
Pool Corp.		7,054		212,325
Footwear–6.13%
Deckers Outdoor Corp.(b)		3,706		280,062
NIKE, Inc.–Class B		7,921		763,347
				1,043,409
General Merchandise Stores–1.52%
Dollar Tree, Inc.(b)		1,111		92,335
Target Corp.		3,240		165,953
				258,288
Home Entertainment Software–1.88%
Electronic Arts Inc.(b)		15,533		319,980
Home Improvement Retail–6.08%
Home Depot, Inc. (The)		18,525		778,791
Lowe’s Cos., Inc.		10,087		256,008
				1,034,799
Homebuilding–0.62%
D.R. Horton, Inc.		8,373		105,584
Homefurnishing Retail–2.98%
Bed Bath & Beyond Inc.(b)		4,464		258,778
Mattress Firm Holding Corp.(b)		10,754		249,385
				508,163
Hotels, Resorts & Cruise Lines–3.18%
Hyatt Hotels Corp.–Class A(b)		7,076		266,341
Marriott International Inc.–Class A		4,484		130,798
Starwood Hotels & Resorts Worldwide, Inc.		3,000		143,910
				541,049
Hypermarkets & Super Centers–1.53%
Costco Wholesale Corp.		3,128		260,625
Internet Retail–3.15%
Amazon.com, Inc.(b)		2,713		469,620
Priceline.com Inc.(b)		143		66,883
				536,503
Internet Software & Services–2.86%
Baidu, Inc.–ADR (China)(b)		729		84,907
eBay Inc.(b)		2,684		81,406

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–(continued)
Google Inc.–Class A(b)		421	$	271,924
Yandex NV–Class A (Netherlands)(b)(c)		2,476		48,777
				487,014
Motorcycle Manufacturers–1.60%
Harley-Davidson, Inc.		7,005		272,284
Movies & Entertainment–8.52%
News Corp.–Class A		12,771		227,835
Time Warner Inc.		10,065		363,749
Viacom Inc.–Class A(c)		6,785		361,844
Viacom Inc.–Class B		4,329		196,580
Walt Disney Co. (The)		8,018		300,675
				1,450,683
Packaged Foods & Meats–1.25%
Diamond Foods, Inc.(c)		6,631		213,982
Restaurants–9.72%
Chipotle Mexican Grill, Inc.(b)		1,371		463,041
Domino’s Pizza, Inc.(b)		2,567		87,150
McDonald’s Corp.		2,987		299,686
P.F. Chang’s China Bistro, Inc.		2,957		91,401
Starbucks Corp.		15,509		713,569
				1,654,847
Soft Drinks–0.82%
Hansen Natural Corp.(b)		1,510		139,131
Systems Software–1.43%
Rovi Corp.(b)		9,885		242,973
Total Common Stocks & Other Equity Interests (Cost $14,519,045)				16,895,523
Money Market Funds–0.84%
Liquid Assets Portfolio–Institutional Class(d)		71,339		71,339
Premier Portfolio–Institutional Class(d)		71,339		71,339
Total Money Market Funds (Cost $142,678)				142,678
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.06% (Cost $14,661,723)				17,038,201
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–2.02%
Liquid Assets Portfolio–Institutional Class (Cost $344,030)(d)(e)		344,030		344,030
TOTAL INVESTMENTS–102.08% (Cost $15,005,753)				17,382,231
OTHER ASSETS LESS LIABILITIES–(2.08)%				(353,365	)
NET ASSETS–100.00%			$	17,028,866

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, 2011.
(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. Leisure Fund

Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $14,519,045)*	$	16,895,523
Investments in affiliated money market funds, at value and cost		486,708
Total investments, at value (Cost $15,005,753)		17,382,231
Receivable for:
Investments sold		207,644
Dividends		21,179
Investment for trustee deferred compensation and retirement plans		15,005
Total assets		17,626,059
Liabilities:
Payable for:
Investments purchased		167,067
Fund shares reacquired		17,227
Collateral upon return of securities loaned		344,030
Accrued fees to affiliates		17,643
Accrued other operating expenses		32,787
Trustee deferred compensation and retirement plans		18,439
Total liabilities		597,193
Net assets applicable to shares outstanding	$	17,028,866
Net assets consist of:
Shares of beneficial interest	$	16,797,777
Undistributed net investment income		(156	)
Undistributed net realized gain (loss)		(2,145,244	)
Unrealized appreciation		2,376,489
	$	17,028,866
Net Assets:
Series I	$	16,701,147
Series II	$	327,719
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		2,197,332
Series II		43,250
Series I:
Net asset value per share	$	7.60
Series II:
Net asset value per share	$	7.58

*  At December 31, 2011, securities with an aggregate value of $340,539 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $403)	$	205,334
Dividends from affiliated money market funds (includes securities lending income of $10,247)		10,526
Total investment income		215,860
Expenses:
Advisory fees		144,463
Administrative services fees		98,099
Custodian fees		8,028
Distribution fees — Series II		655
Transfer agent fees		3,053
Trustees’ and officers’ fees and benefits		18,008
Professional services fees		32,328
Other		16,507
Total expenses		321,141
Less: Fees waived		(126,010	)
Net expenses		195,131
Net investment income		20,729
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains from securities sold to affiliates of $85,725)		1,945,302
Foreign currencies		(55	)
		1,945,247
Change in net unrealized appreciation (depreciation) of:
Investment securities		(2,646,202	)
Foreign currencies		109
		(2,646,093	)
Net realized and unrealized gain (loss)		(700,846	)
Net increase (decrease) in net assets resulting from operations	$	(680,117	)

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, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	20,729		$	82,921
Net realized gain		1,945,247			1,755,492
Change in net unrealized appreciation (depreciation)		(2,646,093	)		2,139,829
Net increase (decrease) in net assets resulting from operations		(680,117	)		3,978,242
Distributions to shareholders from net investment income:
Series I		(74,798	)		(104,603	)
Series II		(1,157	)		(460	)
Total distributions from net investment income		(75,955	)		(105,063	)
Share transactions–net:
Series I		(3,335,030	)		(3,420,143	)
Series II		202,301			122,973
Net increase (decrease) in net assets resulting from share transactions		(3,132,729	)		(3,297,170	)
Net increase (decrease) in net assets		(3,888,801	)		576,009
Net assets:
Beginning of year		20,917,667			20,341,658
End of year (includes undistributed net investment income of ($156) and $55,122, respectively)	$	17,028,866		$	20,917,667

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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 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. 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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

Invesco V.I. Leisure Fund

	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 affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
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 a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide 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, 2013, 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 1.01% 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 operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2013.

  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 (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $126,010.

  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, 2011, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $48,099 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, IIS and/or IDI.

NOTE 3—Additional Valuation Information

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

  Level 1 — Prices are determined using quoted prices in an active market for identical assets.

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, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	17,002,820	$	379,411	$	—	$	17,382,231

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, 2011, the Fund engaged in securities purchases of $30,467 and securities sales of $392,619, which resulted in net realized gains of $85,725.

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, 2011, the Fund paid legal fees of $1,144 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010:

	2011		2010
Ordinary income	$	75,955	$	105,063

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	18,281
Net unrealized appreciation — investments		2,374,536
Net unrealized appreciation — other investments		11
Temporary book/tax differences		(18,437	)
Capital loss carryforward		(2,143,302	)
Shares of beneficial interest		16,797,777
Total net assets	$	17,028,866

Invesco V.I. Leisure Fund

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund utilized $1,926,808 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, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term		Long-Term		Total
December 31, 2017	$	2,143,302	$	—	$	2,143,302

*  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, 2011 was $13,438,203 and $16,734,302, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	2,949,728
Aggregate unrealized (depreciation) of investment securities		(575,192	)
Net unrealized appreciation of investment securities	$	2,374,536
Cost of investments for tax purposes is $15,007,695.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, on December 31, 2011, undistributed net investment income was decreased by $52 and undistributed net realized gain (loss) was increased by $52. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		7,213		$	57,118			28,641		$	201,622
Series II		33,680			270,258			28,815			204,872
Issued as reinvestment of dividends:
Series I		10,260			74,798			14,816			104,602
Series II		155			1,127			65			460
Reacquired:
Series I		(436,760	)		(3,466,946	)		(531,332	)		(3,726,367	)
Series II		(8,996	)		(69,084	)		(11,814	)		(82,359	)
Net increase (decrease) in share activity		(394,448	)	$	(3,132,729	)		(470,809	)	$	(3,297,170	)

^(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 Fund 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. Leisure 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) on																						to average			to average net			Ratio of net
	Net asset		Net			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)			unrealized)			operations			income			gains			distributions			of period		return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/11	$	7.94	$	0.01	(c)	$	(0.32	)	$	(0.31	)	$	(0.03	)	$	—		$	(0.03	)	$	7.60		(3.85	)%	$	16,701		1.01	%(d)		1.66	%(d)		0.11	%(d)		70	%
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			1.65			0.41			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
Series II
Year ended 12/31/11		7.93		(0.01	)(c)		(0.31	)		(0.32	)		(0.03	)		—			(0.03	)		7.58		(4.04	)		328		1.26	(d)		1.91	(d)		(0.14	)(d)		70
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			1.90			0.16			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

(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 $19,000 and $262 for Series I and Series II shares, respectively.

NOTE 12—Proposed Reorganization

The Board of Trustees of the Fund 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”).

  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 2012. 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.

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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	900.20	$	4.85	$	1,020.10	$	5.15		1.01	%
Series II		1,000.00		899.50		6.04		1,018.84		6.42		1.26

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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. 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, 2011:

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. 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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex		Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140		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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140		None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158		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)	140		ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. Leisure Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. Leisure Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. Leisure Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. Leisure Fund

Invesco V.I. Mid Cap Core Equity Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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

Invesco V.I. Mid Cap Core Equity Fund delivered negative returns for the year ended December 31, 2011, trailing the broad U.S. stock market, as measured by the S&P 500 Index, and the Fund’s style-specific benchmark, the Russell Midcap Index. The Fund benefited from holdings in the health care and utilities sectors, while holdings in the energy and industrials sectors detracted from results. The Fund’s underweight exposure to the consumer staples and utilities sectors was the largest detractor from results versus the style-specific benchmark.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	-6.38	%
Series II Shares	-6.50
S&P 500 Index▼ (Broad Market Index)	2.09
Russell Midcap Index▼ (Style-Specific Index)	-1.55
Lipper VUF Mid-Cap Core Funds Index▼ (Peer Group Index)	-3.51

Source: ^▼ Lipper Inc.

How we invest

We seek to provide returns in excess of those provided by passive benchmarks, across a full market cycle, which we define as market trough to market trough, or market peak to market peak. In order to potentially realize these returns, we believe that investors need to be given a reason to stick with the Fund for long periods of time. As Fund managers, we believe the best way we can encourage this is by delivering a smoother, or less volatile, investor experience, particularly in turbulent, down-trending markets. The portfolio we construct is intended to provide attractive participation during positive-trending equity and a measure of downside protection during more turbulent, down-trending equity markets. We seek to manage your Fund using a conservative approach to mid-cap investing, keeping in mind that securities of mid-sized companies may be more volatile than securities of large-sized companies. As part of a well-diversified asset allocation strategy, the Fund may complement

more aggressive or cyclical investment strategies.

     The Fund’s portfolio is comprised of what we call “core” stocks. A core stock encompasses elements of growth (revenues, profits, economic value) and value (both absolute and comparative measures). Along this growth-value continuum, we seek to identify and invest in areas of temporary disconnection between market perception and the view our research uncovers.

     In order to build a portfolio of core stocks, 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 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, when we have not seen a demonstrable improvement in fundamentals or when a more compelling investments opportunity exists.

Market conditions and your Fund

The year began with equity markets fueled on the second round of “quantitative easing” by the U.S. Federal Reserve. Markets rose through the first quarter of 2011. Thereafter, volatility drastically increased due to civil unrest in Egypt and Libya and the devastating earthquake and tsunami in Japan. Corporate earnings were largely positive, but often overshadowed by investor concerns about continuing high unemployment, weak consumer spending and soft housing data. At the same time, the sovereign debt crisis intensified in the eurozone and growth in developed economies slowed, weighing on investor sentiment and prompting fears of a global recession. Despite signs of sustained but muted growth, these macroeconomic factors continued to weigh on markets through the end of the reporting period.

     In this environment, major U.S. equity indexes delivered somewhat flat results for the year. The S&P 500 Index was up slightly for the year, but the Nasdaq Composite Index declined slightly. These tepid results masked a great deal of volatility in 2011, and we were active managers

Portfolio Composition

By sector

Industrials	18.3	%
Information Technology	17.3
Health Care	11.3
Energy	9.8
Financials	8.7
Consumer Discretionary	6.4
Consumer Staples	4.3
Materials	3.7
Telecommunication Services	0.7
Utilities	0.5
Money Market Fund Plus Other Assets Less Liabilities	19.0

Top 10 Equity Holdings*

1.	Symantec Corp.	2.5	%
2.	Adobe Systems Inc.	2.0
3.	Weatherford International Ltd.	1.9
4.	Safeway Inc.	1.9
5.	Linear Technology Corp.	1.9
6.	Southwestern Energy Co.	1.8
7.	Hologic, Inc.	1.8
8.	Molson Coors Brewing Co.-Class B	1.8
9.	Aetna Inc.	1.7
10.	Kirby Corp.	1.5

Top Five Industries

1. Oil & Gas Equipment & Services	4.9	%
2. Aerospace & Defense	4.3
3. Oil & Gas Exploration & Production	3.8
4. Industrial Machinery	3.8
5. Systems Software	3.7

Total Net Assets	$387.3 million
Total Number of Holdings*	85

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

throughout – taking profits into the market’s strength in the first half of the year and using weakness in the third quarter to invest in attractively valued, core stocks.

     One area of strength in which we reduced our position was Motorola Mobility, the largest contributor to Fund results for the year. The company, a spin-off from parent company Motorola Solutions, is focused primarily on the handset and home DVR and cable equipment businesses. We also held Motorola Solutions during the reporting period but sold our position in the stock before the close of the reporting period. In August, Google (not a Fund holding at the close of the reporting period) announced plans to acquire Motorola Mobility at a premium for $12.5 billion in cash, or $40 per share.¹

     Another strong contributor to Fund performance for the year was Aetna, one of the largest managed health care providers in the U.S. The company has been a good investment for the Fund. We originally purchased Aetna in early 2010. The managed health care industry had been under pressure for quite some time due to health care reform concerns and weak margins. Also, historically high unemployment has resulted in shrinking enrollment and utilization and a less favorable membership mix within plans. Our view at the time of our purchase was that the company was under-earning but was taking steps to improve its pricing, which would improve its margins over time. In 2011, the company’s earnings improved considerably, largely driven by an improvement in margins. We reduced some of our exposure during the reporting period on relative strength, but at the end of the year, it remained one of the Fund’s top holdings.

     Some of the Fund’s largest detractors during the year were in the energy sector. These detractors included Cal Dive International and Weatherford International.

     Cal Dive International, a provider of underwater services to offshore oil and natural gas firms, reported weak earnings and utilization, citing a lack of new drilling in the Gulf of Mexico due to slow permitting activity following a 2010 oil spill. We sold our position in Cal Dive International before the close of the reporting period.

     Oil services firm Weatherford International was a new investment for us in 2011. The company faced a number of headline issues early in the year that negatively affected the stock. These issues included a restatement of the company’s financial results due to improper income tax reporting. The company faced additional pressures (as did some of its peers) through the summer due to fears of a global economic recession and its

potential impact on energy demand. We believe the company has room to improve its margins and that oil equipment and service firms will continue to benefit from increased capital expenditures and the need for more sophisticated extraction technologies. We were active investors in the company throughout the year as the stock’s valuation became increasingly attractive.

     The largest individual detractor from Fund results was Foster Wheeler, a global construction and engineering firm that specializes in project engineering, procurement, construction and maintenance services primarily related to the oil and gas industry. The company is a traditional “late cycle” business that has lagged other commodity-related cyclical companies in recent years. We invested in the company during the market pull-back over the summer. We believed the company’s contract backlog had reached a low point, and that global infrastructure spending is likely to accelerate in the coming years. The company is geographically diversified across developed and emerging markets and, in our view, may benefit from exposure to these markets.

     Over the year, our cash weighting fluctuated as market choppiness allowed us to buy on weakness and sell into strength. Markets rallied in the first half of the reporting period, providing us with opportunities to take profits; however, as market volatility increased over the summer, we purchased quality companies that are leveraged to growth markets around the world. During the year, we increased our exposure to the information technology, consumer discretionary and energy sectors, and we reduced our exposure to the health care, financials and materials sectors. As a result of our buys and sells, our cash position increased slightly compared to the prior year-end, and it stood at approximately 19% of total net assets at the end of the reporting period.

     Maintaining a conservative approach is an enduring part of our investment strategy. Amid the market’s volatility, we sought judicious long-term investments for the Fund. At the end of the year, the Fund was positioned with more or less a “barbell” approach, balancing our more cyclical holdings in energy, industrials and information technology with cash and health care holdings, which typically tend to be more defensive.

     Regardless of market conditions, our goal remains the same: to provide upside participation with a measure of downside protection, so that over a full market cycle we may deliver strong investment results with reduced risk relative to the Fund’s style-specific benchmark.

     As always, we would like to thank you for your continued investment in Invesco V.I. Mid Cap Core Equity Fund.

1 Source: Google

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. He joined Invesco in 1998. Mr. Sloan earned a B.S. in business administration and an M.B.A. from the University of Missouri.

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 Phi 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 Invesco V.I. Mid Cap Core Equity Fund. Mr. Nelson joined Invesco in 2004. He earned a B.A. from the University of California-Santa Barbara.

Invesco V.I. Mid Cap Core Equity Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment

Fund and index data from 12/31/01*

* During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

Average Annual Total Returns
As of 12/31/11
Series I Shares
Inception (9/10/01)	5.89	%
10 Years	5.32
5 Years	1.73
1 Year	-6.38
Series II Shares
Inception (9/10/01)	5.64	%
10 Years	5.09
5 Years	1.49
1 Year	-6.50

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 1.03% and 1.28%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     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 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. 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, 2011, 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

Cash/cash equivalents risk. Holding cash or cash equivalents may negatively affect performance.

     Credit risk. 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.

     Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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. 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.

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

     Market risk. 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.

     Small and mid-capitalization risk. 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.

     U.S. government obligations risk. 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.

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 Dow Jones Industrial Average is a price-weighted index of the 30 largest, most widely held stocks traded on the New York Stock Exchange.

     The Nasdaq Composite Index (price-only) is a broad-based capitalization-weighted index of all NASDAQ National Market & Small Cap stocks.

     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, 2011

	Shares		Value
Common Stocks–81.01%
Aerospace & Defense–4.30%
Alliant Techsystems Inc.		62,631	$	3,579,988
Exelis Inc.		429,815		3,889,826
ITT Corp.		128,006		2,474,356
Moog Inc.–Class A(b)		78,143		3,432,822
Xylem, Inc.		127,752		3,281,949
				16,658,941
Air Freight & Logistics–0.80%
Expeditors International of Washington, Inc.		75,261		3,082,691
Apparel Retail–1.22%
Citi Trends Inc.(b)		145,654		1,278,842
Guess?, Inc.		115,272		3,437,411
				4,716,253
Apparel, Accessories & Luxury Goods–0.21%
Michael Kors Holdings Ltd.(b)		30,494		830,962
Application Software–1.97%
Adobe Systems Inc.(b)		270,539		7,648,138
Asset Management & Custody Banks–1.94%
Legg Mason, Inc.		126,816		3,049,925
Northern Trust Corp.		112,569		4,464,486
				7,514,411
Auto Parts & Equipment–0.98%
Tenneco Inc.(b)		127,364		3,792,900
Biotechnology–0.54%
Biogen Idec Inc.(b)		18,850		2,074,442
Brewers–1.78%
Molson Coors Brewing Co.–Class B		157,910		6,875,401
Communications Equipment–3.29%
Juniper Networks, Inc.(b)		209,205		4,269,874
Motorola Mobility Holdings Inc.(b)		103,804		4,027,595
Research In Motion Ltd. (Canada)(b)		168,895		2,448,977
Tellabs, Inc.		498,168		2,012,599
				12,759,045
Computer & Electronics Retail–1.05%
GameStop Corp.–Class A(b)		167,935		4,052,272
Computer Storage & Peripherals–0.54%
NetApp, Inc.(b)		45,332		1,644,192
SMART Technologies Inc.–Class A (Canada)(b)		124,683		460,080
				2,104,272
Construction & Engineering–2.63%
Chicago Bridge & Iron Co. N.V.–New York Shares (Netherlands)		133,006		5,027,627
Foster Wheeler AG (Switzerland)(b)		269,120		5,150,957
				10,178,584
Construction & Farm Machinery & Heavy Trucks–1.17%
Terex Corp.(b)		336,381		4,544,507
Construction Materials–0.90%
CRH PLC (Ireland)		175,244		3,483,929
Consumer Electronics–0.53%
Garmin Ltd. (Switzerland)		51,206		2,038,511
Data Processing & Outsourced Services–0.86%
Western Union Co.		181,683		3,317,532
Department Stores–1.02%
Macy’s, Inc.		122,861		3,953,667
Electric Utilities–0.51%
Edison International		47,596		1,970,474
Electrical Components & Equipment–2.32%
Cooper Industries PLC (Ireland)		79,618		4,311,315
Thomas & Betts Corp.(b)		85,556		4,671,357
				8,982,672
Electronic Components–2.27%
Amphenol Corp.–Class A		119,389		5,419,067
Dolby Laboratories Inc.–Class A(b)		110,380		3,367,694
				8,786,761
Electronic Equipment & Instruments–0.40%
Checkpoint Systems, Inc.(b)		142,826		1,562,516
Electronic Manufacturing Services–0.79%
Molex Inc.		128,999		3,077,916
Environmental & Facilities Services–1.17%
Republic Services, Inc.		165,020		4,546,301
Food Retail–1.90%
Safeway Inc.		350,538		7,375,320
Health Care Equipment–2.80%
Boston Scientific Corp.(b)		485,379		2,591,924
Hologic, Inc.(b)		398,795		6,982,900
Olympus Corp. (Japan)		97,900		1,287,689
				10,862,513

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–1.22%
Rhoen-Klinikum AG (Germany)		110,662	$	2,108,343
VCA Antech, Inc.(b)		131,480		2,596,730
				4,705,073
Health Care Services–2.39%
DaVita, Inc.(b)		28,511		2,161,419
Laboratory Corp. of America Holdings(b)		36,264		3,117,616
Quest Diagnostics Inc.		68,385		3,970,433
				9,249,468
Industrial Conglomerates–0.57%
Tyco International Ltd.		47,106		2,200,321
Industrial Machinery–3.76%
IDEX Corp.		7,928		294,208
Ingersoll-Rand PLC (Ireland)		157,861		4,810,025
Parker Hannifin Corp.		60,296		4,597,570
SPX Corp.		80,437		4,847,938
				14,549,741
Insurance Brokers–1.19%
Marsh & McLennan Cos., Inc.		145,297		4,594,291
Investment Banking & Brokerage–0.71%
Charles Schwab Corp. (The)		243,884		2,746,134
Leisure Products–0.39%
Hasbro, Inc.		47,704		1,521,281
Life & Health Insurance–1.14%
Torchmark Corp.		102,154		4,432,462
Life Sciences Tools & Services–2.28%
Agilent Technologies, Inc.(b)		142,803		4,988,109
Waters Corp.(b)		51,739		3,831,273
				8,819,382
Managed Health Care–1.72%
Aetna Inc.		158,161		6,672,813
Marine–1.52%
Kirby Corp.(b)		89,512		5,893,470
Multi-Sector Holdings–0.37%
PICO Holdings, Inc.(b)		69,441		1,429,096
Oil & Gas Drilling–0.62%
Transocean Ltd.		62,636		2,404,596
Oil & Gas Equipment & Services–4.95%
Cameron International Corp.(b)		116,354		5,723,453
Dresser-Rand Group, Inc.(b)		82,674		4,126,259
ShawCor Ltd. (Canada)		65,431		1,854,778
Weatherford International Ltd.(b)		509,144		7,453,868
				19,158,358
Oil & Gas Exploration & Production–3.76%
Cimarex Energy Co.		38,348		2,373,741
Newfield Exploration Co.(b)		134,176		5,062,461
Southwestern Energy Co.(b)		222,845		7,117,669
				14,553,871
Oil & Gas Refining & Marketing–0.48%
Valero Energy Corp.		88,288		1,858,462
Personal Products–0.62%
Avon Products, Inc.		137,269		2,398,089
Pharmaceuticals–0.39%
Hospira, Inc.(b)		49,112		1,491,531
Property & Casualty Insurance–1.48%
Progressive Corp. (The)		293,274		5,721,776
Restaurants–1.03%
Darden Restaurants, Inc.		87,582		3,991,988
Semiconductors–3.44%
Linear Technology Corp.		241,126		7,241,014
Microchip Technology Inc.		75,218		2,755,235
Xilinx, Inc.		103,602		3,321,480
				13,317,729
Specialized Finance–0.74%
Moody’s Corp.		85,062		2,864,888
Specialty Chemicals–2.32%
International Flavors & Fragrances Inc.		89,648		4,699,348
Sigma-Aldrich Corp.		68,839		4,299,684
				8,999,032
Steel–0.44%
Allegheny Technologies, Inc.		35,974		1,719,557
Systems Software–3.71%
CA, Inc.		228,504		4,619,208
Symantec Corp.(b)		623,130		9,751,985
				14,371,193
Thrifts & Mortgage Finance–1.12%
People’s United Financial Inc.		338,579		4,350,740

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
Trucking–0.11%
Con-way Inc.		14,557	$	424,482
Wireless Telecommunication Services–0.65%
MetroPCS Communications, Inc.(b)		289,931		2,516,601
Total Common Stocks (Cost $282,442,662)				313,747,356
Money Market Funds–20.24%
Liquid Assets Portfolio–Institutional Class(c)		39,197,101		39,197,101
Premier Portfolio–Institutional Class(c)		39,197,100		39,197,100
Total Money Market Funds (Cost $78,394,201)				78,394,201
TOTAL INVESTMENTS–101.25% (Cost $360,836,863)				392,141,557
OTHER ASSETS LESS LIABILITIES–(1.25)%				(4,843,552	)
NET ASSETS–100.00%			$	387,298,005

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. Mid Cap Core Equity Fund

Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $282,442,662)	$	313,747,356
Investments in affiliated money market funds, at value and cost		78,394,201
Total investments, at value (Cost $360,836,863)		392,141,557
Receivable for:
Investments sold		58,019
Fund shares sold		952,143
Dividends		345,496
Investment for trustee deferred compensation and retirement plans		27,584
Total assets		393,524,799
Liabilities:
Payable for:
Investments purchased		5,384,985
Fund shares reacquired		466,142
Accrued fees to affiliates		274,912
Accrued other operating expenses		12,530
Trustee deferred compensation and retirement plans		88,225
Total liabilities		6,226,794
Net assets applicable to shares outstanding	$	387,298,005
Net assets consist of:
Shares of beneficial interest	$	355,313,593
Undistributed net investment income		103,625
Undistributed net realized gain		576,282
Unrealized appreciation		31,304,505
	$	387,298,005
Net Assets:
Series I	$	322,102,473
Series II	$	65,195,532
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		27,853,344
Series II		5,685,658
Series I:
Net asset value per share	$	11.56
Series II:
Net asset value per share	$	11.47

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $26,707)	$	4,714,782
Dividends from affiliated money market funds (includes securities lending income of $11,715)		79,314
Total investment income		4,794,096
Expenses:
Advisory fees		3,202,658
Administrative services fees		1,224,573
Custodian fees		12,581
Distribution fees — Series II		160,829
Transfer agent fees		21,973
Trustees’ and officers’ fees and benefits		36,700
Other		38,351
Total expenses		4,697,665
Less: Fees waived		(96,968	)
Net expenses		4,600,697
Net investment income		193,399
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains from securities sold to affiliates of $114,930)		34,270,404
Foreign currencies		(7,232	)
Option contracts written		21,601
		34,284,773
Change in net unrealized appreciation (depreciation) of:
Investment securities		(61,222,154	)
Foreign currencies		39
		(61,222,115	)
Net realized and unrealized gain (loss)		(26,937,342	)
Net increase (decrease) in net assets resulting from operations	$	(26,743,943	)

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, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	193,399		$	1,149,522
Net realized gain		34,284,773			41,205,337
Change in net unrealized appreciation (depreciation)		(61,222,115	)		18,415,260
Net increase (decrease) in net assets resulting from operations		(26,743,943	)		60,770,119
Distributions to shareholders from net investment income:
Series I		(1,052,469	)		(2,274,130	)
Series II		(54,708	)		(186,084	)
Total distributions from net investment income		(1,107,177	)		(2,460,214	)
Share transactions–net:
Series I		(66,537,862	)		(71,565,903	)
Series II		8,287,414			(1,706,198	)
Net increase (decrease) in net assets resulting from share transactions		(58,250,448	)		(73,272,101	)
Net increase (decrease) in net assets		(86,101,568	)		(14,962,196	)
Net assets:
Beginning of year		473,399,573			488,361,769
End of year (includes undistributed net investment income of $103,625 and $1,024,635, respectively)	$	387,298,005		$	473,399,573

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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. Mid Cap Core 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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. Mid Cap Core 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 affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
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.
L.	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.
M.	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,

Invesco V.I. Mid Cap Core Equity Fund

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.

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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide 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, 2013, 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, including litigation expenses; 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, 2013. 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, 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 (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $96,968.

  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, 2011, Invesco was paid $111,601 for accounting and fund administrative services and reimbursed $1,112,972 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, Invesco Ltd., 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. Mid Cap Core Equity 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, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	392,141,557	$	—	$	—	$	392,141,557

NOTE 4—Derivative Investments

Effect of Derivative Instruments for the year ended December 31, 2011

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
	Options
Realized Gain
Equity risk	$	21,601

Transactions During the Period
	Call Option Contracts
	Number of			Premiums
	Contracts			Received
Beginning of period		—		$	—
Written		786			21,601
Expired		(786	)		(21,601	)
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, 2011, the Fund engaged in securities purchases of $3,129,311 and securities sales of $508,551, which resulted in net realized gains of $114,930.

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, 2011, the Fund paid legal fees of $1,707 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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

Invesco V.I. Mid Cap Core Equity Fund

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, 2011 and 2010:

	2011		2010
Ordinary income	$	1,107,177	$	2,460,214

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	190,969
Undistributed long-term gain		3,215,961
Net unrealized appreciation — investments		28,665,015
Net unrealized appreciation (depreciation) — other investments		(189	)
Temporary book/tax differences		(87,344	)
Shares of beneficial interest		355,313,593
Total net assets	$	387,298,005

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund utilized $30,475,922 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. 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, 2011 was $218,368,941 and $298,216,720, 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	$	45,524,815
Aggregate unrealized (depreciation) of investment securities		(16,859,800	)
Net unrealized appreciation of investment securities	$	28,665,015
Cost of investments for tax purposes is $363,476,542.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions on December 31, 2011, undistributed net investment income was decreased by $7,232 and undistributed net realized gain was increased by $7,232. 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
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		2,474,245		$	30,771,619			1,854,251		$	21,138,305
Series II		3,309,461			40,140,590			2,043,008			22,984,219
Issued as reinvestment of dividends:
Series I		98,178			1,052,469			201,607			2,274,130
Series II		5,142			54,708			16,630			186,084
Reacquired:
Series I		(7,967,805	)		(98,361,950	)		(8,395,150	)		(94,978,338	)
Series II		(2,643,335	)		(31,907,884	)		(2,228,501	)		(24,876,501	)
Net increase (decrease) in share activity		(4,724,114	)	$	(58,250,448	)		(6,508,155	)	$	(73,272,101	)

^(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 Fund 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) on																						to average			to average net			Ratio of net
	Net asset		Net			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)			unrealized)			operations			income			gains			Distributions			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I
Year ended 12/31/11	$	12.39	$	0.01	(c)	$	(0.80	)	$	(0.79	)	$	(0.04	)	$	—		$	(0.04	)	$	11.56		(6.38	)%	$	322,102		1.01	%(d)		1.03	%(d)		0.08	%(d)		57	%
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			1.03			0.27			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
Series II
Year ended 12/31/11		12.28		(0.02	)(c)		(0.78	)		(0.80	)		(0.01	)		—			(0.01	)		11.47		(6.50	)		65,196		1.26	(d)		1.28	(d)		(0.17	)(d)		57
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			1.28			0.02			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

(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 annualized and based on average daily net assets (000’s omitted) of $377,414 and $64,332 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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	880.10	$	4.83	$	1,020.06	$	5.19		1.02	%
Series II		1,000.00		879.10		6.02		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, 2011 through December 31, 2011, 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, 2011:

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. 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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. Mid Cap Core Equity Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. Mid Cap Core Equity Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. Mid Cap Core Equity Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. Mid Cap Core Equity Fund

Invesco V.I. Money Market Fund

Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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 fiscal year ended December 31, 2011.

     As of December 31, 2011, the Fund had 47 holdings and its net assets totaled $199.5 million. As of the same date, the Fund’s weighted average maturity was 19.87 days and the Fund’s weighted average life was 28.38 days.

Weighted average maturity (WAM) is an average of the maturities of all securities held in the portfolio, weighted by each security’s percentage of net assets. The days to maturity for WAM is the lower of the stated maturity date or next interest rate reset date. WAM reflects how a portfolio would react to interest rate changes.

     Weighted average life (WAL) is an average of all the maturities of all securities held in the portfolio, weighted by each security’s percentage of net assets. The days to maturity for WAL is the lower of the stated maturity date or next demand feature date. WAL reflects how a portfolio would react to deteriorating credit (widening spreads) or tightening liquidity conditions.

How we invest

The Fund invests only in high-quality U.S. dollar-denominated short-term fixed-income obligations. During the year covered by this report, 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

The period covered by this report was characterized by continued economic uncertainty and increased market volatility, into which the European debt crisis figured prominently.

     The crisis, which began in Greece and ultimately spread to the region’s third-largest economy, Italy, threatened the liquidity of European banks and the viability of the euro as the region’s common currency. European leaders worked diligently for the past two years to strengthen their national economies, increase fiscal discipline among European Union member governments and stabilize the European banking system.

     In 2010, European leaders created the European Financial Stability Facility in an effort to preserve financial stability in Europe by providing loans to member governments facing financial difficulties. In October 2011, they agreed to additional measures to recapitalize European banks, to better ensure they have adequate financial resources to weather possible future financial turmoil. In December 2011, European leaders concluded an intergovernmental agreement to increase coordination of fiscal policy. These initiatives were complemented by the European Central Bank which, in a series of efforts coordinated with other central banks in Europe, Asia and the U.S.,

sought to ensure U.S. dollar liquidity to European banks. As the situation in Europe continued to unfold, U.S. money market funds pared back their exposure to European financial institutions, reducing their exposure from 53.0% in May 2011 to 34.5% in December.¹

     Increasingly over the reporting period, it appeared that U.S. economic growth struggled to gain a solid footing. Gross domestic product, the broadest measure of overall U.S. economic activity, grew only modestly in 2011, with annualized rates of 2.0% or less in the first three quarters of 2011.² So while the economy expanded, it did so at a rate slower than is necessary to significantly reduce unemployment, which remained elevated at around 9.0% for most of the reporting period.³

     Against this backdrop, the U.S. Federal Reserve (the Fed) maintained its accommodative monetary policy. The Fed maintained its target policy rate in a range of between zero and 0.25%, committing in its August 9 statement to keep its target policy rate at these ultra-low levels at least through mid-2013.⁴ The Fed subsequently announced “Operation Twist,” which aimed to lower long-term interest rates in order to boost borrowing by extending the average maturity of portfolio holdings on the Fed’s balance sheet. For money market funds, this could translate into a slight pickup in supply of short term paper, with a minimal impact on yields. More broadly, however, with no change to monetary policy, money market funds continued to operate in an ultra-low interest rate environment.

     Over the course of the year covered by this report, yields on short-term Treasury bills declined. The yield on three-month Treasury notes fell from 0.12% on

December 31, 2010, to 0.01% on December 30, 2011.⁵ Since reaching an all-time low of 0.25% in June,⁵ the three-month Libor⁶ more than doubled to 0.58% on December 30, 2011, revisiting highs last seen in June 2010, when the European debt crisis first emerged.⁵

     In this evolving and challenging environment for money market funds, Invesco Global Cash Management remains committed to the preservation of principal and providing daily liquidity, while seeking to deliver a competitive yield.

     Thank you for investing with us.

1	Source: Investment Company Institute
2	Source: Bureau of Economic Analysis
3	Source: Bureau of Labor Statistics
4	Source: U.S. Federal Reserve
5	Source: Bloomberg LP
6	Libor is the world’s most widely followed benchmark for short-term interest rates. Fixed daily, the Libor is the interest rate at which banks in the London interbank market can borrow overnight funds from one another. It serves as a base when determining interest rates for corporations and other large borrowers.

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.

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, you may lose money by investing in the Fund.

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, 2011, 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

Counterparty risk. Individually negotiated or over-the-counter derivatives are also subject to counterparty risk, which is the risk that the other party to the contract (such as a futures contract or swap agreement) will not fulfill its contractual obligations, which may cause losses or additional costs to the Fund.

     Credit risk. 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.

     Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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.

     Industry focus risk. To the extent a fund invests in securities issued or guaranteed by companies in the banking and financial services industries, the fund’s performance will depend 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.

     Interest rate risk. 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.

     Liquidity risk. The Fund 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.

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

     Market risk. 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.

     Municipal securities risk. The Fund may invest in municipal securities. Constitutional amendments, legislative enactments, executive orders, administrative regulations, voter initiatives, and the issuer’s regional economic conditions may affect the municipal security’s value, interest payments, repayment of principal and the Fund’s ability to sell it. Failure of a municipal security issuer to comply with applicable tax requirements may make income paid thereon taxable, resulting in a decline in the security’s value. In addition, there could be changes in

applicable tax laws or tax treatments that reduce or eliminate the current federal income tax exemption on municipal securities or otherwise adversely affect the current federal or state tax status of municipal securities.

     Repurchase agreement risk. 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.

     Synthetic securities risk. 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. These instruments may be subject to counterparty risk and liquidity risk.

     U.S. government obligations risk.

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.

     Variable-rate demand notes risk.

The absence of an active secondary market for certain variable and floating rate notes could make it difficult to dispose of the instruments, and a portfolio could suffer a loss if the issuer defaults during periods in which a portfolio is not entitled to exercise its demand rights.

Portfolio Composition by Maturity

In days, as of 12/31/11

1-7	46.6	%
8-30	34.2
31-60	14.9
61-90	2.0
91-180	2.3

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. 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. Money Market Fund

Schedule of Investments

December 31, 2011

						Principal
	Interest			Maturity		Amount
	Rate			Date		(000)		Value
Commercial Paper–64.64%(a)
Asset-Backed Securities–Commercial Loans/Leases–2.50%
Atlantis One Funding Corp.(b)(c)		0.30	%		01/03/12	$	5,000	$	4,999,917
Asset-Backed Securities–Consumer Receivables–9.53%
Bryant Park Funding LLC		0.17	%		01/20/12		5,000		4,999,551
Old Line Funding, LLC(b)		0.22	%		01/03/12		4,919		4,918,940
Old Line Funding, LLC(b)		0.22	%		02/01/12		3,069		3,068,419
Sheffield Receivables Corp.(b)		0.32	%		01/13/12		6,025		6,024,357
									19,011,267
Asset-Backed Securities–Fully Supported Bank–12.38%
Fairway Finance Co., LLC (CEP–Bank of Montreal)(c)		0.18	%		02/24/12		9,500		9,497,435
Gotham Funding Corp. (CEP–Bank of Tokyo-Mitsubishi UFJ, Ltd. (The))(b)(c)		0.18	%		01/03/12		2,500		2,499,975
Govco LLC (CEP–Citibank, N.A.)		0.15	%		01/23/12		8,200		8,199,248
Victory Receivables Corp. (CEP–Bank of Tokyo-Mitsubishi UFJ, Ltd. (The))(b)(c)		0.35	%		01/12/12		4,500		4,499,519
									24,696,177
Asset-Backed Securities–Multi-Purpose–22.04%
CAFCO, LLC		0.24	%		01/04/12		5,000		4,999,900
Chariot Funding, LLC/Ltd.		0.16	%		02/14/12		3,000		2,999,413
Chariot Funding, LLC/Ltd.		0.18	%		02/16/12		6,200		6,198,574
CRC Funding LLC		0.24	%		01/04/12		4,000		3,999,920
CRC Funding LLC		0.14	%		01/17/12		5,500		5,499,658
Jupiter Securitization Corp.		0.20	%		01/05/12		5,000		4,999,889
Jupiter Securitization Corp.		0.22	%		03/15/12		4,000		3,998,191
Nieuw Amsterdam Receivables Corp.(b)(c)		0.20	%		01/03/12		5,000		4,999,944
Regency Markets No. 1, LLC(b)(c)		0.27	%		01/12/12		6,284		6,283,482
									43,978,971
Asset-Backed Securities–Securities–2.50%
Solitaire Funding Ltd./LLC(b)(c)		0.38	%		01/13/12		5,000		4,999,367
Asset-Backed Securities–Trade Receivables–4.79%
Market Street Funding LLC(b)		0.16	%		02/13/12		5,000		4,999,044
Market Street Funding LLC(b)		0.25	%		04/02/12		4,571		4,568,080
									9,567,124
Diversified Banks–3.76%
National Australia Funding Delaware Inc.(b)(c)		0.25	%		01/23/12		7,500		7,498,862
Diversified Metals & Mining–4.38%
BHP Biliton Finance USA Ltd.(b)(c)		0.13	%		01/24/12		8,750		8,749,273
Life & Health Insurance–2.76%
MetLife Short Term Funding LLC(b)		0.16	%		01/20/12		5,500		5,499,536
Total Commercial Paper (Cost $129,000,494)									129,000,494

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

Invesco V.I. Money Market Fund

						Principal
	Interest			Maturity		Amount
	Rate			Date		(000)		Value
Variable Rate Demand Notes–14.92%(d)
Credit Enhanced–14.92%
Atlanticare Health Services, Inc.; Series 2003, VRD Taxable Bonds (LOC–Wells Fargo Bank, N.A.)(e)		0.22	%		10/01/33	$	4,740	$	4,740,000
Benjamin Rose Institute (The) (Kethley House); Series 2005, VRD Taxable Notes (LOC–JPMorgan Chase Bank, N.A.)(e)		0.22	%		12/01/28		4,800		4,800,000
Collier (County of), Florida Industrial Development Authority (Allete, Inc.); Series 2006, Ref. VRD IDR (LOC–Wells Fargo Bank, N.A.)(e)		0.14	%		10/01/25		1,000		1,000,000
Connecticut (State of) Development Authority (Northeast Foods, Inc.); Series 1998, VRD IDR (LOC–Bank of America, N.A.)(b)(e)		0.59	%		06/01/13		725		725,000
Hamilton (County of), Ohio (Children’s Hospital Medical Center); Series 1997 A, VRD Hospital Facilities RB (LOC–PNC Bank, N.A.)(e)		0.10	%		05/15/17		600		600,000
M3 Realty, LLC; Series 2007, VRD RN (LOC–General Electric Capital Corp.)(b)(e)		0.30	%		01/01/33		2,200		2,200,000
Massachusetts (State of) Development Finance Agency (Milton Academy); Series 2009 B, VRD Taxable RB (LOC–TD Bank, N.A.)(e)		0.17	%		03/01/39		3,400		3,400,000
Massachusetts (State of) Development Finance Agency (Salema Family Limited Partnership); Series 1999 A, VRD IDR (LOC–Bank of America, N.A.)(e)		0.55	%		12/01/20		655		655,000
Massachusetts (State of) Housing Finance Agency; Series 2009 B, VRD Taxable RB (LOC–Bank of America, N.A.)(e)		0.27	%		01/01/44		4,800		4,800,000
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.)(e)		0.10	%		03/01/26		385		385,000
Ogden (City of), Utah Redevelopment Agency; Series 2009 B-1, Ref. VRD Taxable RB (LOC–Wells Fargo Bank, N.A.)(e)		0.22	%		12/01/27		2,530		2,530,000
Pitney Road Partners, LLC; Series 2008, VRD Notes (LOC–General Electric Capital Corp.)(b)(e)		0.25	%		07/01/25		2,055		2,055,000
Rock Island (County of), Illinois Metropolitan Airport Authority (Quad City International Airport Air Freight); Series 1998 A, VRD Priority RB (LOC–U.S. Bank, N.A.)(e)		0.28	%		12/01/18		390		390,000
St. Jean Industries, Inc.; Series 2006, VRD Taxable Notes (LOC–General Electric Capital Corp.)(b)(e)		0.25	%		10/01/21		1,000		1,000,000
St. Paul (City of), Minnesota Port Authority; Series 2009-10 CC, VRD District Cooling RB (LOC–Deutsche Bank AG)(c)(e)		0.20	%		03/01/29		500		500,000
Total Variable Rate Demand Notes (Cost $29,780,000)									29,780,000
Certificates of Deposit–12.03%
Bank of Nova Scotia		0.25	%		01/11/12		4,000		4,000,000
Deutsche Bank AG (Cayman Islands)(c)		0.06	%		01/03/12		9,000		9,000,000
Svenska Handelsbanken A.B. (United Kingdom)(c)		0.45	%		02/27/12		3,000		3,000,023
Svenska Handelsbanken A.B. (Cayman Islands)(c)		0.01	%		01/03/12		6,000		6,000,000
Toronto-Dominion Bank		0.26	%		01/12/12		2,000		2,000,000
Total Certificates of Deposit (Cost $24,000,023)									24,000,023
Bank Notes–2.26%
Toyota Motor Credit Corp., Sr. Unsec. Floating Rate MTN(f) (Cost $4,500,000)		0.80	%		01/15/13		4,500		4,500,000
TOTAL INVESTMENTS (excluding Repurchase Agreements)–93.85% (Cost $187,280,517)									187,280,517
						Repurchase
						Amount
Repurchase Agreements–6.24%(g)
Wells Fargo Securities, LLC, Joint agreement dated 12/30/11, maturing value $500,002,778 (collateralized by U.S. Treasury obligations valued at $510,000,001; 2.35%-5.52%, 11/01/21-12/15/41)		0.05	%		01/03/12		3,457,808		3,457,789
Wells Fargo Securities, LLC, Joint agreement dated 12/30/11, aggregate maturing value $500,007,778 (collateralized by Mortgage-Backed securities and other instruments valued at $525,000,001; 0%-6.98%, 03/13/12-07/15/56)		0.14	%		01/03/12		9,000,140		9,000,000
Total Repurchase Agreements (Cost $12,457,789)									12,457,789
TOTAL INVESTMENTS(h)(i)–100.09% (Cost $199,738,306)									199,738,306
OTHER ASSETS LESS LIABILITIES–(0.09)%									(183,538	)
NET ASSETS–100.00%								$	199,554,768

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

Invesco V.I. Money Market Fund

Investment Abbreviations:

CEP	– Credit Enhancement Provider
IDR	– Industrial Development Revenue Bonds
LOC	– Letter of Credit
MTN	– Medium-Term Notes
RB	– Revenue Bonds
Ref.	– Refunding
RN	– Revenue Notes
VRD	– Variable Rate Demand

Notes to Schedule of Investments:

(a)	Security may be traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund.
(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, 2011 was $79,588,715, which represented 39.88% of the Fund’s Net Assets.
(c)	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: Australia: 8.1%; Cayman Islands: 7.5%; United Kingdom: 7.2%; Netherlands: 5.0%; other countries less than 5% each: 8.5%.
(d)	Demand security payable upon demand by the Fund at specified time intervals no greater than thirteen months. Interest rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2011.
(e)	Principal and interest payments are fully enhanced by a letter of credit from the bank listed or a predecessor bank, branch or subsidiary.
(f)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2011.
(g)	Principal amount equals value at period end. See Note 1I.
(h)	Also represents cost for federal income tax purposes.
(i)	Entities may either issue, guarantee, back or otherwise enhance the credit quality of a security. The entities are not primarily responsible for the issuer’s obligation but may be called upon to satisfy the issuer’s obligations. No concentration of any single entity was greater than 5% each.

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, 2011

Assets:
Investments, at value (Cost $199,738,306)	$	199,738,306
Interest receivable		19,682
Investment for trustee deferred compensation and retirement plans		37,529
Total assets		199,795,517
Liabilities:
Payable for:
Fund shares reacquired		38,047
Dividends		3,074
Accrued fees to affiliates		119,733
Accrued other operating expenses		31,397
Trustee deferred compensation and retirement plans		48,498
Total liabilities		240,749
Net assets applicable to shares outstanding	$	199,554,768
Net assets consist of:
Shares of beneficial interest	$	199,559,407
Undistributed net investment income		(2,496	)
Undistributed net realized gain (loss)		(2,143	)
	$	199,554,768
Net Assets:
Series I	$	198,532,755
Series II	$	1,022,013
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		198,533,674
Series II		1,021,811
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, 2011

Investment income:
Interest	$	237,010
Expenses:
Advisory fees		422,712
Administrative services fees		94,704
Custodian fees		15,275
Distribution fees — Series II		2,534
Transfer agent fees		5,364
Trustees’ and officers’ fees and benefits		20,665
Professional services fees		30,922
Other		12,927
Total expenses		605,103
Less: Fees waived		(422,026	)
Net expenses		183,077
Net investment income		53,933
Net increase in net assets resulting from operations	$	53,933

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, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	53,933		$	55,671
Net realized gain (loss)		—			(2,143	)
Net increase in net assets resulting from operations		53,933			53,528
Distributions to shareholders from net investment income:
Series I		(53,437	)		(53,205	)
Series II		(496	)		(2,466	)
Total distributions from net investment income		(53,933	)		(55,671	)
Share transactions–net:
Series I		172,954,380			(7,905,234	)
Series II		(2,229	)		(665,170	)
Net increase (decrease) in net assets resulting from share transactions		172,952,151			(8,570,404	)
Net increase (decrease) in net assets		172,952,151			(8,572,547	)
Net assets:
Beginning of year		26,602,617			35,175,164
End of year (includes undistributed net investment income of $(2,496) and $0, respectively)	$	199,554,768		$	26,602,617

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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 Daily 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide 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, 2013, 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 operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on April 30, 2013.

  The Adviser and/or Invesco Distributors, Inc., (“IDI”) voluntarily agreed to waive fees and/or reimburse 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, 2011, the Adviser voluntarily waived advisory fees of $419,492 and reimbursed class level expenses of $2,534 for Series II shares, in order to increase the Fund’s yields.

  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, 2011, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $44,704 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, 2011, 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, 2011, 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 the Adviser, IIS and/or IDI.

NOTE 3—Additional Valuation Information

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

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

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Short-Term Investments	$	—	$	199,738,306	$	—	$	199,738,306

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, 2011, the Fund engaged in securities purchases of $4,855,750.

Invesco V.I. Money Market 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, 2011, the Fund paid legal fees of $1,187 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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, 2011 and 2010:

	2011		2010
Ordinary income	$	53,933	$	55,671

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	44,802
Temporary book/tax differences		(47,298	)
Capital loss carryforward		(2,143	)
Shares of beneficial interest		199,559,407
Total net assets	$	199,554,768

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund has a capital loss carryforward as of December 31, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term
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.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of distributions, on December 31, 2011, undistributed net investment income decreased by $2,496 and shares of beneficial interest increased by $2,496. This reclassification had no effect on the net assets of the Fund.

Invesco V.I. Money Market Fund

NOTE 9—Share Information

	Summary of Share Activity
	Years ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		255,614,975		$	255,614,975			9,579,686		$	9,579,686
Series II		171,905			171,905			36,103			36,103
Issued as reinvestment of dividends:
Series I		11,674			11,674			53,205			53,205
Series II		496			496			2,466			2,466
Reacquired:
Series I		(82,672,269	)		(82,672,269	)		(17,538,125	)		(17,538,125	)
Series II		(174,630	)		(174,630	)		(703,739	)		(703,739	)
Net increase (decrease) in share activity		172,952,151		$	172,952,151			(8,570,404	)	$	(8,570,404	)

^(a) 89% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are other mutual funds that are also advised by Invesco.

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
																					to average			to average net			Ratio of net
	Net asset										Dividends										net assets			assets without			investment
	value,		Net			Net realized			Total from		from net			Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment			gains (losses)			investment		investment			value, end		Total			end of period		and/or expenses			and/or expenses			to average
	of period		income			on securities			operations		income			of period		Return(a)			(000s omitted)		absorbed			absorbed			net assets
Series I
Year ended 12/31/11	$	1.00	$	0.00	(b)	$	—		$	0.00	$	(0.00	)	$	1.00		0.05	%	$	198,533		0.17	%(c)		0.57	%(c)		0.05	%(c)
Year ended 12/31/10		1.00		0.00	(b)		(0.00	)		0.00		(0.00	)		1.00		0.18			25,578		0.16			1.01			0.18
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
Series II
Year ended 12/31/11		1.00		0.00	(b)		—			0.00		(0.00	)		1.00		0.05			1,022		0.17	(c)		0.82	(c)		0.05	(c)
Year ended 12/31/10		1.00		0.00	(b)		(0.00	)		0.00		(0.00	)		1.00		0.18			1,024		0.16			1.26			0.18
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

(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 $104,664 and $1,014 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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	1,000.30	$	0.86	$	1,024.35	$	0.87		0.17	%
Series II		1,000.00		1,000.30		0.86		1,024.35		0.87		0.17

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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, 2011:

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 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.

Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Number of Funds	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	in Fund Complex Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	Director of the Abraham Lincoln Presidential Library Foundation

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.

Invesco V.I. Money Market Fund

Trustees and Officers—(continued)

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.

Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Number of Funds
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	in Fund Complex Overseen by Trustee	Other Directorship(s) Held by Trustee
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)	140	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.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None

Invesco V.I. Money Market Fund

Trustees and Officers—(continued)

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.

Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Number of Funds	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	in Fund Complex Overseen by Trustee	Held by Trustee
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Custodian Bank of New York Mellon 2 Hanson Place Brooklyn, NY 11217-1431

Invesco V.I. Money Market Fund

Invesco V.I. S&P 500 Index Fund

Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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

For the year ended December 31, 2011, Series I shares of Invesco V.I. S&P 500 Index Fund slightly underperformed the S&P 500 Index but slightly outperformed the Lipper VUF S&P 500 Funds Index. The Fund seeks to provide investment results that, before expenses, correspond to the total return (i.e., capital appreciation and current income) of the S&P 500 Index.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	1.85	%
Series II Shares	1.53
S&P 500 Index▼ (Broad Market/Style-Specific Index)	2.09
Lipper VUF S&P 500 Funds Index▼ (Peer Group Index)	1.77
Source(s): ▼Lipper Inc.

As noted in the Fund’s latest semiannual report, the Fund has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.

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. Changes to the Fund’s portfolio are the result of Standard & Poor’s either adding a security to, or deleting a security from, the S&P 500 Index. Changes are not the result of any stock selection model.

     The Fund also may invest in S&P 500 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

Market volatility persisted throughout the year ended December 31, 2011. A number of factors adversely affected investor sentiment during the year, including sluggish economic growth and persistently high unemployment in the U.S.; political unrest in the Middle East and northern Africa; and the reemergence of sovereign debt concerns in Greece and other eurozone countries. Following the earthquake and tsunami that struck Japan in March – which caused the loss of life, a disruption in the supply chain and fears of a nuclear catastrophe – many market watchers were surprised that global markets merely stalled, rather than declined significantly.

     During the second half of the year, the debate on raising the U.S. debt ceiling began and investor sentiment changed from complacency to concern. The president and Congress eventually reached an agreement to raise the debt ceiling and prevent a federal government default, but not before much political wrangling that left investors unsettled. Following

the agreement, Standard & Poor’s issued its first-ever downgrade of long-term U.S. government debt. This caused the U.S. stock market to fall precipitously from its early-July highs.

     The U.S. stock market enjoyed a rally at the end of the reporting period as a full-blown financial contagion emanating from Europe did not materialize. Once eurozone leaders announced plans to more aggressively manage their sovereign debt problems, investors refocused their attention on investment opportunities in the U.S. Economic news at home was positive on balance and supportive of the stock market rally. Unemployment continued to inch lower, inflation remained tame as commodity prices slipped and consumer confidence and spending both increased despite a continued decline in home prices. The Federal Reserve continued to support the recovery by keeping short-term interest rates in a range of zero to 0.25% and by indicating no increase is likely until at least mid-2013.¹ In January 2012, after the close of the reporting period, the Fed indicated that it was unlikely to raise short-term interest rates before late 2014.¹
     On the geopolitical front, the war in Iraq officially ended in December. However, sovereign debt troubles in Europe continued to act as an overhang for the markets. In addition, a slowdown in global demand from China as its economy cooled was also a concern. Lastly, the U.S. debt burden still lingered given the failure of the congressional “super committee” to agree to long-term spending cuts. Despite these issues, the U.S. stock market remained resilient.

     Major equity indexes delivered mixed performances, with the S&P 500 Index generating a positive return for the year. For the year, larger capitalization stocks generally outperformed small-cap stocks and growth stocks generally edged value stocks.

Portfolio Composition

By sector

Information Technology	19.1	%
Financials	13.4
Energy	12.3
Health Care	11.9
Consumer Staples	11.6
Consumer Discretionary	10.8
Industrials	10.7
Utilities	3.9
Materials	3.6
Telecommunication Services	3.2
Money Market Funds Plus Other Assets Less Liabilities	-0.5

Top 10 Equity Holdings*

1.	Exxon Mobil Corp.	3.6	%
2.	Apple Inc.	3.3
3.	International Business Machines Corp.	1.9
4.	Chevron Corp.	1.9
5.	Microsoft Corp.	1.7
6.	General Electric Co.	1.7
7.	Procter & Gamble Co. (The)	1.6
8.	AT&T Inc.	1.6
9.	Johnson & Johnson	1.6
10.	Pfizer Inc.	1.5

Top Five Industries

1.	Integrated Oil & Gas	7.2	%
2.	Pharmaceuticals	6.3
3.	Computer Hardware	4.0
4.	Systems Software	2.9
5.	Integrated Telecommunication Services	2.9

Total Net Assets	$100.3 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. S&P 500 Index Fund

     The Fund stayed true to its process by investing in all components of the S&P 500 Index. Sectors that contributed the most to overall Fund performance were the consumer discretionary, consumer staples, energy, health care and utilities sectors. The financials and materials sectors delivered negative performance and were a drag on the Fund’s overall performance for the reporting period. In addition, the Fund’s allocation to S&P 500 futures contracts was a slight detractor from Fund performance.

     In the energy sector, Exxon Mobil was a top contributor to Fund performance. In June 2011, Exxon Mobil acquired Phillips Resources and related company TWP. In October, Exxon Mobil sold its distribution assets in Bolivia, Paraguay and Uruguay.

     Also contributing to the Fund’s performance were information technology giants Apple and International Business Machines.

     Detracting from Fund performance were select holdings in the financials sector, including Bank of America, Citigroup, Goldman Sachs and JP Morgan Chase. During December 2011, Fitch Ratings downgraded several European and U.S. banks, citing increased challenges in the financial markets. The agency cut by one notch its long-term ratings on Bank of America, Citigroup and Goldman Sachs. Fitch said the banks face challenges from economic developments and a myriad of regulatory changes.

     At the close of 2011, many of the issues that plagued markets during the year remained unresolved – and seemed likely to contribute to continued high levels of volatility. In Europe, the sovereign debt crisis showed no signs of abating and appeared to have pushed economies in the region back into recession. While economic data thus far remained more resilient in the U.S., overall growth has clearly slowed across the developed and emerging markets. That said, at the end of 2011, corporate balance sheets remained generally healthy and market valuations were attractive from an historical context.

     We would like to caution investors against making investment decisions based on short-term performance.

     We welcome new investors who joined the Fund during the year and thank all of our shareholders for your investment in Invesco V.I. S&P 500 Index 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.

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 an M.B.A. from Bentley College.

Glen Murphy
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. S&P 500 Index Fund. He joined Invesco in 1995. Mr. Murphy 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.

Daniel Tsai
Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. S&P 500 Index Fund. He 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. She joined Invesco in 1988. Ms. Unflat graduated magna cum laude from Queens College, where she earned a B.A. in economics. She earned an M.B.A. in finance from St. John’s University.

1 Source: U.S. Federal Reserve

Invesco V.I. S&P 500 Index Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class(es)

Fund and index data from 12/31/01*

* During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

     As noted earlier in this report, the Fund

has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer

group market measures. These additional benchmarks will now be included in the chart above.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (5/18/98)			2.46	%
	10	Years	2.64
	5	Years	-0.43
	1	Year	1.85
Series II Shares
Inception (6/5/00)			-0.01	%
	10	Years	2.37
	5	Years	-0.69
	1	Year	1.53

Effective June 1, 2010, Class X and Class Y shares of the predecessor fund, Morgan Stanley Variable Investment S&P 500 Index Portfolio 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 0.51% and 0.76%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     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, 2011, 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

Equity risk. 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.

     Index risk. 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 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.

     The Lipper VUF S&P 500 Funds Index is an unmanaged index considered representative of the S&P 500 variable insurance underlying funds tracked by Lipper.

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

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, 2011

	Shares		Value
Common Stocks & Other Equity Interests–100.49%
Advertising–0.15%
Interpublic Group of Cos., Inc. (The)		4,083	$	39,727
Omnicom Group Inc.		2,458		109,578
				149,305
Aerospace & Defense–2.68%
Boeing Co. (The)		6,581		482,716
General Dynamics Corp.		3,153		209,391
Goodrich Corp.		1,108		137,060
Honeywell International Inc.		6,849		372,243
L-3 Communications Holdings, Inc.		878		58,545
Lockheed Martin Corp.		2,349		190,034
Northrop Grumman Corp.		2,298		134,387
Precision Castparts Corp.		1,276		210,272
Raytheon Co.		3,064		148,236
Rockwell Collins, Inc.		1,352		74,860
Textron Inc.		2,456		45,412
United Technologies Corp.		8,023		586,401
Xylem, Inc.		1,598		41,053
				2,690,610
Agricultural Products–0.17%
Archer-Daniels-Midland Co.		5,946		170,056
Air Freight & Logistics–1.03%
C.H. Robinson Worldwide, Inc.		1,450		101,181
Expeditors International of Washington, Inc.		1,865		76,390
FedEx Corp.		2,808		234,496
United Parcel Service, Inc.–Class B		8,531		624,384
				1,036,451
Airlines–0.06%
Southwest Airlines Co.		6,894		59,013
Aluminum–0.08%
Alcoa Inc.		9,469		81,907
Apparel Retail–0.52%
Abercrombie & Fitch Co.–Class A		764		37,314
Gap, Inc. (The)		3,079		57,115
Limited Brands, Inc.		2,178		87,882
Ross Stores, Inc.		2,034		96,676
TJX Cos., Inc.		3,352		216,372
Urban Outfitters, Inc.(b)		963		26,540
				521,899
Apparel, Accessories & Luxury Goods–0.33%
Coach, Inc.		2,584		157,727
Polo Ralph Lauren Corp.		569		78,568
VF Corp.		771		97,909
				334,204
Application Software–0.54%
Adobe Systems Inc.(b)		4,326		122,296
Autodesk, Inc.(b)		2,013		61,054
Citrix Systems, Inc.(b)		1,656		100,552
Intuit Inc.		2,632		138,417
Salesforce.com, Inc.(b)		1,203		122,057
				544,376
Asset Management & Custody Banks–1.10%
Ameriprise Financial, Inc.		2,002		99,379
Bank of New York Mellon Corp. (The)		10,738		213,794
BlackRock, Inc.		882		157,208
Federated Investors, Inc.–Class B		860		13,029
Franklin Resources, Inc.		1,280		122,957
Invesco Ltd.(c)		4,033		81,023
Legg Mason, Inc.		1,094		26,311
Northern Trust Corp.		2,120		84,079
State Street Corp.		4,356		175,590
T. Rowe Price Group Inc.		2,255		128,422
				1,101,792
Auto Parts & Equipment–0.25%
BorgWarner, Inc.(b)		971		61,892
Johnson Controls, Inc.		6,024		188,310
				250,202
Automobile Manufacturers–0.36%
Ford Motor Co.		33,652		362,095
Automotive Retail–0.25%
AutoNation, Inc.(b)		436		16,075
AutoZone, Inc.(b)		247		80,268
CarMax, Inc.(b)		1,990		60,655
O’Reilly Automotive, Inc.(b)		1,127		90,104
				247,102
Biotechnology–1.22%
Amgen Inc.		7,024		451,011
Biogen Idec Inc.(b)		2,151		236,718

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)
Celgene Corp.(b)		3,930	$	265,668
Gilead Sciences, Inc.(b)		6,651		272,225
				1,225,622
Brewers–0.06%
Molson Coors Brewing Co.–Class B		1,394		60,695
Broadcasting–0.29%
CBS Corp.–Class B		5,794		157,249
Discovery Communications, Inc.–Class A(b)		2,340		95,870
Scripps Networks Interactive–Class A		868		36,820
				289,939
Building Products–0.03%
Masco Corp.		3,174		33,263
Cable & Satellite–1.04%
Cablevision Systems Corp.–Class A		1,940		27,587
Comcast Corp.–Class A		24,094		571,269
DIRECTV–Class A(b)		6,247		267,121
Time Warner Cable Inc.		2,825		179,585
				1,045,562
Casinos & Gaming–0.12%
International Game Technology		2,635		45,322
Wynn Resorts Ltd.		703		77,674
				122,996
Coal & Consumable Fuels–0.19%
Alpha Natural Resources, Inc.(b)		1,964		40,124
CONSOL Energy Inc.		1,994		73,180
Peabody Energy Corp.		2,398		79,398
				192,702
Commercial Printing–0.02%
R. R. Donnelley & Sons Co.		1,660		23,954
Communications Equipment–2.11%
Cisco Systems, Inc.		47,607		860,735
F5 Networks, Inc.(b)		710		75,345
Harris Corp.		1,025		36,941
JDS Uniphase Corp.(b)		1,980		20,671
Juniper Networks, Inc.(b)		4,684		95,601
Motorola Mobility Holdings Inc.(b)		2,334		90,559
Motorola Solutions, Inc.		2,520		116,651
QUALCOMM, Inc.		14,889		814,428
				2,110,931
Computer & Electronics Retail–0.09%
Best Buy Co., Inc.		2,564		59,921
GameStop Corp.–Class A(b)		1,218		29,390
				89,311
Computer Hardware–3.97%
Apple Inc.(b)		8,229		3,332,745
Dell Inc.(b)		13,522		197,827
Hewlett-Packard Co.		17,596		453,273
				3,983,845
Computer Storage & Peripherals–0.69%
EMC Corp.(b)		18,065		389,120
Lexmark International, Inc.–Class A		658		21,760
NetApp, Inc.(b)		3,175		115,157
SanDisk Corp.(b)		2,128		104,719
Western Digital Corp.(b)		2,051		63,479
				694,235
Construction & Engineering–0.16%
Fluor Corp.		1,501		75,425
Jacobs Engineering Group, Inc.(b)		1,122		45,531
Quanta Services, Inc.(b)		1,816		39,117
				160,073
Construction & Farm Machinery & Heavy Trucks–1.14%
Caterpillar Inc.		5,725		518,685
Cummins Inc.		1,713		150,778
Deere & Co.		3,664		283,411
Joy Global Inc.		924		69,272
PACCAR Inc.		3,171		118,817
				1,140,963
Construction Materials–0.05%
Vulcan Materials Co.		1,136		44,702
Consumer Electronics–0.02%
Harman International Industries, Inc.		640		24,346
Consumer Finance–0.77%
American Express Co.		8,948		422,077
Capital One Financial Corp.		4,069		172,078
Discover Financial Services		4,892		117,408
SLM Corp.		4,513		60,474
				772,037
Data Processing & Outsourced Services–1.41%
Automatic Data Processing, Inc.		4,309		232,729
Computer Sciences Corp.		1,394		33,038
Fidelity National Information Services, Inc.		2,154		57,275
Fiserv, Inc.(b)		1,245		73,131

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)
MasterCard, Inc.–Class A		943	$	351,569
Paychex, Inc.		2,835		85,362
Total System Services, Inc.		1,389		27,169
Visa Inc.–Class A		4,501		456,986
Western Union Co. (The)		5,523		100,850
				1,418,109
Department Stores–0.36%
JC Penney Co., Inc.		1,257		44,184
Kohl’s Corp.		2,244		110,742
Macy’s, Inc.		3,717		119,613
Nordstrom, Inc.		1,440		71,582
Sears Holdings Corp.(b)		344		10,932
				357,053
Distillers & Vintners–0.17%
Beam, Inc.		1,359		69,622
Brown-Forman Corp.–Class B		887		71,412
Constellation Brands, Inc.–Class A(b)		1,495		30,902
				171,936
Distributors–0.08%
Genuine Parts Co.		1,379		84,395
Diversified Banks–1.79%
Comerica Inc.		1,768		45,615
U.S. Bancorp		16,905		457,280
Wells Fargo & Co.(b)		46,700		1,287,052
				1,789,947
Diversified Chemicals–0.89%
Dow Chemical Co. (The)		10,499		301,951
E. I. du Pont de Nemours and Co.		8,181		374,526
Eastman Chemical Co.		1,235		48,239
FMC Corp.		630		54,205
PPG Industries, Inc.		1,366		114,048
				892,969
Diversified Metals & Mining–0.32%
Freeport-McMoRan Copper & Gold Inc.		8,393		308,778
Titanium Metals Corp.		705		10,561
				319,339
Diversified REIT’s–0.12%
Vornado Realty Trust		1,622		124,667
Diversified Support Services–0.09%
Cintas Corp.		981		34,149
Iron Mountain Inc.		1,643		50,604
				84,753
Drug Retail–0.73%
CVS Caremark Corp.		11,526		470,030
Walgreen Co.		7,868		260,116
				730,146
Education Services–0.08%
Apollo Group, Inc.–Class A(b)		1,022		55,055
DeVry, Inc.		564		21,692
				76,747
Electric Utilities–2.10%
American Electric Power Co., Inc.		4,276		176,642
Duke Energy Corp.		11,825		260,150
Edison International		2,866		118,652
Entergy Corp.		1,555		113,593
Exelon Corp.		5,870		254,582
FirstEnergy Corp.		3,680		163,024
NextEra Energy, Inc.		3,741		227,752
Northeast Utilities		1,556		56,125
Pepco Holdings, Inc.		1,963		39,849
Pinnacle West Capital Corp.		959		46,205
PPL Corp.		5,120		150,630
Progress Energy, Inc.		2,612		146,324
Southern Co. (The)		7,650		354,118
				2,107,646
Electrical Components & Equipment–0.54%
Cooper Industries PLC (Ireland)		1,382		74,835
Emerson Electric Co.		6,515		303,534
Rockwell Automation, Inc.		1,260		92,446
Roper Industries, Inc.		845		73,405
				544,220
Electronic Components–0.25%
Amphenol Corp.–Class A		1,467		66,587
Corning Inc.		13,933		180,850
				247,437
Electronic Equipment & Instruments–0.04%
FLIR Systems, Inc.		1,380		34,597

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
Electronic Manufacturing Services–0.18%
Jabil Circuit, Inc.		1,631	$	32,066
Molex Inc.		1,213		28,942
TE Connectivity Ltd.		3,758		115,784
				176,792
Environmental & Facilities Services–0.27%
Republic Services, Inc.		2,815		77,553
Stericycle, Inc.(b)		757		58,986
Waste Management, Inc.		4,075		133,293
				269,832
Fertilizers & Agricultural Chemicals–0.55%
CF Industries Holdings, Inc.		575		83,363
Monsanto Co.		4,741		332,202
Mosaic Co. (The)		2,619		132,076
				547,641
Food Distributors–0.15%
Sysco Corp.		5,215		152,956
Food Retail–0.31%
Kroger Co. (The)		5,324		128,947
Safeway Inc.		3,007		63,267
SUPERVALU Inc.		1,831		14,868
Whole Foods Market, Inc.		1,414		98,386
				305,468
Footwear–0.32%
NIKE, Inc.–Class B		3,284		316,479
Gas Utilities–0.12%
AGL Resources Inc.		1,025		43,316
ONEOK, Inc.		910		78,888
				122,204
General Merchandise Stores–0.47%
Big Lots, Inc.(b)		587		22,165
Dollar Tree, Inc.(b)		1,053		87,515
Family Dollar Stores, Inc.		1,039		59,909
Target Corp.		5,941		304,298
				473,887
Gold–0.26%
Newmont Mining Corp.		4,381		262,904
Health Care Distributors–0.40%
AmerisourceBergen Corp.		2,269		84,384
Cardinal Health, Inc.		3,059		124,226
McKesson Corp.		2,167		168,831
Patterson Cos. Inc.		839		24,767
				402,208
Health Care Equipment–1.74%
Baxter International Inc.		5,000		247,400
Becton, Dickinson and Co.		1,913		142,939
Boston Scientific Corp.(b)		13,119		70,055
C.R. Bard, Inc.		762		65,151
CareFusion Corp.(b)		1,988		50,515
Covidien PLC (Ireland)		4,272		192,283
Edwards Lifesciences Corp.(b)		1,011		71,478
Intuitive Surgical, Inc.(b)		343		158,812
Medtronic, Inc.		9,345		357,446
St. Jude Medical, Inc.		2,799		96,006
Stryker Corp.		2,880		143,165
Varian Medical Systems, Inc.(b)		996		66,862
Zimmer Holdings, Inc.		1,576		84,190
				1,746,302
Health Care Facilities–0.02%
Tenet Healthcare Corp.(b)		3,881		19,909
Health Care Services–0.60%
DaVita, Inc.(b)		821		62,240
Express Scripts, Inc.(b)		4,308		192,524
Laboratory Corp. of America Holdings(b)		877		75,396
Medco Health Solutions, Inc.(b)		3,427		191,569
Quest Diagnostics Inc.		1,392		80,820
				602,549
Health Care Supplies–0.04%
DENTSPLY International Inc.		1,243		43,493
Health Care Technology–0.08%
Cerner Corp.(b)		1,279		78,339
Home Entertainment Software–0.06%
Electronic Arts Inc.(b)		2,941		60,585
Home Furnishings–0.03%
Leggett & Platt, Inc.		1,266		29,169
Home Improvement Retail–0.85%
Home Depot, Inc. (The)		13,651		573,888
Lowe’s Cos., Inc.		11,093		281,540
Orchard Supply Hardware Stores Corp.–Class A(b)		15		110
				855,538
Homebuilding–0.08%
D.R. Horton, Inc.		2,492		31,424
Lennar Corp.–Class A		1,389		27,294
PulteGroup Inc.(b)		3,021		19,062
				77,780

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
Homefurnishing Retail–0.12%
Bed Bath & Beyond Inc.(b)		2,126	$	123,244
Hotels, Resorts & Cruise Lines–0.33%
Carnival Corp.		4,006		130,756
Marriott International Inc.–Class A		2,408		70,241
Starwood Hotels & Resorts Worldwide, Inc.		1,690		81,069
Wyndham Worldwide Corp.		1,342		50,768
				332,834
Household Appliances–0.03%
Whirlpool Corp.		672		31,886
Household Products–2.35%
Clorox Co. (The)		1,156		76,943
Colgate-Palmolive Co.		4,281		395,522
Kimberly-Clark Corp.		3,489		256,651
Procter & Gamble Co. (The)		24,364		1,625,322
				2,354,438
Housewares & Specialties–0.04%
Newell Rubbermaid Inc.		2,588		41,796
Human Resource & Employment Services–0.04%
Robert Half International, Inc.		1,289		36,685
Hypermarkets & Super Centers–1.24%
Costco Wholesale Corp.		3,837		319,699
Wal-Mart Stores, Inc.		15,469		924,427
				1,244,126
Independent Power Producers & Energy Traders–0.17%
AES Corp. (The)(b)		5,683		67,287
Constellation Energy Group Inc.		1,771		70,255
NRG Energy, Inc.(b)		1,992		36,095
				173,637
Industrial Conglomerates–2.60%
3M Co.		6,205		507,135
Danaher Corp.		5,044		237,270
General Electric Co.(d)		93,494		1,674,477
Tyco International Ltd.		4,086		190,857
				2,609,739
Industrial Gases–0.49%
Air Products & Chemicals, Inc.		1,862		158,624
Airgas, Inc.		598		46,692
Praxair, Inc.		2,658		284,140
				489,456
Industrial Machinery–0.84%
Dover Corp.		1,636		94,970
Eaton Corp.		2,959		128,805
Flowserve Corp.		490		48,667
Illinois Tool Works Inc.		4,279		199,872
Ingersoll-Rand PLC (Ireland)		2,746		83,671
Pall Corp.		1,023		58,464
Parker Hannifin Corp.		1,337		101,946
Snap-on Inc.		521		26,373
Stanley Black & Decker Inc.		1,481		100,116
				842,884
Industrial REIT’s–0.12%
Prologis, Inc.		4,022		114,989
Insurance Brokers–0.28%
Aon Corp.		2,874		134,503
Marsh & McLennan Cos., Inc.		4,765		150,669
				285,172
Integrated Oil & Gas–7.23%
Chevron Corp.		17,627		1,875,513
ConocoPhillips		11,757		856,733
Exxon Mobil Corp.		42,446		3,597,723
Hess Corp.		2,638		149,838
Murphy Oil Corp.		1,702		94,869
Occidental Petroleum Corp.		7,188		673,516
				7,248,192
Integrated Telecommunication Services–2.90%
AT&T Inc.		52,479		1,586,965
CenturyLink Inc.		5,468		203,410
Frontier Communications Corp.		8,862		45,639
Verizon Communications Inc.		25,070		1,005,809
Windstream Corp.		5,160		60,578
				2,902,401
Internet Retail–0.84%
Amazon.com, Inc.(b)		3,221		557,555
Expedia Inc.		839		24,348
Netflix Inc.(b)		490		33,952
Priceline.com Inc.(b)		440		205,793
TripAdvisor Inc.(b)		839		21,151
				842,799
Internet Software & Services–2.03%
Akamai Technologies, Inc.(b)		1,622		52,358
eBay Inc.(b)		10,198		309,305
Google Inc.–Class A(b)		2,237		1,444,878

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
Internet Software & Services–(continued)
VeriSign, Inc.		1,408	$	50,294
Yahoo! Inc.(b)		10,983		177,156
				2,033,991
Investment Banking & Brokerage–0.72%
Charles Schwab Corp. (The)		9,589		107,972
E*TRADE Financial Corp.(b)		2,290		18,229
Goldman Sachs Group, Inc. (The)		4,351		393,461
Morgan Stanley		13,170		199,262
				718,924
IT Consulting & Other Services–2.49%
Accenture PLC–Class A (Ireland)		5,670		301,814
Cognizant Technology Solutions Corp.–Class A(b)		2,671		171,772
International Business Machines Corp.		10,436		1,918,972
SAIC, Inc.(b)		2,466		30,307
Teradata Corp.(b)		1,480		71,795
				2,494,660
Leisure Products–0.12%
Hasbro, Inc.		1,027		32,751
Mattel, Inc.		3,016		83,724
				116,475
Life & Health Insurance–0.89%
Aflac, Inc.		4,111		177,842
Lincoln National Corp.		2,625		50,978
MetLife, Inc.		9,365		292,001
Principal Financial Group, Inc.		2,702		66,469
Prudential Financial, Inc.		4,176		209,301
Torchmark Corp.		924		40,092
Unum Group		2,557		53,876
				890,559
Life Sciences Tools & Services–0.40%
Agilent Technologies, Inc.(b)		3,054		106,677
Life Technologies Corp.(b)		1,587		61,750
PerkinElmer, Inc.		1,005		20,100
Thermo Fisher Scientific, Inc.(b)		3,360		151,099
Waters Corp.(b)		803		59,462
				399,088
Managed Health Care–1.09%
Aetna Inc.		3,207		135,303
CIGNA Corp.		2,511		105,462
Coventry Health Care, Inc.(b)		1,277		38,783
Humana Inc.		1,447		126,772
UnitedHealth Group Inc.		9,440		478,419
WellPoint, Inc.		3,073		203,586
				1,088,325
Metal & Glass Containers–0.08%
Ball Corp.		1,438		51,351
Owens-Illinois, Inc.(b)		1,415		27,423
				78,774
Motorcycle Manufacturers–0.08%
Harley-Davidson, Inc.		2,080		80,850
Movies & Entertainment–1.48%
News Corp.–Class A		19,420		346,453
Time Warner Inc.		8,863		320,309
Viacom Inc.–Class B		4,890		222,055
Walt Disney Co. (The)		15,909		596,587
				1,485,404
Multi-Line Insurance–0.32%
American International Group, Inc.(b)		3,904		90,573
Assurant, Inc.		815		33,464
Genworth Financial Inc.–Class A(b)		4,297		28,145
Hartford Financial Services Group, Inc.		3,983		64,724
Loews Corp.		2,703		101,768
				318,674
Multi-Sector Holdings–0.04%
Leucadia National Corp.		1,760		40,022
Multi-Utilities–1.48%
Ameren Corp.		2,126		70,434
CenterPoint Energy, Inc.		3,800		76,342
CMS Energy Corp.		2,193		48,421
Consolidated Edison, Inc.		2,593		160,844
Dominion Resources, Inc.		5,044		267,736
DTE Energy Co.		1,489		81,076
Integrys Energy Group, Inc.		685		37,113
NiSource Inc.		2,503		59,596
PG&E Corp.		3,593		148,104
Public Service Enterprise Group Inc.		4,480		147,885
SCANA Corp.		1,010		45,511
Sempra Energy		2,107		115,885
TECO Energy, Inc.		1,951		37,342
Wisconsin Energy Corp.		2,056		71,878
Xcel Energy, Inc.		4,294		118,686
				1,486,853

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
Office Electronics–0.10%
Xerox Corp.		12,251	$	97,518
Office REIT’s–0.13%
Boston Properties, Inc.		1,306		130,078
Office Services & Supplies–0.06%
Avery Dennison Corp.		931		26,701
Pitney Bowes Inc.		1,775		32,909
				59,610
Oil & Gas Drilling–0.23%
Diamond Offshore Drilling, Inc.		611		33,764
Helmerich & Payne, Inc.		942		54,975
Nabors Industries Ltd.(b)		2,534		43,940
Noble Corp.(b)		2,220		67,088
Rowan Cos., Inc.(b)		1,121		34,000
				233,767
Oil & Gas Equipment & Services–1.75%
Baker Hughes Inc.		3,864		187,945
Cameron International Corp.(b)		2,156		106,054
FMC Technologies, Inc.(b)		2,113		110,362
Halliburton Co.		8,148		281,188
National Oilwell Varco Inc.		3,752		255,098
Schlumberger Ltd.		11,875		811,181
				1,751,828
Oil & Gas Exploration & Production–2.12%
Anadarko Petroleum Corp.		4,409		336,539
Apache Corp.		3,400		307,972
Cabot Oil & Gas Corp.		919		69,752
Chesapeake Energy Corp.		5,815		129,616
Denbury Resources Inc.(b)		3,487		52,654
Devon Energy Corp.		3,565		221,030
EOG Resources, Inc.		2,380		234,454
EQT Corp.		1,314		71,994
Marathon Oil Corp.		6,231		182,381
Newfield Exploration Co.(b)		1,164		43,918
Noble Energy, Inc.		1,553		146,588
Pioneer Natural Resources Co.		1,083		96,907
QEP Resources Inc.		1,556		45,591
Range Resources Corp.		1,384		85,725
Southwestern Energy Co.(b)		3,061		97,768
				2,122,889
Oil & Gas Refining & Marketing–0.28%
Marathon Petroleum Corp.		3,136		104,397
Sunoco, Inc.		969		39,748
Tesoro Corp.(b)		1,286		30,041
Valero Energy Corp.		4,934		103,861
				278,047
Oil & Gas Storage & Transportation–0.53%
El Paso Corp.		6,829		181,447
Spectra Energy Corp.		5,758		177,058
Williams Cos., Inc. (The)		5,219		172,331
				530,836
Other Diversified Financial Services–2.29%
Bank of America Corp.		89,761		499,071
Citigroup Inc.		25,891		681,192
JPMorgan Chase & Co.		33,649		1,118,830
				2,299,093
Packaged Foods & Meats–1.77%
Campbell Soup Co.		1,581		52,552
ConAgra Foods, Inc.		3,648		96,307
Dean Foods Co.(b)		1,670		18,704
General Mills, Inc.		5,689		229,893
H.J. Heinz Co.		2,824		152,609
Hershey Co. (The)		1,360		84,021
Hormel Foods Corp.		1,222		35,792
J M Smucker Co. (The)		1,001		78,248
Kellogg Co.		2,197		111,102
Kraft Foods Inc.–Class A		15,649		584,647
McCormick & Co., Inc.		1,163		58,638
Mead Johnson Nutrition Co.		1,794		123,302
Sara Lee Corp.		5,181		98,025
Tyson Foods, Inc.–Class A		2,586		53,375
				1,777,215
Paper Packaging–0.05%
Bemis Co., Inc.		928		27,914
Sealed Air Corp.		1,401		24,111
				52,025
Paper Products–0.16%
International Paper Co.		3,846		113,842
MeadWestvaco Corp.		1,535		45,973
				159,815
Personal Products–0.18%
Avon Products, Inc.		3,848		67,225
Estee Lauder Cos. Inc. (The)–Class A		994		111,646
				178,871

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–6.32%
Abbott Laboratories		13,805	$	776,255
Allergan, Inc.		2,705		237,337
Bristol-Myers Squibb Co.		15,010		528,952
Eli Lilly & Co.		9,022		374,954
Forest Laboratories, Inc.(b)		2,365		71,565
Hospira, Inc.(b)		1,450		44,037
Johnson & Johnson		24,183		1,585,921
Merck & Co., Inc.		26,991		1,017,561
Mylan Inc.(b)		3,807		81,698
Perrigo Co.		824		80,175
Pfizer Inc.		68,074		1,473,121
Watson Pharmaceuticals, Inc.(b)		1,125		67,883
				6,339,459
Property & Casualty Insurance–2.11%
ACE Ltd. (Switzerland)		2,973		208,467
Allstate Corp. (The)		4,475		122,660
Berkshire Hathaway Inc.–Class B(b)		15,576		1,188,449
Chubb Corp. (The)		2,462		170,420
Cincinnati Financial Corp.		1,431		43,588
Progressive Corp. (The)		5,460		106,524
Travelers Cos., Inc. (The)		3,654		216,207
XL Group PLC (Ireland)		2,805		55,455
				2,111,770
Publishing–0.16%
Gannett Co., Inc.		2,139		28,598
McGraw-Hill Cos., Inc. (The)		2,598		116,832
Washington Post Co. (The)–Class B		43		16,203
				161,633
Railroads–0.86%
CSX Corp.		9,297		195,795
Norfolk Southern Corp.		2,976		216,831
Union Pacific Corp.		4,278		453,211
				865,837
Real Estate Services–0.04%
CBRE Group, Inc.–Class A(b)		2,879		43,818
Regional Banks–0.89%
BB&T Corp.		6,133		154,367
Fifth Third Bancorp		8,094		102,956
First Horizon National Corp.		2,326		18,608
Huntington Bancshares Inc.		7,700		42,273
KeyCorp		8,385		64,481
M&T Bank Corp.		1,105		84,356
PNC Financial Services Group, Inc.		4,658		268,627
Regions Financial Corp.		11,183		48,087
SunTrust Banks, Inc.		4,720		83,544
Zions Bancorp.		1,665		27,106
				894,405
Research & Consulting Services–0.07%
Dun & Bradstreet Corp. (The)		440		32,925
Equifax Inc.		1,077		41,723
				74,648
Residential REIT’s–0.28%
Apartment Investment & Management Co.–Class A		1,040		23,826
AvalonBay Communities, Inc.		841		109,835
Equity Residential		2,608		148,734
				282,395
Restaurants–1.60%
Chipotle Mexican Grill, Inc.(b)		275		92,878
Darden Restaurants, Inc.		1,184		53,967
McDonald’s Corp.		9,061		909,090
Starbucks Corp.		6,601		303,712
Yum! Brands, Inc.		4,087		241,174
				1,600,821
Retail REIT’s–0.39%
Kimco Realty Corp.		3,581		58,155
Simon Property Group, Inc.		2,601		335,373
				393,528
Semiconductor Equipment–0.24%
Applied Materials, Inc.		11,595		124,182
KLA-Tencor Corp.		1,469		70,879
Novellus Systems, Inc.(b)		589		24,320
Teradyne, Inc.(b)		1,649		22,476
				241,857
Semiconductors–2.11%
Advanced Micro Devices, Inc.(b)		5,212		28,145
Altera Corp.		2,850		105,735
Analog Devices, Inc.		2,634		94,245
Broadcom Corp.–Class A(b)		4,314		126,659
First Solar, Inc.(b)		526		17,758
Intel Corp.		45,093		1,093,505
Linear Technology Corp.		2,016		60,540
LSI Corp.(b)		4,941		29,399
Microchip Technology Inc.		1,676		61,392
Micron Technology, Inc.(b)		8,735		54,943
NVIDIA Corp.(b)		5,414		75,038

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
Semiconductors–(continued)

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)
Money Market Funds–0.30%
Liquid Assets Portfolio–Institutional Class(e)		151,832	$	151,832
Premier Portfolio–Institutional Class(e)		151,831		151,831
Total Money Market Funds (Cost $303,663)				303,663
TOTAL INVESTMENTS–100.79% (Cost $64,284,089)				101,061,518
OTHER ASSETS LESS LIABILITIES–(0.79)%				(795,060	)
NET ASSETS–100.00%			$	100,266,458

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)	Affiliated company during the period. 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 a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1I and Note 5.
(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. S&P 500 Index Fund

Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $63,879,090)	$	100,676,832
Investments in affiliates, at value (Cost $404,999)		384,686
Total investments, at value (Cost $64,284,089)		101,061,518
Receivable for:
Investments sold		15,676
Dividends		152,721
Investment for trustee deferred compensation and retirement plans		5,462
Other assets		3,148
Total assets		101,238,525
Liabilities:
Payable for:
Fund shares reacquired		451,553
Variation margin		1,625
Accrued fees to affiliates		463,987
Accrued other operating expenses		40,494
Trustee deferred compensation and retirement plans		14,408
Total liabilities		972,067
Net assets applicable to shares outstanding	$	100,266,458
Net assets consist of:
Shares of beneficial interest	$	81,765,264
Undistributed net investment income		1,876,324
Undistributed net realized gain (loss)		(20,153,005	)
Unrealized appreciation		36,777,875
	$	100,266,458
Net Assets:
Series I	$	32,888,733
Series II	$	67,377,725
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		2,893,884
Series II		5,961,057
Series I:
Net asset value per share	$	11.36
Series II:
Net asset value per share	$	11.30

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends	$	2,403,133
Dividends from affiliates		3,288
Total investment income		2,406,421
Expenses:
Advisory fees		137,949
Administrative services fees		72,757
Custodian fees		30,899
Distribution fees — Series II		199,351
Transfer agent fees		3,081
Trustees’ and officers’ fees and benefits		22,922
Professional services fees		36,531
Other		50,898
Total expenses		554,388
Less: Fees waived		(34,517	)
Net expenses		519,871
Net investment income		1,886,550
Realized and unrealized gain from:
Net realized gain from:
Investment securities		5,309,625
Futures contracts		101,672
		5,411,297
Change in net unrealized appreciation (depreciation) of:
Investment securities		(5,201,474	)
Futures contracts		(12,936	)
		(5,214,410	)
Net realized and unrealized gain		196,887
Net increase in net assets resulting from operations	$	2,083,437

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, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	1,886,550		$	1,995,988
Net realized gain		5,411,297			800,753
Change in net unrealized appreciation (depreciation)		(5,214,410	)		14,020,170
Net increase in net assets resulting from operations		2,083,437			16,816,911
Distributions to shareholders from net investment income:
Series I		(682,191	)		(728,755	)
Series II		(1,324,615	)		(1,463,002	)
Total distributions from net investment income		(2,006,806	)		(2,191,757	)
Share transactions–net:
Series I		(4,815,112	)		(5,557,429	)
Series II		(21,052,946	)		(13,397,694	)
Net increase (decrease) in net assets resulting from share transactions		(25,868,058	)		(18,955,123	)
Net increase (decrease) in net assets		(25,791,427	)		(4,329,969	)
Net assets:
Beginning of year		126,057,885			130,387,854
End of year (includes undistributed net investment income of $1,876,324 and $2,009,166, respectively)	$	100,266,458		$	126,057,885

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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 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 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. S&P 500 Index 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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. S&P 500 Index 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.	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 Daily Net Assets	Rate
First $2 billion		0	.12%
Over $2 billion		0	.10%

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

  The Adviser has contractually agreed, through at least June 30, 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 0.28% and Series II shares to 0.53% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless 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.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $34,517.

  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, 2011, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $22,757 for services provided by insurance companies.

Invesco V.I. S&P 500 Index 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. For the year ended December 31, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, Invesco Ltd., 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, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	101,061,408	$	110	$	0	$	101,061,518
Futures*		446		—		—		446
Total Investments	$	101,061,854	$	110	$	0	$	101,061,964

*  Unrealized appreciation.

NOTE 4—Investments in Affiliates

The Fund’s Adviser is a subsidiary of Invesco Ltd. and therefore, Invesco Ltd. is considered to be affiliated with the Fund. The following is a summary of the transactions in and earnings from investments in Invesco Ltd. for the year ended December 31, 2011.

Change in

Unrealized

Value

Purchases

Proceeds

Appreciation

Realized

Value

Dividend

12/31/10

at Cost

from Sales

(Depreciation)

Gain (Loss)

12/31/11

Income

Invesco Ltd.

$120,733

$4,293

$(26,075

)

$(13,420

)

$(4,508

)

$81,023

$2,157

Invesco V.I. S&P 500 Index Fund

NOTE 5—Derivative Investments

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, 2011:

	Value
Risk Exposure/Derivative Type	Assets		Liabilities
Interest rate risk
Futures contracts(a)	$	853	$	(407	)

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

Effect of Derivative Instruments for the year ended December 31, 2011

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	$	101,672
Change in Unrealized Appreciation (Depreciation)
Interest rate risk		(12,936	)
Total	$	88,736

*  The average notional value of futures outstanding during the period was $1,332,036.

Open Futures Contracts
	Number of		Expiration		Notional		Unrealized
Long Contracts	Contracts		Month		Value		Appreciation
E-Mini S&P 500 Index		7		March-2012	$	438,410	$	446

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, 2011, the Fund paid legal fees of $1,271 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010:

	2011		2010
Ordinary income	$	2,006,806	$	2,191,757

Invesco V.I. S&P 500 Index Fund

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	1,858,926
Net unrealized appreciation — investments		31,466,476
Temporary book/tax differences		(8,677	)
Capital loss carryforward		(14,815,531	)
Shares of beneficial interest		81,765,264
Total net assets	$	100,266,458

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund utilized $5,191,243 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, 2011, which expires as follows:

Capital Loss Carryforward
Expiration	Short-Term		Long-Term	Total
December 31, 2013	$	7,984,682	$	$	7,984,682
December 31, 2014		5,449,556			5,449,556
December 31, 2017		1,381,293			1,381,293
Total capital loss carryforward	$	14,815,531	$	$	14,815,531

*  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, 2011 was $4,316,509 and $27,804,421, 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	$	38,210,576
Aggregate unrealized (depreciation) of investment securities		(6,744,100	)
Net unrealized appreciation of investment securities	$	31,466,476
Cost of investments for tax purposes is $69,595,042.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of litigation settlements and Real Estate Income Trust distributions, on December 31, 2011, undistributed net investment income was decreased by $12,586, undistributed net realized gain (loss) was increased by $8,803 and shares of beneficial interest increased by $3,783. 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,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		95,570		$	1,079,344			114,148		$	1,178,964
Series II		170,970			1,951,516			141,688			1,423,360
Issued as reinvestment of dividends:
Series I		66,816			682,191			73,537			728,755
Series II		130,376			1,324,615			148,378			1,463,002
Reacquired:
Series I		(566,020	)		(6,576,647	)		(723,269	)		(7,465,148	)
Series II		(2,129,902	)		(24,329,077	)		(1,577,214	)		(16,284,056	)
Net increase (decrease) in share activity		(2,232,190	)	$	(25,868,058	)		(1,822,732	)	$	(18,955,123	)

^(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 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.

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				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 12/31/11	$	11.42	$	0.21	$	(0.04	)	$	0.17		$	(0.23	)	$	11.36		1.76	%	$	32,889		0.28	%(d)		0.31	%(d)		1.81	%(d)		4	%
Year ended 12/31/10		10.14		0.19		1.29			1.48			(0.20	)		11.42		14.87			37,651		0.28			0.42			1.79			6
Year ended 12/31/09		8.27		0.18		1.94			2.12			(0.25	)		10.14		26.34			38,873		0.28	(e)		0.28	(e)		2.09	(e)		5
Year ended 12/31/08		13.46		0.23		(5.14	)		(4.91	)		(0.28	)		8.27		(37.07	)		33,801		0.30	(e)		0.30	(e)		2.01	(e)		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
Series II
Year ended 12/31/11		11.35		0.18		(0.03	)		0.15			(0.20	)		11.30		1.53			67,378		0.53	(d)		0.56	(d)		1.56	(d)		4
Year ended 12/31/10		10.08		0.16		1.28			1.44			(0.17	)		11.35		14.58			88,407		0.53			0.67			1.54			6
Year ended 12/31/09		8.21		0.16		1.93			2.09			(0.22	)		10.08		26.06			91,515		0.53	(e)		0.53	(e)		1.84	(e)		5
Year ended 12/31/08		13.36		0.20		(5.11	)		(4.91	)		(0.24	)		8.21		(37.27	)		80,115		0.55	(e)		0.55	(e)		1.76	(e)		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

(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 the periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $35,217 and $79,740 for Series I and Series II shares, respectively.
(e)	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%

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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. 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 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	962.00	$	1.38	$	1,023.79	$	1.43		0.28	%
Series II		1,000.00		959.50		2.62		1,022.53		2.70		0.53

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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, 2011:

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. S&P 500 Index Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. S&P 500 Index Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. S&P 500 Index Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. S&P 500 Index Fund

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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-VISDEWSP-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, 2011, Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund performed generally 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.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	-0.36	%
Series II Shares	-0.66
S&P 500 Index▼ (Broad Market Index)	2.09
S&P 500 Equal Weight Indexn (Style-Specific Index)	-0.11
Lipper VUF Multi-Cap Core Funds Index▼ (Peer Group Index)	-1.44

Source(s): ^▼Lipper Inc.; ⁿInvesco, Bloomberg L.P.

As noted in the Fund’s latest semiannual report, the Fund has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.

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, the 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. Changes to the Fund’s portfolio are the result of Standard & Poor’s either adding a security to, or deleting a security from, the S&P 500 Index. Changes are not the result of any stock selection model.

     The Fund also may invest in S&P 500 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

Market volatility persisted throughout the year ended December 31, 2011. A number of factors adversely affected investor sentiment during the year, including sluggish economic growth and persistently high unemployment in the U.S.; political unrest in the Middle East and northern Africa; and the reemergence of sovereign debt concerns in Greece and other eurozone countries. Following the earthquake and tsunami that struck Japan in March – which caused loss of life, a disruption in the supply chain and fears of a nuclear catastrophe – many market watchers were surprised that global markets merely stalled, rather than declined significantly.

     During the second half of the year, the debate on raising the U.S. debt ceiling began, and investor sentiment changed from complacency to concern. The president and Congress eventually reached an agreement to raise the debt ceiling and prevent a federal government default, but not before much political wrangling that left investors unsettled. Following the agreement, Standard & Poor’s issued its first-ever downgrade of long-term U.S. government debt. This caused the U.S. stock market to fall precipitously from its early-July highs.

     The U.S. stock market enjoyed a rally at the end of the reporting period as a full-blown financial contagion emanating from Europe did not materialize. Once eurozone leaders announced plans to more aggressively manage their sovereign debt problems, investors refocused their attention on investment opportunities in the U.S. Economic news at home was positive on balance and supportive of the stock market rally. Unemployment continued to inch lower, inflation remained tame as commodity prices slipped and consumer confidence and spending both increased despite a continued decline in home prices. The Federal Reserve continued to support the recovery by keeping short-term interest rates in a range of zero to 0.25% and by indicating no increase is likely until at least mid-2013.¹

     On the geopolitical front, the war in Iraq officially ended in December. However, sovereign debt troubles in Europe continued to act as an overhang for the markets. In addition, a slowdown in global demand from China as its economy cooled was also a concern. Lastly, the U.S. debt burden still lingered given the failure of the congressional “super committee” to agree to long-term spending cuts. Despite these issues, the U.S. stock market remained resilient.

Portfolio Composition

By sector

Consumer Discretionary	16.2	%
Financials	15.8
Information Technology	13.8
Industrials	12.2
Health Care	10.5
Energy	8.6
Consumer Staples	8.4
Utilities	6.6
Materials	6.2
Telecommunication Services	1.6
Money Market Funds Plus Other
Assets Less Liabilities	0.1

Top 10 Equity Holdings*

1.	Akamai Technologies, Inc.	0.2	%
2.	Tenet Healthcare Corp.	0.2
3.	Masco Corp.	0.2
4.	Cintas Corp.	0.2
5.	DeVry, Inc.	0.2
6.	Zimmer Holdings, Inc.	0.2
7.	Weyerhaeuser Co.	0.2
8.	Cablevision Systems Corp.-Class A	0.2
9.	CF Industries Holdings, Inc.	0.2
10.	Juniper Networks, Inc.	0.2

Top Five Industries

1.	Multi-Utilities	3.0	%
2.	Oil & Gas Exploration & Production	3.0
3.	Packaged Foods & Meats	2.8
4.	Health Care Equipment	2.7
5.	Semiconductors	2.6

Total Net Assets	$77.5 million
Total Number of Holdings*		501

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 Equally-Weighted S&P 500 Fund

     Major equity indexes delivered mixed performances, with the S&P 500 Index generating a positive return for the year. For the year, large-cap stocks generally outperformed small-cap stocks, and growth stocks, generally edged value stocks.

     The Fund stayed true to its process by maintaining balanced exposure to all constituents of the S&P 500. On an absolute basis, the Fund posted negative returns for the reporting period. Sectors that contributed the most to overall Fund performance were the consumer discretionary, consumer staples, health care and utilities sectors. In addition, the Fund’s allocation to Equally Weighted S&P 500 futures contracts contributed to Fund performance. The financials, information technology and materials sectors contributed the least to the Fund’s overall performance.

     In the energy sector, El Paso and Cabot Oil & Gas were top contributors. El Paso operates in the natural gas transmission and exploration and production industries, while Cabot Oil & Gas is engaged in the development, exploitation and exploration of oil and gas properties.

     Also contributing to Fund performance were health care companies Intuitive Surgical and Biogen Idec. Intuitive Surgical designs, manufactures and markets da Vinci Surgical Systems, which are used to perform surgeries across multiple surgical specialties, including urology, gynecology, cardiothoracic surgery, transoral surgery and general surgery.

     Detracting from Fund performance were solar panel developers First Solar and MEMC Electronic Materials. During the year, First Solar announced job cuts, saying profits would be below Wall Street forecasts. MEMC Electronic Materials said it would cut staff and idle some facilities. At the heart of the downturn in the solar panel industry is a global glut of panels and huge excess production capacity that drove down prices by more than 40 percent in 2011.2 We sold our holdings in MEMC Electronic Materials before the close of the reporting period.

     At the close of 2011, many of the issues that plagued markets during the year remained unresolved – and seemed likely to contribute to continued high levels of volatility. In Europe, the sovereign debt crisis showed no signs of abating and appeared to have pushed economies in the region back into recession. While economic data thus far remained more resilient in the U.S., overall growth has clearly slowed across developed and emerging markets. That said, at the end of 2011, corporate balance sheets remained generally healthy and market valuations were attractive from a historical context.

     We would like to caution investors against making investment decisions based on short-term performance.

     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	Source: U.S. Federal Reserve
2	Source: Reuters

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.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. 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. 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. Select Dimensions Equally-Weighted S&P 500 Fund. She joined Invesco in 1988. Ms. Unflat graduated magna cum laude from Queens College, where she earned a B.A. in economics. She earned an M.B.A. in finance from St. John’s University.

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class(es)

Fund and index data from 12/31/01*

* During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

     As noted earlier in this report, the Fund

has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer

group market measures. These additional benchmarks will now be included in the chart above.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (11/9/94)			9.37	%
	10	Years	6.01
	5	Years	1.34
	1	Year	-0.36
Series II Shares
Inception (7/24/00)			5.73	%
	10	Years	5.74
	5	Years	1.08
	1	Year	-0.66

Effective June 1, 2010, Class X and Class Y shares of the predecessor fund, Morgan Stanley V.I. Select Dimensions Equally-Weighted S&P 500 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 0.49% 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. 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 Equally-Weighted S&P 500 Fund

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, 2011, 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

Common stock risk. In general, common stock values fluctuate, and sometimes widely fluctuate, in response to activities specific to the company as well as general market, economic and political conditions.

     Depositary receipts risk. 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.

     Derivatives risk. 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. A 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.

     Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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.

     Futures risk. 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.

     Swaps risk. 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. Swaps are subject to credit risk and counterparty risk.

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^® Equal Weight Index is the equally weighted version of the S&P 500^® Index.

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

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

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 Equally-Weighted S&P 500 Fund

Schedule of Investments^(a)

December 31, 2011

	Shares		Value
Common Stocks & Other Equity Interests–99.95%
Advertising–0.42%
Interpublic Group of Cos., Inc. (The)		16,521	$	160,749
Omnicom Group Inc.		3,632		161,915
				322,664
Aerospace & Defense–2.61%
Boeing Co. (The)		2,114		155,062
General Dynamics Corp.		2,375		157,724
Goodrich Corp.		1,223		151,285
Honeywell International Inc.		2,827		153,647
L-3 Communications Holdings, Inc.		2,329		155,298
Lockheed Martin Corp.		1,947		157,512
Northrop Grumman Corp.		2,697		157,720
Precision Castparts Corp.		962		158,528
Raytheon Co.		3,299		159,606
Rockwell Collins, Inc.		2,802		155,147
Textron Inc.		8,427		155,815
United Technologies Corp.		2,073		151,516
Xylem, Inc.		6,087		156,375
				2,025,235
Agricultural Products–0.20%
Archer-Daniels-Midland Co.(b)		5,421		155,041
Air Freight & Logistics–0.79%
C.H. Robinson Worldwide, Inc.		2,260		157,703
Expeditors International of Washington, Inc.		3,719		152,330
FedEx Corp.		1,768		147,646
United Parcel Service, Inc.–Class B		2,092		153,113
				610,792
Airlines–0.19%
Southwest Airlines Co.		17,242		147,592
Aluminum–0.19%
Alcoa Inc.		17,046		147,448
Apparel Retail–1.20%
Abercrombie & Fitch Co.–Class A		3,224		157,460
Gap, Inc. (The)		8,206		152,221
Limited Brands, Inc.		3,910		157,769
Ross Stores, Inc.		3,195		151,858
TJX Cos., Inc.		2,416		155,953
Urban Outfitters, Inc.(c)		5,649		155,687
				930,948
Apparel, Accessories & Luxury Goods–0.59%
Coach, Inc.		2,606		159,070
Polo Ralph Lauren Corp.		1,080		149,127
VF Corp.		1,168		148,324
				456,521
Application Software–0.95%
Adobe Systems Inc.(c)		5,324		150,510
Autodesk, Inc.(c)		4,813		145,978
Citrix Systems, Inc.(c)		2,342		142,206
Intuit Inc.		2,900		152,511
Salesforce.com, Inc.(c)		1,402		142,247
				733,452
Asset Management & Custody Banks–2.00%
Ameriprise Financial, Inc.		3,226		160,139
Bank of New York Mellon Corp. (The)		7,854		156,373
BlackRock, Inc.		881		157,029
Federated Investors, Inc.–Class B		10,195		154,454
Franklin Resources, Inc.		1,595		153,216
Invesco Ltd.(d)		7,805		156,802
Legg Mason, Inc.		6,387		153,607
Northern Trust Corp.		3,852		152,770
State Street Corp.		3,750		151,163
T. Rowe Price Group Inc.		2,764		157,410
				1,552,963
Auto Parts & Equipment–0.41%
BorgWarner, Inc.(c)		2,407		153,422
Johnson Controls, Inc.		5,185		162,083
				315,505
Automobile Manufacturers–0.20%
Ford Motor Co.		14,652		157,656
Automotive Retail–0.78%
AutoNation, Inc.(c)		4,198		154,781
AutoZone, Inc.(c)		458		148,836
CarMax, Inc.(c)		4,946		150,754
O’Reilly Automotive, Inc.(c)		1,879		150,226
				604,597
Biotechnology–0.82%
Amgen Inc.		2,500		160,525
Biogen Idec Inc.(c)		1,361		149,778
Celgene Corp.(c)		2,357		159,333
Gilead Sciences, Inc.(c)		4,041		165,398
				635,034

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

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
Brewers–0.20%
Molson Coors Brewing Co.–Class B		3,521	$	153,304
Broadcasting–0.61%
CBS Corp.–Class B		6,046		164,088
Discovery Communications, Inc.–Class A(c)		3,738		153,146
Scripps Networks Interactive–Class A		3,593		152,415
				469,649
Building Products–0.22%
Masco Corp.		16,395		171,820
Cable & Satellite–0.81%
Cablevision Systems Corp.–Class A		11,779		167,497
Comcast Corp.–Class A		6,437		152,621
DIRECTV–Class A(c)		3,576		152,910
Time Warner Cable Inc.		2,413		153,395
				626,423
Casinos & Gaming–0.41%
International Game Technology		9,565		164,518
Wynn Resorts Ltd.		1,421		157,006
				321,524
Coal & Consumable Fuels–0.59%
Alpha Natural Resources, Inc.(c)		7,654		156,371
CONSOL Energy Inc.		4,134		151,718
Peabody Energy Corp.		4,553		150,750
				458,839
Commercial Printing–0.19%
R. R. Donnelley & Sons Co.		10,465		151,010
Communications Equipment–1.61%
Cisco Systems, Inc.		8,370		151,330
F5 Networks, Inc.(c)		1,432		151,964
Harris Corp.		4,379		157,819
JDS Uniphase Corp.(c)		15,758		164,514
Juniper Networks, Inc.(c)		8,183		167,015
Motorola Mobility Holdings Inc.(c)		3,880		150,544
Motorola Solutions, Inc.		3,253		150,581
QUALCOMM Inc.		2,853		156,059
				1,249,826
Computer & Electronics Retail–0.40%
Best Buy Co., Inc.		6,476		151,344
GameStop Corp.–Class A(c)		6,434		155,253
				306,597
Computer Hardware–0.59%
Apple Inc.(c)		394		159,570
Dell Inc.(c)		9,995		146,227
Hewlett-Packard Co.		5,812		149,717
				455,514
Computer Storage & Peripherals–0.97%
EMC Corp.(c)		6,742		145,223
Lexmark International, Inc.–Class A		4,586		151,659
NetApp, Inc.(c)		4,205		152,515
SanDisk Corp.(c)		3,134		154,224
Western Digital Corp.(c)		4,851		150,139
				753,760
Construction & Engineering–0.60%
Fluor Corp.		3,122		156,881
Jacobs Engineering Group, Inc.(c)		3,772		153,068
Quanta Services, Inc.(c)		7,182		154,700
				464,649
Construction & Farm Machinery & Heavy Trucks–0.99%
Caterpillar Inc.		1,721		155,923
Cummins Inc.		1,719		151,306
Deere & Co.		2,047		158,335
Joy Global Inc.		1,997		149,715
PACCAR Inc.		4,146		155,351
				770,630
Construction Materials–0.20%
Vulcan Materials Co.		3,872		152,363
Consumer Electronics–0.21%
Harman International Industries, Inc.		4,280		162,811
Consumer Finance–0.77%
American Express Co.		3,203		151,085
Capital One Financial Corp.		3,461		146,366
Discover Financial Services		6,198		148,752
SLM Corp.		11,170		149,678
				595,881
Data Processing & Outsourced Services–1.77%
Automatic Data Processing, Inc.		2,892		156,197
Computer Sciences Corp.		5,791		137,247
Fidelity National Information Services, Inc.		5,908		157,094
Fiserv, Inc.(c)		2,614		153,546
MasterCard, Inc.–Class A		414		154,347
Paychex, Inc.		5,074		152,778
Total System Services, Inc.		7,817		152,901
Visa Inc.–Class A		1,540		156,356
Western Union Co.		8,446		154,224
				1,374,690

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

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
Department Stores–0.94%
JC Penney Co., Inc.		4,600	$	161,690
Kohl’s Corp.		3,076		151,801
Macy’s, Inc.		4,839		155,719
Nordstrom, Inc.		3,193		158,724
Sears Holdings Corp.(c)		3,253		103,380
				731,314
Distillers & Vintners–0.61%
Beam, Inc.		3,055		156,508
Brown-Forman Corp.–Class B		1,931		155,465
Constellation Brands, Inc.–Class A(c)		7,689		158,931
				470,904
Distributors–0.20%
Genuine Parts Co.		2,579		157,835
Diversified Banks–0.61%
Comerica Inc.		6,094		157,225
U.S. Bancorp		5,776		156,241
Wells Fargo & Co.(c)		5,780		159,297
				472,763
Diversified Chemicals–1.02%
Dow Chemical Co. (The)		5,696		163,817
E. I. du Pont de Nemours and Co.		3,414		156,293
Eastman Chemical Co.		4,087		159,638
FMC Corp.		1,776		152,807
PPG Industries, Inc.		1,856		154,958
				787,513
Diversified Metals & Mining–0.39%
Freeport-McMoRan Copper & Gold Inc.		4,059		149,331
Titanium Metals Corp.		10,106		151,388
				300,719
Diversified REIT’s–0.20%
Vornado Realty Trust		2,022		155,411
Diversified Support Services–0.42%
Cintas Corp.		4,925		171,439
Iron Mountain Inc.		4,978		153,323
				324,762
Drug Retail–0.40%
CVS Caremark Corp.		3,999		163,079
Walgreen Co.		4,399		145,431
				308,510
Education Services–0.43%
Apollo Group, Inc.–Class A(c)		2,994		161,287
DeVry, Inc.		4,403		169,339
				330,626
Electric Utilities–2.61%
American Electric Power Co., Inc.		3,786		156,400
Duke Energy Corp.		7,147		157,234
Edison International		3,821		158,189
Entergy Corp.		2,095		153,040
Exelon Corp.		3,497		151,665
FirstEnergy Corp.		3,457		153,145
NextEra Energy, Inc.		2,594		157,923
Northeast Utilities		4,309		155,426
Pepco Holdings, Inc.		7,752		157,365
Pinnacle West Capital Corp.		3,220		155,140
PPL Corp.		5,224		153,690
Progress Energy, Inc.		2,795		156,576
Southern Co.		3,371		156,043
				2,021,836
Electrical Components & Equipment–0.79%
Cooper Industries PLC (Ireland)		2,905		157,306
Emerson Electric Co.		3,056		142,379
Rockwell Automation, Inc.		2,089		153,270
Roper Industries, Inc.		1,807		156,974
				609,929
Electronic Components–0.40%
Amphenol Corp.–Class A		3,608		163,767
Corning Inc.		11,481		149,024
				312,791
Electronic Equipment & Instruments–0.19%
FLIR Systems, Inc.		5,964		149,517
Electronic Manufacturing Services–0.60%
Jabil Circuit, Inc.		7,732		152,011
Molex Inc.		6,598		157,429
TE Connectivity Ltd.		4,931		151,924
				461,364
Environmental & Facilities Services–0.60%
Republic Services, Inc.		5,675		156,346
Stericycle, Inc.(c)		1,962		152,879
Waste Management, Inc.		4,846		158,513
				467,738

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

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
Fertilizers & Agricultural Chemicals–0.62%
CF Industries Holdings, Inc.		1,155	$	167,452
Monsanto Co.		2,203		154,364
Mosaic Co. (The)		3,121		157,392
				479,208
Food Distributors–0.20%
Sysco Corp.		5,195		152,369
Food Retail–0.81%
Kroger Co. (The)		6,334		153,410
Safeway Inc.		7,300		153,592
SUPERVALU Inc.		20,050		162,806
Whole Foods Market, Inc.		2,269		157,877
				627,685
Footwear–0.20%
NIKE, Inc.–Class B		1,602		154,385
Gas Utilities–0.40%
AGL Resources Inc.		3,661		154,714
ONEOK, Inc.		1,829		158,556
				313,270
General Merchandise Stores–0.78%
Big Lots, Inc.(c)		4,100		154,816
Dollar Tree, Inc.(c)		1,812		150,595
Family Dollar Stores, Inc.		2,592		149,455
Target Corp.		2,884		147,719
				602,585
Gold–0.19%
Newmont Mining Corp.		2,414		144,864
Health Care Distributors–0.78%
AmerisourceBergen Corp.		4,086		151,958
Cardinal Health, Inc.		3,668		148,958
McKesson Corp.		1,932		150,522
Patterson Cos. Inc.		5,259		155,246
				606,684
Health Care Equipment–2.66%
Baxter International Inc.		3,123		154,526
Becton, Dickinson and Co.		2,125		158,780
Boston Scientific Corp.(c)		29,219		156,029
C.R. Bard, Inc.		1,742		148,941
CareFusion Corp.(c)		6,247		158,736
Covidien PLC (Ireland)		3,465		155,960
Edwards Lifesciences Corp.(c)		2,227		157,449
Intuitive Surgical, Inc.(c)		347		160,664
Medtronic, Inc.		4,238		162,104
St. Jude Medical, Inc.		4,557		156,305
Stryker Corp.		3,249		161,508
Varian Medical Systems, Inc.(c)		2,375		159,434
Zimmer Holdings, Inc.		3,160		168,807
				2,059,243
Health Care Facilities–0.22%
Tenet Healthcare Corp.(c)		33,978		174,307
Health Care Services–1.00%
DaVita, Inc.(c)		2,024		153,439
Express Scripts, Inc.(c)		3,450		154,181
Laboratory Corp. of America Holdings(c)		1,839		158,099
Medco Health Solutions, Inc.(c)		2,748		153,613
Quest Diagnostics Inc.		2,669		154,962
				774,294
Health Care Supplies–0.20%
DENTSPLY International Inc.		4,332		151,577
Health Care Technology–0.21%
Cerner Corp.(c)		2,664		163,170
Home Entertainment Software–0.20%
Electronic Arts Inc.(c)		7,425		152,955
Home Furnishings–0.20%
Leggett & Platt, Inc.		6,898		158,930
Home Improvement Retail–0.40%
Home Depot, Inc. (The)		3,715		156,178
Lowe’s Cos., Inc.		6,002		152,331
Orchard Supply Hardware Stores Corp.–Class A(c)		113		826
				309,335
Homebuilding–0.62%
D.R. Horton, Inc.		12,515		157,814
Lennar Corp.–Class A		8,000		157,200
PulteGroup Inc.(c)		26,074		164,527
				479,541
Homefurnishing Retail–0.18%
Bed Bath & Beyond Inc.(c)		2,452		142,142
Hotels, Resorts & Cruise Lines–0.80%
Carnival Corp.		4,432		144,660
Marriott International Inc.–Class A		5,257		153,347
Starwood Hotels & Resorts Worldwide, Inc.		3,306		158,589
Wyndham Worldwide Corp.		4,310		163,047
				619,643
Household Appliances–0.20%
Whirlpool Corp.		3,220		152,789

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

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

	Shares			Value
Household Products–0.80%
Clorox Co. (The)		2,309		$	153,687
Colgate-Palmolive Co.		1,670			154,291
Kimberly-Clark Corp.		2,106			154,918
Procter & Gamble Co. (The)		2,304			153,700
					616,596
Housewares & Specialties–0.21%
Newell Rubbermaid Inc.		10,018			161,791
Human Resource & Employment Services–0.20%
Robert Half International, Inc.		5,538			157,611
Hypermarkets & Super Centers–0.39%
Costco Wholesale Corp.		1,818			151,476
Wal-Mart Stores, Inc.		2,576	��		153,942
					305,418
Independent Power Producers & Energy Traders–0.59%
AES Corp. (The)(c)		13,059			154,619
Constellation Energy Group Inc.		3,854			152,888
NRG Energy, Inc.(c)		8,201			148,602
					456,109
Industrial Conglomerates–0.80%
3M Co.		1,903			155,532
Danaher Corp.		3,238			152,316
General Electric Co.		8,829			158,127
Tyco International Ltd.		3,347			156,338
					622,313
Industrial Gases–0.60%
Air Products & Chemicals, Inc.		1,818			154,876
Airgas, Inc.		1,961			153,115
Praxair, Inc.		1,446			154,577
					462,568
Industrial Machinery–1.78%
Dover Corp.		2,674			155,226
Eaton Corp.		3,559			154,923
Flowserve Corp.		1,539			152,854
Illinois Tool Works Inc.		3,264			152,461
Ingersoll-Rand PLC (Ireland)		4,899			149,273
Pall Corp.		2,652			151,562
Parker Hannifin Corp.		2,001			152,576
Snap-On Inc.		3,033			153,530
Stanley Black & Decker Inc.		2,379			160,820
					1,383,225
Industrial REIT’s–0.20%
Prologis, Inc.		5,464			156,216
Insurance Brokers–0.40%
Aon Corp.		3,347			156,640
Marsh & McLennan Cos., Inc.		4,936			156,076
					312,716
Integrated Oil & Gas–1.39%
Chevron Corp.		1,488			158,323
ConocoPhillips		2,194			159,877
Exxon Mobil Corp.		1,872			158,671
Hess Corp.		2,764			156,995
Murphy Oil Corp.		2,876			160,308
Occidental Petroleum Corp.		1,681			157,510
WPX Energy Inc.(c)		7,020			127,553
					1,079,237
Integrated Telecommunication Services–1.01%
AT&T Inc.		5,204			157,369
CenturyLink Inc.		4,244			157,877
Frontier Communications Corp.		30,525			157,204
Verizon Communications Inc.		3,872			155,344
Windstream Corp.		12,968			152,244
					780,038
Internet Retail–0.95%
Amazon.com, Inc.(c)		828			143,327
Expedia Inc.		5,637			163,586
Netflix Inc.(c)		2,150			148,973
Priceline.com Inc.(c)		328			153,409
TripAdvisor Inc.(c)		5,092			128,369
					737,664
Internet Software & Services–1.04%
Akamai Technologies, Inc.(c)		5,634			181,865
eBay Inc.(c)		4,939			149,800
Google Inc.–Class A(c)		239			154,370
VeriSign, Inc.		4,325			154,489
Yahoo! Inc.(c)		10,038			161,913
					802,437
Investment Banking & Brokerage–0.79%
Charles Schwab Corp. (The)		13,841			155,850
E*TRADE Financial Corp.(c)		19,453			154,846
Goldman Sachs Group, Inc. (The)		1,666			150,656
Morgan Stanley		10,025			151,678
					613,030
IT Consulting & Other Services–0.96%
Accenture PLC–Class A (Ireland)		2,760			146,915
Cognizant Technology Solutions Corp.–Class A(c)		2,292			147,398
International Business Machines Corp.		817			150,230

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

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
IT Consulting & Other Services–(continued)
SAIC, Inc.(c)		12,340	$	151,659
Teradata Corp.(c)		3,047		147,810
				744,012
Leisure Products–0.37%
Hasbro, Inc.		4,414		140,762
Mattel, Inc.		5,372		149,127
				289,889
Life & Health Insurance–1.41%
Aflac, Inc.		3,670		158,764
Lincoln National Corp.		8,112		157,535
MetLife, Inc.		4,967		154,871
Principal Financial Group, Inc.		6,379		156,923
Prudential Financial, Inc.		3,124		156,575
Torchmark Corp.		3,563		154,599
Unum Group		7,297		153,748
				1,093,015
Life Sciences Tools & Services–1.00%
Agilent Technologies, Inc.(c)		4,487		156,731
Life Technologies Corp.(c)		3,861		150,231
PerkinElmer, Inc.		8,086		161,720
Thermo Fisher Scientific, Inc.(c)		3,425		154,022
Waters Corp.(c)		2,096		155,209
				777,913
Managed Health Care–1.18%
Aetna Inc.		3,718		156,862
CIGNA Corp.		3,543		148,806
Coventry Health Care, Inc.(c)		4,873		147,993
Humana Inc.		1,771		155,157
UnitedHealth Group, Inc.		3,064		155,284
WellPoint Inc.		2,311		153,104
				917,206
Metal & Glass Containers–0.40%
Ball Corp.		4,327		154,517
Owens-Illinois, Inc.(c)		8,210		159,110
				313,627
Motorcycle Manufacturers–0.21%
Harley-Davidson, Inc.		4,092		159,056
Movies & Entertainment–0.82%
News Corp.–Class A		8,844		157,777
Time Warner Inc.		4,341		156,884
Viacom Inc.–Class B		3,512		159,480
Walt Disney Co. (The)		4,251		159,412
				633,553
Multi-Line Insurance–0.99%
American International Group, Inc.(c)		6,428		149,130
Assurant, Inc.		3,810		156,439
Genworth Financial Inc.–Class A(c)		23,991		157,141
Hartford Financial Services Group, Inc.		9,590		155,837
Loews Corp.		4,043		152,219
				770,766
Multi-Sector Holdings–0.20%
Leucadia National Corp.		6,813		154,928
Multi-Utilities–3.04%
Ameren Corp.		4,735		156,870
CenterPoint Energy, Inc.		7,813		156,963
CMS Energy Corp.		7,195		158,866
Consolidated Edison, Inc.		2,511		155,757
Dominion Resources, Inc.		2,965		157,382
DTE Energy Co.		2,904		158,123
Integrys Energy Group, Inc.		2,904		157,339
NiSource Inc.		6,665		158,694
PG&E Corp.		3,756		154,822
Public Service Enterprise Group Inc.		4,799		158,415
SCANA Corp.		3,510		158,161
Sempra Energy		2,848		156,640
TECO Energy, Inc.		8,198		156,910
Wisconsin Energy Corp.		4,490		156,970
Xcel Energy, Inc.		5,685		157,133
				2,359,045
Office Electronics–0.19%
Xerox Corp.		18,843		149,990
Office REIT’s–0.20%
Boston Properties, Inc.		1,564		155,774
Office Services & Supplies–0.40%
Avery Dennison Corp.		5,469		156,851
Pitney Bowes Inc.		8,188		151,805
				308,656
Oil & Gas Drilling–0.99%
Diamond Offshore Drilling, Inc.		2,765		152,794
Helmerich & Payne, Inc.		2,691		157,047
Nabors Industries Ltd.(c)		8,971		155,557
Noble Corp.(c)		4,907		148,289
Rowan Cos., Inc.(c)		5,027		152,469
				766,156
Oil & Gas Equipment & Services–1.22%
Baker Hughes Inc.		3,269		159,004
Cameron International Corp.(c)		3,158		155,342

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

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
Oil & Gas Equipment & Services–(continued)
FMC Technologies, Inc.(c)		3,039	$	158,727
Halliburton Co.		4,728		163,163
National Oilwell Varco Inc.		2,291		155,765
Schlumberger Ltd.		2,243		153,220
				945,221
Oil & Gas Exploration & Production–2.97%
Anadarko Petroleum Corp.		2,058		157,087
Apache Corp.		1,691		153,171
Cabot Oil & Gas Corp.		2,024		153,622
Chesapeake Energy Corp.		6,535		145,665
Denbury Resources Inc.(c)		10,052		151,785
Devon Energy Corp.		2,483		153,946
EOG Resources, Inc.		1,537		151,410
EQT Corp.		2,762		151,330
Marathon Oil Corp.		5,484		160,517
Newfield Exploration Co.(c)		4,057		153,071
Noble Energy, Inc.		1,667		157,348
Pioneer Natural Resources Co.		1,784		159,632
QEP Resources Inc.		5,201		152,389
Range Resources Corp.		2,494		154,478
Southwestern Energy Co.(c)		4,483		143,187
				2,298,638
Oil & Gas Refining & Marketing–0.81%
Marathon Petroleum Corp.		4,698		156,396
Sunoco, Inc.		3,838		157,435
Tesoro Corp.(c)		6,795		158,731
Valero Energy Corp.		7,318		154,044
				626,606
Oil & Gas Storage & Transportation–0.65%
El Paso Corp.		6,012		159,739
Spectra Energy Corp.		5,105		156,978
Williams Cos., Inc. (The)(c)		1,083		29,252
Williams Cos., Inc. (The)		4,844		159,949
				505,918
Other Diversified Financial Services–0.60%					��
Bank of America Corp.		28,882		160,584
Citigroup Inc.		5,768		151,756
JPMorgan Chase & Co.		4,708		156,541
				468,881
Packaged Foods & Meats–2.77%
Campbell Soup Co.		4,589		152,538
ConAgra Foods, Inc.		5,901		155,787
Dean Foods Co.(c)		14,009		156,901
General Mills, Inc.		3,780		152,750
H.J. Heinz Co.		2,834		153,149
Hershey Co. (The)		2,527		156,118
Hormel Foods Corp.		5,252		153,831
J M Smucker Co. (The)		1,955		152,822
Kellogg Co.		3,079		155,705
Kraft Foods Inc.–Class A		4,115		153,737
McCormick & Co., Inc.		3,080		155,294
Mead Johnson Nutrition Co.		2,058		141,446
Sara Lee Corp.		8,152		154,236
Tyson Foods, Inc.–Class A		7,372		152,158
				2,146,472
Paper Packaging–0.39%
Bemis Co., Inc.		5,126		154,190
Sealed Air Corp.		8,620		148,350
				302,540
Paper Products–0.41%
International Paper Co.		5,430		160,728
MeadWestvaco Corp.		5,215		156,189
				316,917
Personal Products–0.40%
Avon Products, Inc.		8,982		156,916
Estee Lauder Cos. Inc. (The)–Class A		1,388		155,900
				312,816
Pharmaceuticals–2.39%
Abbott Laboratories		2,735		153,789
Allergan, Inc.		1,794		157,406
Bristol-Myers Squibb Co.		4,388		154,633
Eli Lilly & Co.		3,705		153,980
Forest Laboratories, Inc.(c)		5,172		156,505
Hospira, Inc.(c)		5,192		157,681
Johnson & Johnson		2,334		153,064
Merck & Co., Inc.		4,142		156,153
Mylan Inc.(c)		7,192		154,340
Perrigo Co.		1,529		148,772
Pfizer Inc.		7,141		154,531
Watson Pharmaceuticals, Inc.(c)		2,497		150,669
				1,851,523
Property & Casualty Insurance–1.59%
ACE Ltd. (Switzerland)		2,249		157,700
Allstate Corp. (The)		5,679		155,661
Berkshire Hathaway Inc.–Class B(c)		1,998		152,447
Chubb Corp. (The)		2,228		154,222
Cincinnati Financial Corp.		5,008		152,544
Progressive Corp. (The)		8,043		156,919

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

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
Property & Casualty Insurance–(continued)
Travelers Cos., Inc. (The)		2,621	$	155,085
XL Group PLC (Ireland)		7,646		151,161
				1,235,739
Publishing–0.61%
Gannett Co., Inc.		11,624		155,413
McGraw-Hill Cos., Inc. (The)		3,512		157,935
Washington Post Co. (The)–Class B		424		159,767
				473,115
Railroads–0.61%
CSX Corp.		7,357		154,938
Norfolk Southern Corp.		2,157		157,159
Union Pacific Corp.		1,503		159,228
				471,325
Real Estate Services–0.20%
CBRE Group, Inc.–Class A(c)		9,934		151,195
Regional Banks–2.06%
BB&T Corp.		6,244		157,162
Fifth Third Bancorp		12,442		158,262
First Horizon National Corp.		20,240		161,920
Huntington Bancshares Inc.		29,505		161,982
KeyCorp		20,917		160,852
M&T Bank Corp.		2,063		157,489
PNC Financial Services Group, Inc.		2,725		157,151
Regions Financial Corp.		37,640		161,852
SunTrust Banks, Inc.		9,113		161,300
Zions Bancorp.		9,965		162,230
				1,600,200
Research & Consulting Services–0.40%
Dun & Bradstreet Corp. (The)		2,121		158,715
Equifax Inc.		3,980		154,185
				312,900
Residential REIT’s–0.60%
Apartment Investment & Management Co.–Class A		6,888		157,804
AvalonBay Communities, Inc.		1,166		152,279
Equity Residential		2,688		153,297
				463,380
Restaurants–1.01%
Chipotle Mexican Grill, Inc.(c)		471		159,076
Darden Restaurants, Inc.		3,438		156,704
McDonald’s Corp.		1,539		154,408
Starbucks Corp.		3,453		158,872
Yum! Brands, Inc.		2,601		153,485
				782,545
Retail REIT’s–0.40%
Kimco Realty Corp.		9,310		151,194
Simon Property Group, Inc.		1,217		156,920
				308,114
Semiconductor Equipment–0.80%
Applied Materials, Inc.		14,538		155,702
KLA-Tencor Corp.		3,261		157,343
Novellus Systems, Inc.(c)		3,737		154,301
Teradyne, Inc.(c)		11,376		155,055
				622,401
Semiconductors–2.65%
Advanced Micro Devices, Inc.(c)		29,275		158,085
Altera Corp.		4,405		163,425
Analog Devices, Inc.		4,390		157,074
Broadcom Corp.–Class A(c)		5,228		153,494
First Solar, Inc.(c)		4,705		158,841
Intel Corp.		6,464		156,752
Linear Technology Corp.		5,183		155,645
LSI Corp.(c)		27,709		164,868
Microchip Technology Inc.		4,355		159,524
Micron Technology, Inc.(c)		26,441		166,314
NVIDIA Corp.(c)		11,115		154,054
Texas Instruments Inc.		5,233		152,333
Xilinx, Inc.		4,811		154,241
				2,054,650
Soft Drinks–0.79%
Coca-Cola Co. (The)		2,232		156,173
Coca-Cola Enterprises, Inc.		5,825		150,169
Dr. Pepper Snapple Group, Inc.		3,853		152,116
PepsiCo, Inc.		2,320		153,932
				612,390
Specialized Consumer Services–0.21%
H&R Block, Inc.		9,777		159,658
Specialized Finance–0.98%
CME Group Inc.		620		151,076
IntercontinentalExchange Inc.(c)		1,275		153,701
Moody’s Corp.		4,620		155,602
NASDAQ OMX Group, Inc. (The)(c)		6,249		153,163
NYSE Euronext		5,724		149,396
				762,938
Specialized REIT’s–1.44%
HCP, Inc.		3,849		159,464
Health Care REIT, Inc.		2,884		157,264
Host Hotels & Resorts Inc.		10,819		159,797
Plum Creek Timber Co., Inc.		4,260		155,746

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

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

	Shares		Value
Specialized REIT’s–(continued)
Public Storage		1,169	$	157,184
Ventas, Inc.		2,838		156,459
Weyerhaeuser Co.		8,993		167,899
				1,113,813
Specialty Chemicals–0.80%
Ecolab Inc.		2,743		158,573
International Flavors & Fragrances Inc.		2,894		151,703
Sherwin-Williams Co. (The)		1,773		158,276
Sigma-Aldrich Corp.		2,377		148,467
				617,019
Specialty Stores–0.40%
Staples, Inc.		10,665		148,137
Tiffany & Co.		2,397		158,825
				306,962
Steel–0.79%
Allegheny Technologies, Inc.		3,358		160,512
Cliffs Natural Resources Inc.		2,347		146,336
Nucor Corp.		3,851		152,384
United States Steel Corp.		5,805		153,600
				612,832
Systems Software–1.11%
BMC Software, Inc.(c)		4,527		148,395
CA, Inc.		7,463		150,865
Microsoft Corp.(b)		5,776		149,945
Oracle Corp.		5,140		131,841
Red Hat, Inc.(c)		3,152		130,146
Symantec Corp.(c)		9,714		152,024
				863,216
Thrifts & Mortgage Finance–0.40%
Hudson City Bancorp, Inc.		25,030		156,438
People’s United Financial Inc.		12,092		155,382
				311,820
Tires & Rubber–0.20%
Goodyear Tire & Rubber Co. (The)(c)		11,058		156,692
Tobacco–0.80%
Altria Group, Inc.		5,153		152,786
Lorillard, Inc.		1,389		158,346
Philip Morris International Inc.		1,985		155,783
Reynolds American Inc.		3,693		152,964
				619,879
Trading Companies & Distributors–0.41%
Fastenal Co.		3,625		158,086
W.W. Grainger, Inc.		838		156,865
				314,951
Trucking–0.20%
Ryder System, Inc.		2,958		157,188
Wireless Telecommunication Services–0.60%
American Tower Corp.–Class A		2,538		152,305
MetroPCS Communications, Inc.(c)		18,029		156,492
Sprint Nextel Corp.(c)		66,749		156,193
				464,990
Total Common Stocks & Other Equity Interests (Cost $42,166,529)				77,483,245
Preferred Stocks–0.00%
Orchard Supply Hardware Stores Corp.–Series A–Pfd. (Cost $0)		113		0
Money Market Funds–0.13%
Liquid Assets Portfolio–Institutional Class(e)		49,993		49,993
Premier Portfolio–Institutional Class(e)		49,992		49,992
Total Money Market Funds (Cost $99,985)				99,985
TOTAL INVESTMENTS–100.08% (Cost $42,266,514)				77,583,230
OTHER ASSETS LESS LIABILITIES–(0.08)%				(62,299	)
NET ASSETS–100.00%			$	77,520,931

Investment Abbreviations:

REIT	– Real Estate Investment Trust
Pfd.	– Preferred

Notes to Schedule of Investments:

(a)	Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.
(b)	All or a portion of the value was pledged as collateral to cover margin requirements for open futures contracts. See Note 1I and Note 4.
(c)	Non-income producing security.
(d)	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.
(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. Select Dimensions Equally-Weighted S&P 500 Fund

Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $42,010,508)	$	77,326,443
Investments in affiliates, at value (Cost $256,006)		256,787
Total investments, at value (Cost $42,266,514)		77,583,230
Receivable for:
Investments sold		155,416
Dividends		111,504
Investment for trustee deferred compensation and retirement plans		6,129
Other assets		2,796
Total assets		77,859,075
Liabilities:
Payable for:
Investments purchased		156,788
Fund shares reacquired		10,922
Variation margin		792
Accrued fees to affiliates		118,588
Accrued other operating expenses		42,108
Trustee deferred compensation and retirement plans		8,946
Total liabilities		338,144
Net assets applicable to shares outstanding	$	77,520,931
Net assets consist of:
Shares of beneficial interest	$	32,935,793
Undistributed net investment income		1,220,027
Undistributed net realized gain		8,042,498
Unrealized appreciation		35,322,613
	$	77,520,931
Net Assets:
Series I	$	35,997,999
Series II	$	41,522,932
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		1,964,363
Series II		2,294,779
Series I:
Net asset value per share	$	18.33
Series II:
Net asset value per share	$	18.09

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends	$	1,661,102
Dividends from affiliates		4,728
Total investment income		1,665,830
Expenses:
Advisory fees		107,120
Administrative services fees		199,164
Custodian fees		64,482
Distribution fees — Series II		121,532
Transfer agent fees		2,190
Trustees’ and officers’ fees and benefits		21,123
Professional services fees		33,087
Other		29,313
Total expenses		578,011
Less: Fees waived and expenses reimbursed		(127,807	)
Net expenses		450,204
Net investment income		1,215,626
Realized and unrealized gain (loss) from:
Net realized gain from:
Investment securities		10,895,011
Futures contracts		32,196
		10,927,207
Change in net unrealized appreciation (depreciation) of:
Investment securities		(12,103,599	)
Futures contracts		(9,354	)
		(12,112,953	)
Net realized and unrealized gain (loss)		(1,185,746	)
Net increase in net assets resulting from operations	$	29,880

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

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

Statement of Changes in Net Assets

For the years ended December 31, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	1,215,626		$	1,408,741
Net realized gain		10,927,207			8,745,848
Change in net unrealized appreciation (depreciation)		(12,112,953	)		8,613,235
Net increase in net assets resulting from operations		29,880			18,767,824
Distributions to shareholders from net investment income:
Series I		(694,111	)		(629,718	)
Series II		(682,257	)		(710,006	)
Total distributions from net investment income		(1,376,368	)		(1,339,724	)
Share transactions–net:
Series I		(6,950,303	)		(7,540,299	)
Series II		(13,497,863	)		(11,702,914	)
Net increase (decrease) in net assets resulting from share transactions		(20,448,166	)		(19,243,213	)
Net increase (decrease) in net assets		(21,794,654	)		(1,815,113	)
Net assets:
Beginning of year		99,315,585			101,130,698
End of year (includes undistributed net investment income of $1,220,027 and $1,403,702, respectively)	$	77,520,931		$	99,315,585

Notes to Financial Statements

December 31, 2011

NOTE 1—Significant Accounting Policies

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 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 twenty-eight 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 investment objective’s is to achieve a high level of total return on its assets through a combination of 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.
	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. Select Dimensions Equally-Weighted S&P 500 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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. Select Dimensions Equally-Weighted S&P 500 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.	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 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, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Daily Net Assets	Rate
First $2 billion		0	.12%
Over $2 billion		0	.10%

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

  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 0.37% and Series II shares to 0.62% of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless 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.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $107,120 and reimbursed Fund expenses of $20,687.

  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, 2011, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $149,164 for services provided by insurance companies.

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 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. For the year ended December 31, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, IIS and/or IDI.

NOTE 3—Additional Valuation Information

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

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

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	77,582,404	$	826	$	—	$	77,583,230
Futures*		5,897		—		—		5,897
Total Investments	$	77,588,301	$	826	$	—	$	77,589,127

*  Unrealized appreciation.

NOTE 4—Derivative Investments

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, 2011:

	Value
Risk Exposure/Derivative Type	Assets		Liabilities
Equity risk
Futures contracts(a)	$	5,897	$	—

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

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

Effect of Derivative Instruments for the year ended December 31, 2011

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
Equity risk	$	32,196
Change in Unrealized Appreciation (Depreciation)
Equity risk		(9,354	)
Total	$	22,842

*  The average notional value of futures outstanding during the period was $897,610.

Open Futures Contracts
	Number of		Expiration		Notional		Unrealized
Long Contracts	Contracts		Month		Value		Appreciation
E-Mini S&P 500 Index		3		March-2012	$	187,890	$	5,897

NOTE 5—Investments in Other Affiliates

The Fund’s Adviser is a subsidiary of Invesco Ltd. and therefore, Invesco Ltd. is considered to be affiliated with the Fund. The following is a summary of the transactions in and earnings from investments in Invesco Ltd. for the year ended December 31, 2011.

								Change in
	Value		Purchases		Proceeds			Unrealized			Realized			Value		Dividend
	12/31/10		at Cost		from Sales			(Depreciation)			Gain (Loss)			12/31/11		Income
Invesco Ltd.	$	206,651	$	33,196	$	(55,935	)	$	(19,073	)	$	(8,037	)	$	156,802	$	3,756

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, 2011, the Fund paid legal fees of $1,238 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010:

	2011		2010
Ordinary income	$	1,376,368	$	1,339,724

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	1,188,885
Undistributed long-term gain		9,914,497
Net unrealized appreciation — investments		33,490,506
Temporary book/tax differences		(8,750	)
Shares of beneficial interest		32,935,793
Total net assets	$	77,520,931

  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.

  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, 2011 was $18,446,319 and $38,540,660, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	34,947,048
Aggregate unrealized (depreciation) of investment securities		(1,456,542	)
Net unrealized appreciation of investment securities	$	33,490,506
Cost of investments for tax purposes is $44,092,724.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of capital gain/loss reclass and real estate investment trust distributions, on December 31, 2011, undistributed net investment income was decreased by $22,933, undistributed net realized gain was increased by $22,933. This reclassification had no effect on the net assets of the Fund.

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

NOTE 11—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		15,291		$	301,389			36,273		$	613,769
Series II		70,617			1,284,479			70,709			1,148,335
Issued as reinvestment of dividends:
Series I		42,093			694,111			39,137			629,719
Series II		41,882			682,257			44,654			710,006
Reacquired:
Series I		(418,313	)		(7,945,803	)		(525,472	)		(8,783,787	)
Series II		(820,784	)		(15,464,599	)		(829,357	)		(13,561,255	)
Net increase (decrease) in share activity		(1,069,214	)	$	(20,448,166	)		(1,164,056	)	$	(19,243,213	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 96% 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 Fund 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) on																						to average			to average net			Ratio of net
	Net asset				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 12/31/11	$	18.78	$	0.29	$	(0.40	)	$	(0.11	)	$	(0.34	)	$	—		$	(0.34	)	$	18.33		(0.36	)%	$	35,998		0.37	%(d)		0.51	%(d)		1.50	%(d)		21	%
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			0.40			1.59			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)		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)		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
Series II
Year ended 12/31/11		18.53		0.23		(0.38	)		(0.15	)		(0.29	)		—			(0.29	)		18.09		(0.66	)		41,523		0.62	(d)		0.76	(d)		1.25	(d)		21
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			0.65			1.34			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)		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)		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

(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 $40,654 and $48,613 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 rebate on the ratios was less than 0.005% for the years ended December 31, 2009 and 2008, respectively.

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 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. Select Dimensions Equally-Weighted S&P 500 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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. 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 14, 2012

Houston, Texas

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	1,078.80	$	1.91	$	1,022.96	$	1.86		0.37	%
Series II		1,000.00		1,077.70		3.19		1,021.72		3.11		0.62

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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. Select Dimensions Equally-Weighted S&P 500 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, 2011:

Federal and State Income Tax
Corporate Dividends Received Deduction*	100.00%

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

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. Select Dimensions Equally-Weighted S&P 500 Fund

Invesco V.I. Small Cap Equity Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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 year ended December 31, 2011, Invesco V.I. Small Cap Equity Fund produced negative returns but outperformed the Fund’s style-specific index, the Russell 2000 Index. The Fund’s returns were driven primarily by stock selection across a number of sectors.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	-0.73	%
Series II Shares	-0.98
S&P 500 Index▼ (Broad Market Index)	2.09
Russell 2000 Index▼ (Style-Specific Index)	-4.18
Lipper VUF Small-Cap Core Funds Index▼ (Peer Group Index)	-3.21

Source(s): ^▼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 that includes fundamental, valuation and timeliness analysis:

n	Fundamental analysis. Building financial models and conducting in-depth interviews with company management.
n	Valuation analysis. Identifying attractively valued stocks given their growth potential over a one- to two-year horizon.
n	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 deteriorating. 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 SmallCap 600 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 that index by staying fully diversified in all those sectors. We also seek to limit stock-specific risk by investing, typically, in 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 fiscal year began with equity markets fueled on the second round of “quantitative easing” by the U.S. Federal Reserve. Markets rose through the first quarter of 2011. However, with the spring came increased volatility and significant macroeconomic distortions due to civil unrest in Egypt and Libya, flooding in Australia and a devastating earthquake and tsunami in Japan. Corporate earnings remained strong with largely positive surprises, but often were overshadowed by investor concerns about continuing high unemployment and soft housing data.

     Although markets stabilized and were generally in positive territory through the summer, major equity indexes sold off precipitously in August as the U.S. government struggled to raise the nation’s debt ceiling. Despite an eventual agreement between the White House and Congress, credit rating agency Standard & Poor’s announced the first-ever downgrade to long-term U.S. government debt. Uncertainty created by the downgrade, combined with the continuing saga surrounding the debt crisis in the eurozone, reignited fears of a global recession. Despite evidence of sustained, but muted, economic growth, these macroeconomic factors continued to weigh on markets through the end of the reporting period.

     The Fund produced negative returns but outperformed the Russell 2000 Index primarily due to stock selection in the information technology (IT), health care, consumer discretionary, materials, energy and industrials sectors. The Fund underperformed in other sectors, including financials, utilities and telecommunication services.

     The Fund outperformed by the widest margin in the IT sector, driven by stock selection. The leading contributor to

Portfolio Composition

By sector

Information Technology	18.2	%
Industrials	16.0
Consumer Discretionary	14.8
Financials	14.8
Health Care	14.1
Energy	6.5
Materials	6.1
Consumer Staples	4.7
Utilities	2.1
Telecommunication Services	0.2
Money Market Funds Plus
Other Assets Less Liabilities	2.5

Top 10 Equity Holdings*

1.	ViroPharma Inc.	1.8	%
2.	Team, Inc.	1.3
3.	Old Dominion Freight Line, Inc.	1.3
4.	Novellus Systems, Inc.	1.3
5.	GNC Holdings, Inc.-Class A	1.3
6.	Texas Capital Bancshares, Inc.	1.2
7.	TreeHouse Foods, Inc.	1.2
8.	Questcor Pharmaceuticals, Inc.	1.2
9.	OSI Systems, Inc.	1.2
10.	Genesco Inc.	1.2

Top Five Industries*

1.	Apparel Retail	4.7	%
2.	Oil & Gas Equipment & Services	4.4
3.	Regional Banks	4.3
4.	Pharmaceuticals	3.9
5.	Environmental & Facilities Services	3.1

Total Net Assets	$272.0 million
Total Number of Holdings*		111

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

Fund performance in this sector, and one of the top Fund contributors during the reporting period, was semiconductor and memory chip producer NetLogic. Net-Logic benefited first from the continued expansion of the smartphone market and then, in September, was acquired at a premium. We sold our holdings in Net-Logic, locking in gains for shareholders. Semiconductor equipment maker Novellus Systems also agreed to a buyout at a substantial premium and benefited Fund performance. OSI Systems was another contributor to performance in this sector, as they reported solid earnings and investors appreciated the visibility of the company’s near-term earnings given a strong backlog and continued new business wins relative to peers.

     The Fund also outperformed in the health care sector, driven by stock selection in the pharmaceuticals, biotechnology and life sciences tools and services industries. Questcor Pharmaceuticals was the leading contributor to Fund performance during the reporting period based on continued strong sales growth. Profits almost doubled on the strength of the company’s multi-use drug targeting central nervous system conditions. Shares of specialty pharmaceutical company ViroPharma rallied as management announced that a supplementary Food and Drug Administration approval may entitle the company’s most profitable drug to three years of exclusivity. Healthspring agreed to a buyout offer during the reporting period at a substantial premium to its previous closing price. We considered the offer to be at or above fair value and sold our position in the stock for a profit.

     Outperformance in the consumer discretionary sector was driven by stock selection in the retailing industry group. The leading contributors in this sector were nutritional supplement retailer GNC Holdings and mall-based shoe and headgear retailer Genesco. Dillard’s also benefited from strong earnings growth, driven primarily by significantly improved inventory management as well as revenue growth.

     Some of this outperformance was offset by underperformance in other sectors, including financials, utilities and telecommunication services. The Fund underperformed by the widest margin in the financials sector due to stock selection. One holding that detracted from performance was boutique investment banking firm KBW, which underperformed as merger and acquisition activity was weaker than

expected during the year. We eliminated KBW from the Fund prior to the close of the reporting period. Real estate property manager Jones Lang LaSalle also underperformed due to weakness in the property market during much of the year.

     In the relatively small telecommunication services sector (which accounts for less than 1% of the Russell 2000 Index¹), Fund holding Alaska Communications Systems detracted from performance. Despite the stock’s weak performance, the Fund continued to own Alaska Communications Systems based on the strong growth potential fueled by oil and gas, military and enterprise expansion.

     Utilities account for just 3.4% of the Russell 2000 Index¹, but our underweight position in this very strong-performing sector detracted from the Fund’s performance.

     Throughout the year, the Fund maintained a “barbell” strategy in positioning that provided exposure to cyclical growth opportunities as well as more defensive areas of the market. Changes during the reporting period were moderate within this framework; however the most significant changes included reduced exposure to the consumer discretionary, energy, financials and industrials sectors. We increased our exposure to the health care and consumer staples sectors.

     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. We thank you for your commitment to Invesco V.I. Small Cap Equity Fund.

1 Source: Frank Russell Co.

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. She joined Invesco in 2004. 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. He joined Invesco in 2004. Mr. Hartsfield earned a B.A. 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 – Since Fund Inception

Fund data from 8/29/03; index data from 8/31/03

Past performance cannot guarantee comparable future results.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (8/29/03)		7.09	%
	5 Years	2.26
	1 Year	-0.73
Series II Shares
Inception (8/29/03)		6.84	%
	5 Years	2.00
	1 Year	-0.98

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. 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 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, 2011, 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

Counterparty risk. Individually negotiated or over-the-counter derivatives are also subject to counterparty risk, which is the risk that the other party to the contract (such as a futures contract or swap agreement) will not fulfill its contractual obligations, which may cause losses or additional costs to the Fund.

     Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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.

     Initial public offering risk. Although the Fund’s return during certain periods was positively impacted by its investments in initial public offerings (IPOs), there can be no assurance that the Fund will have favorable IPO investment opportunities in the future.

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

     Market risk. 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.

     Small- and mid-capitalization risk. 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.

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 SmallCap 600 is a market-value weighted index that consists of 600 small-cap U.S. stocks chosen for market size, liquidity and industry group representation.

     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. Small Cap Equity Fund

Schedule of Investments^(a)

December 31, 2011

	Shares		Value
Common Stocks & Other Equity Interests–97.45%
Advertising–1.00%
Interpublic Group of Cos., Inc. (The)		278,700	$	2,711,751
Aerospace & Defense–2.49%
AAR Corp.		111,330		2,134,196
Aerovironment Inc.(b)		59,454		1,871,017
Triumph Group Inc.		47,453		2,773,628
				6,778,841
Agricultural Products–2.00%
Corn Products International, Inc.		53,674		2,822,716
Darling International Inc.(b)		197,504		2,624,828
				5,447,544
Air Freight & Logistics–0.65%
UTI Worldwide, Inc.		133,538		1,774,720
Apparel Retail–4.75%
bebe stores, inc.		249,949		2,082,075
Buckle, Inc. (The)(c)		62,140		2,539,662
Express, Inc.		128,561		2,563,506
Finish Line, Inc. (The)–Class A		134,193		2,587,912
Genesco Inc.(b)		50,754		3,133,552
				12,906,707
Apparel, Accessories & Luxury Goods–1.13%
PVH Corp.		43,419		3,060,605
Application Software–2.48%
Parametric Technology Corp.(b)		113,786		2,077,732
Quest Software, Inc.(b)		113,938		2,119,247
TIBCO Software Inc.(b)		106,712		2,551,484
				6,748,463
Asset Management & Custody Banks–0.78%
Affiliated Managers Group, Inc.(b)		22,041		2,114,834
Auto Parts & Equipment–2.12%
Dana Holding Corp.(b)		169,446		2,058,769
Modine Manufacturing Co.(b)		200,950		1,900,987
TRW Automotive Holdings Corp.(b)		55,415		1,806,529
				5,766,285
Automotive Retail–0.88%
Penske Automotive Group, Inc.		124,076		2,388,463
Biotechnology–1.10%
Cubist Pharmaceuticals, Inc.(b)		75,720		3,000,026
Casinos & Gaming–0.72%
Bally Technologies Inc.(b)		49,493		1,957,943
Communications Equipment–1.47%
ADTRAN, Inc.		84,691		2,554,281
JDS Uniphase Corp.(b)		139,339		1,454,699
				4,008,980
Computer Storage & Peripherals–0.16%
Synaptics Inc.(b)		14,423		434,854
Construction & Farm Machinery & Heavy Trucks–1.96%
Titan International, Inc.(c)		133,286		2,593,745
Trinity Industries, Inc.		90,664		2,725,360
				5,319,105
Construction Materials–0.07%
Eagle Materials Inc.		7,767		199,301
Data Processing & Outsourced Services–1.79%
Heartland Payment Systems, Inc.		82,457		2,008,652
Henry (Jack) & Associates, Inc.		85,316		2,867,471
				4,876,123
Department Stores–0.93%
Dillard’s, Inc.–Class A(c)		56,429		2,532,533
Diversified Chemicals–0.99%
FMC Corp.		31,324		2,695,117
Diversified Metals & Mining–0.73%
Compass Minerals International, Inc.		28,859		1,986,942
Electrical Components & Equipment–1.75%
Belden Inc.		81,688		2,718,577
GrafTech International Ltd.(b)		150,388		2,052,796
				4,771,373
Electronic Equipment & Instruments–1.99%
Electro Scientific Industries, Inc.(b)		155,757		2,255,361
OSI Systems, Inc.(b)		64,582		3,150,310
				5,405,671
Environmental & Facilities Services–3.15%
ABM Industries Inc.		113,540		2,341,195
Team, Inc.(b)		123,664		3,679,004
Waste Connections, Inc.		77,090		2,554,762
				8,574,961
Food Distributors–0.98%
United Natural Foods, Inc.(b)		66,934		2,678,029

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

Invesco V.I. Small Cap Equity Fund

	Shares		Value
Gas Utilities–1.10%
UGI Corp.		101,923	$	2,996,536
Gold–0.46%
Allied Nevada Gold Corp.(b)		21,610		654,351
Detour Gold Corp. (Canada)(b)		24,073		594,264
				1,248,615
Health Care Distributors–0.59%
Owens & Minor, Inc.		57,324		1,593,034
Health Care Equipment–1.78%
Greatbatch, Inc.(b)		112,788		2,492,615
Teleflex Inc.		38,364		2,351,329
				4,843,944
Health Care Facilities–2.11%
Amsurg Corp.(b)		115,999		3,020,614
Universal Health Services, Inc.–Class B		69,754		2,710,640
				5,731,254
Health Care Services–1.19%
Gentiva Health Services, Inc.(b)		68,335		461,261
IPC The Hospitalist Co.(b)		60,701		2,775,250
				3,236,511
Health Care Supplies–0.90%
Cooper Cos., Inc. (The)		34,526		2,434,774
Health Care Technology–0.75%
Omnicell, Inc.(b)		124,281		2,053,122
Industrial Machinery–2.79%
Gardner Denver Inc.		32,967		2,540,437
IDEX Corp.		64,925		2,409,367
Valmont Industries, Inc.		29,188		2,649,978
				7,599,782
Industrial REIT’s–1.05%
DuPont Fabros Technology Inc.(c)		117,400		2,843,428
Insurance Brokers–1.11%
Arthur J. Gallagher & Co.		90,298		3,019,565
Integrated Telecommunication Services–0.22%
Alaska Communications Systems Group Inc.(c)		198,608		597,810
Internet Software & Services–1.99%
Open Text Corp. (Canada)(b)(c)		46,606		2,383,431
ValueClick, Inc.(b)		185,120		3,015,605
				5,399,036
Investment Banking & Brokerage–0.82%
Evercore Partners Inc.–Class A		83,357		2,218,963
IT Consulting & Other Services–0.97%
MAXIMUS, Inc.		64,113		2,651,073
Life Sciences Tools & Services–1.58%
Bio-Rad Laboratories, Inc.–Class A(b)		24,827		2,384,385
Charles River Laboratories International, Inc.(b)		70,311		1,921,600
				4,305,985
Managed Health Care–0.22%
AMERIGROUP Corp.(b)		9,901		584,951
Metal & Glass Containers–0.91%
AptarGroup, Inc.		47,567		2,481,570
Multi-Line Insurance–1.03%
American Financial Group, Inc.		75,747		2,794,307
Office REIT’s–0.94%
Douglas Emmett, Inc.		140,100		2,555,424
Oil & Gas Equipment & Services–4.37%
Dresser-Rand Group, Inc.(b)		52,288		2,609,694
Lufkin Industries, Inc.		31,969		2,151,833
Oceaneering International, Inc.		58,421		2,694,961
Oil States International, Inc.(b)		38,251		2,921,229
Superior Energy Services, Inc.(b)(c)		52,654		1,497,480
				11,875,197
Oil & Gas Exploration & Production–3.10%
Energen Corp.		51,941		2,597,050
Forest Oil Corp.(b)		108,229		1,466,503
Rosetta Resources, Inc.(b)(c)		59,391		2,583,509
SandRidge Energy Inc.(b)		217,446		1,774,359
				8,421,421
Packaged Foods & Meats–1.20%
TreeHouse Foods, Inc.(b)		49,851		3,259,258
Paper Products–1.02%
Schweitzer-Mauduit International, Inc.		41,908		2,785,206
Personal Products–0.47%
Prestige Brands Holdings Inc.(b)		114,307		1,288,240
Pharmaceuticals–3.91%
Endo Pharmaceuticals Holdings Inc.(b)		77,748		2,684,638
Questcor Pharmaceuticals, Inc.(b)		75,971		3,158,874
ViroPharma Inc.(b)		175,186		4,798,345
				10,641,857
Property & Casualty Insurance–1.00%
W. R. Berkley Corp.		78,686		2,706,012

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

Invesco V.I. Small Cap Equity Fund

	Shares		Value
Real Estate Services–0.70%
Jones Lang LaSalle Inc.		31,296	$	1,917,193
Regional Banks–4.26%
Commerce Bancshares, Inc.		48,161		1,835,897
East West Bancorp, Inc.		124,760		2,464,010
Texas Capital Bancshares, Inc.(b)		106,855		3,270,832
Wintrust Financial Corp.		85,661		2,402,791
Zions Bancorp.		98,374		1,601,529
				11,575,059
Residential REIT’s–1.02%
Education Realty Trust, Inc.		271,400		2,776,422
Restaurants–2.02%
DineEquity, Inc.(b)		50,686		2,139,456
P.F. Chang’s China Bistro, Inc.		44,309		1,369,591
Papa John’s International, Inc.(b)		52,820		1,990,258
				5,499,305
Retail REIT’s–1.11%
Tanger Factory Outlet Centers, Inc.		102,704		3,011,281
Semiconductor Equipment–2.28%
Cymer, Inc.(b)		54,424		2,708,138
Novellus Systems, Inc.(b)		84,726		3,498,337
				6,206,475
Semiconductors–3.06%
Diodes Inc.(b)		121,364		2,585,053
Lattice Semiconductor Corp.(b)		458,531		2,723,674
Semtech Corp.(b)		121,221		3,008,706
				8,317,433
Specialized REIT’s–0.96%
LaSalle Hotel Properties		108,188		2,619,232
Specialty Chemicals–1.91%
Innophos Holdings, Inc.		59,682		2,898,158
PolyOne Corp.		198,239		2,289,660
				5,187,818
Specialty Stores–1.28%
GNC Holdings, Inc.–Class A(b)		120,366		3,484,596
Systems Software–0.92%
Ariba Inc.(b)		89,556		2,514,733
Technology Distributors–1.11%
Arrow Electronics, Inc.(b)		81,001		3,030,247
Trading Companies & Distributors–0.99%
Beacon Roofing Supply, Inc.(b)		132,418		2,678,816
Trucking–2.18%
Landstar System, Inc.		48,008		2,300,544
Old Dominion Freight Line, Inc.(b)		89,270		3,618,113
				5,918,657
Total Common Stocks & Other Equity Interests (Cost $217,726,466)				265,043,313
Money Market Funds–2.45%
Liquid Assets Portfolio–Institutional Class(d)		3,335,595		3,335,595
Premier Portfolio–Institutional Class(d)		3,335,595		3,335,595
Total Money Market Funds (Cost $6,671,190)				6,671,190
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–99.90% (Cost $224,397,656)				271,714,503
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–3.99%
Liquid Assets Portfolio–Institutional Class (Cost $10,853,794)(d)(e)		10,853,794		10,853,794
TOTAL INVESTMENTS–103.89% (Cost $235,251,450)				282,568,297
OTHER ASSETS LESS LIABILITIES–(3.89)%				(10,590,346	)
NET ASSETS–100.00%			$	271,977,951

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, 2011.
(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 1K.

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, 2011

Assets:
Investments, at value (Cost $217,726,466)*	$	265,043,313
Investments in affiliated money market funds, at value and cost		17,524,984
Total investments, at value (Cost $235,251,450)		282,568,297
Receivable for:
Investments sold		984,570
Fund shares sold		566,130
Dividends		143,534
Investment for trustee deferred compensation and retirement plans		24,820
Total assets		284,287,351
Liabilities:
Payable for:
Investments purchased		1,065,175
Fund shares reacquired		121,978
Collateral upon return of securities loaned		10,853,794
Accrued fees to affiliates		194,153
Accrued other operating expenses		31,104
Trustee deferred compensation and retirement plans		43,196
Total liabilities		12,309,400
Net assets applicable to shares outstanding	$	271,977,951
Net assets consist of:
Shares of beneficial interest	$	246,224,560
Undistributed net investment income (loss)		(42,206	)
Undistributed net realized gain (loss)		(21,521,250	)
Unrealized appreciation		47,316,847
	$	271,977,951
Net Assets:
Series I	$	217,287,297
Series II	$	54,690,654
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		13,240,495
Series II		3,394,113
Series I:
Net asset value per share	$	16.41
Series II:
Net asset value per share	$	16.11

*  At December 31, 2011, securities with an aggregate value of $10,589,042 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends	$	2,064,431
Dividends from affiliated money market funds (includes securities lending income of $43,874)		52,403
Total investment income		2,116,834
Expenses:
Advisory fees		2,060,392
Administrative services fees		753,200
Custodian fees		21,823
Distribution fees — Series II		112,026
Transfer agent fees		22,483
Trustees’ and officers’ fees and benefits		28,684
Other		53,684
Total expenses		3,052,292
Less: Fees waived		(11,374	)
Net expenses		3,040,918
Net investment income (loss)		(924,084	)
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains (losses) from securities sold to affiliates of $(75,311))		16,598,001
Foreign currencies		(2,270	)
		16,595,731
Change in net unrealized appreciation (depreciation) of investment securities		(20,800,587	)
Net realized and unrealized gain (loss)		(4,204,856	)
Net increase (decrease) in net assets resulting from operations	$	(5,128,940	)

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, 2011 and 2010

	2011			2010
Operations:
Net investment income (loss)	$	(924,084	)	$	(290,151	)
Net realized gain		16,595,731			806,612
Change in net unrealized appreciation (depreciation)		(20,800,587	)		53,570,548
Net increase (decrease) in net assets resulting from operations		(5,128,940	)		54,087,009
Share transactions–net:
Series I		225,192			(5,817,750	)
Series II		22,286,320			13,329,420
Net increase in net assets resulting from share transactions		22,511,512			7,511,670
Net increase in net assets		17,382,572			61,598,679
Net assets:
Beginning of year		254,595,379			192,996,700
End of year (includes undistributed net investment income (loss) of $(42,206) and $(28,013), respectively)	$	271,977,951		$	254,595,379

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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. 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. Small Cap Equity 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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. Small Cap Equity 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.	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.	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 affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

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

Average Daily Net Assets	Rate
First $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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

Invesco V.I. Small Cap Equity Fund

  The Adviser has contractually agreed, through at least April 30, 2013, 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, including litigation expenses; 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, 2013. 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, 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 (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $11,374.

  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, 2011, Invesco was paid $73,735 for accounting and fund administrative services and reimbursed $679,465 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, IIS and/or IDI.

NOTE 3—Additional Valuation Information

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

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

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	282,568,297	$	—	$	—	$	282,568,297

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. Small Cap Equity Fund

Pursuant to these procedures, for the year ended December 31, 2011, the Fund engaged in securities purchases of $161,028 and securities sales of $3,591,653, which resulted in net realized gains (losses) of $(75,311).

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, 2011, the Fund paid legal fees of $1,451 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010.

Tax Components of Net Assets at Period-End:

	2011
Net unrealized appreciation — investments	$	45,530,560
Temporary book/tax differences		(42,206	)
Capital loss carryforward		(19,734,963	)
Shares of beneficial interest		246,224,560
Total net assets	$	271,977,951

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund utilized $16,266,395 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, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term		Long-Term		Total
December 31, 2017	$	18,687,986	$	—	$	18,687,986
December 31, 2018		1,046,977		—		1,046,977
	$	19,734,963	$	—	$	19,734,963

*  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. Small Cap Equity 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, 2011 was $189,631,979 and $164,958,812, 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	$	58,584,214
Aggregate unrealized (depreciation) of investment securities		(13,053,654	)
Net unrealized appreciation of investment securities	$	45,530,560
Cost of investments for tax purposes is $237,037,737.

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, 2011, undistributed net investment income (loss) was increased by $909,891, undistributed net realized gain (loss) was decreased by $3,938 and shares of beneficial interest decreased by $905,953. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Years ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		5,397,940		$	93,914,705			4,244,898		$	60,143,350
Series II		2,436,175			41,035,453			1,189,752			16,471,236
Reacquired:
Series I		(5,523,283	)		(93,689,513	)		(4,793,630	)		(65,961,100	)
Series II		(1,111,430	)		(18,749,133	)		(227,279	)		(3,141,816	)
Net increase in share activity		1,199,402		$	22,511,512			413,741		$	7,511,670

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 69% of the outstanding shares of the Fund. 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 Fund 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. Small Cap 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
						Net gains																						expenses			expenses
						(losses) on																						to average			to average net			Ratio of net
	Net asset		Net			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 12/31/11	$	16.53	$	(0.05	)	$	(0.07	)	$	(0.12	)	$	—		$	—		$	—		$	16.41		(0.73	)%	$	217,287		1.06	%(d)		1.06	%(d)		(0.27	)%(d)		61	%
Year ended 12/31/10		12.86		(0.02	)		3.69			3.67			—			—			—			16.53		28.54			220,925		1.07			1.07			(0.11	)		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
Series II
Year ended 12/31/11		16.27		(0.09	)		(0.07	)		(0.16	)		—			—			—			16.11		(0.98	)		54,691		1.31	(d)		1.31	(d)		(0.52	)(d)		61
Year ended 12/31/10		12.69		(0.05	)		3.63			3.58			—			—			—			16.27		28.21			33,670		1.32			1.32			(0.36	)		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

(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. 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 $232,298, and $44,810 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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, 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 audits to obtain reasonable assurance. 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	898.70	$	5.07	$	1,019.86	$	5.40		1.06	%
Series II		1,000.00		897.50		6.27		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, 2011 through December 31, 2011, 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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. Small Cap Equity Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. Small Cap Equity Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. Small Cap Equity Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. Small Cap Equity Fund

Invesco V.I. Technology Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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 fiscal year ended December 31, 2011, equity markets were quite volatile, and investors generally favored less economically sensitive sectors. Invesco V.I. Technology Fund significantly outperformed its style-specific benchmark, the BofA Merrill Lynch 100 Technology Index, primarily due to the Fund’s security selection in the information technology services, computers and peripherals, and communications equipment industries.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	-5.05	%
Series II Shares	-5.32
S&P 500 Index▼ (Broad Market Index)	2.09
BofA Merrill Lynch 100 Technology Index (price only)▼ (Style-Specific Index)	-12.27
Lipper VUF Science & Technology Funds Category Average▼ (Peer Group)	-6.50

Source(s): ^▼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. 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 process as we attempt 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 a diversified portfolio of 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 highly volatile during the fiscal year as investors weighed the competing issues of improved corporate profits, soft macroeconomic data and sovereign debt issues in Europe. In the

U.S., corporate earnings increased, but often were overshadowed by concerns about high unemployment and a lack of consumer confidence. After generally rising through July, major equity indexes sold off precipitously in August as the U.S. received the first-ever downgrade to its credit rating from Standard & Poor’s, and while the sovereign debt crisis unfolded in the eurozone, prompting fears of a “double-dip” recession. Equity markets rebounded in the fourth quarter of 2011, despite a lack of meaningful resolutions to improve the global economy.

     Major domestic equity indexes garnered positive returns for the fiscal year, and seven out of 10 sectors in the S&P 500 Index posted gains. Less economically sensitive sectors such as utilities, consumer staples and health care had the highest returns. Conversely, the financials, materials and industrials sectors were the market laggers and produced losses for the reporting period.

     On an absolute basis, the Fund produced a loss for the fiscal year, following its strong absolute performance from the prior year, primarily as a result of losses in the semiconductors, software and communications equipment industries. Outperformance relative to the Fund’s style-specific index, however, was primarily attributable to security selection, with positive results also stemming from market allocation. Specifically, security selection in IT services, computers and peripherals and communications equipment contributed significantly to the Fund’s relative performance. In terms of market allocation, relative overweight exposures to Internet and catalog retail and software were beneficial. Conversely, the Fund’s security selection and underweight exposure to Internet software and services stocks detracted from relative performance. Additionally, the Fund’s lack of holdings in the household

Portfolio Composition

By sector

Information Technology	92.2	%
Consumer Discretionary	2.0
Health Care	1.1
Materials	1.1
Industrials	0.6
Financials	0.3
Money Market Funds Plus Other Assets Less Liabilities	2.7

Top 10 Equity Holdings*

1.	Apple Inc.	9.8	%
2.	Google Inc.-Class A	4.9
3.	QUALCOMM, Inc.	4.2
4.	Cognizant Technology Solutions Corp.-Class A	3.5
5.	EMC Corp.	3.3
6.	Microsoft Corp.	2.9
7.	Oracle Corp.	2.8
8.	Check Point Software Technologies Ltd.	2.6
9.	Citrix Systems, Inc.	2.5
10.	Intel Corp.	2.5

Total Net Assets	$102.2 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. Technology Fund

durables industry, an industry which is part of the style-specific index, negatively affected the Fund’s relative performance in 2011.

     Top individual contributors to the Fund’s absolute performance during the fiscal year included Apple and MasterCard. Following four years of exclusivity with AT&T (not a Fund holding), Apple expanded its distribution of the iPhone to Verizon Wireless and Sprint (not Fund holdings) during 2011. Apple also unveiled the iPhone 4 and the iPhone 4S, as well as the new speech-recognition feature called Siri. Despite losing its visionary and founder, Steve Jobs, we believe Apple’s unique competitive advantage to be sustainable. With regards to MasterCard, the company has managed expenses well and, in general, credit card volumes rebounded during the second half of the year.

     Top detractors from Fund performance included Rovi and Microsemi. Rovi is a global leader in digital entertainment products and services, while Microsemi designs and manufactures semiconductors for use in defense-related electronics, wireless phones, TVs and other devices. When Rovi announced expectations for the third quarter and overall 2011 fiscal year would fall short of analyst expectations, investors reacted negatively. Microsemi, on the other hand, announced revenue guidance above analyst estimates, yet suffered from poor investor sentiment toward defense budget related stocks. We continued to own Microsemi, and in fact increased our exposure on the company’s weakness. We did, however, sell Rovi before the close of the reporting period.

     We remain confident about the medium-term outlook for technology stocks, primarily due to the potential for increased enterprise spending. Businesses have been reluctant to hire additional employees due to ancillary costs and, therefore, are using IT to compensate. Additionally, we believe emerging markets will continue to have increased technology needs. Going forward, we see possible improvements in credit markets, stabilization of demand patterns and conditions for secular growth. Longer term, we continue to see positive trends in the IT sector because we believe three key secular themes, which are independent of short-term catalysts, continue to offer support: 1) globalization – productivity gains support increased technology use in international markets; 2) consumerization – 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 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.

Invesco V.I. Technology Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class(es)

Fund and index data from 12/31/01*

*  During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (5/20/97)			2.96	%
	10	Years	-0.12
	5	Years	1.62
	1	Year	-5.05
Series II Shares
	10	Years	-0.39	%
	5	Years	1.35
	1	Year	-5.32

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 1.14% and 1.39%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     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 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. 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, 2011, 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

Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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

     Initial Public Offering (IPO) risk. The prices of IPO securities may fluctuate more than prices of equity securities of companies with longer trading histories. In addition, companies offering securities in IPOs may have less experienced management or limited operating histories. There can be no assurance that the Fund will have favorable IPO investment opportunities.

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

     Market risk. 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.

     Sector fund risk. The Fund’s investments are concentrated in a comparatively narrow segment of the economy, which may make the Fund more volatile than non-concentrated funds.

     Small- and mid-capitalization risks. 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.

     Technology sector risk. 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.

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 indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

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

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, 2011

	Shares		Value
Common Stocks & Other Equity Interests–97.26%
Application Software–7.23%
Autodesk, Inc.(b)		25,447	$	771,807
Citrix Systems, Inc.(b)		42,767		2,596,812
NICE Systems Ltd.–ADR (Israel)(b)		31,386		1,081,248
Nuance Communications, Inc.(b)		43,357		1,090,862
Salesforce.com, Inc.(b)		7,747		786,011
Taleo Corp.–Class A(b)		9,042		349,835
TIBCO Software Inc.(b)		29,620		708,214
				7,384,789
Communications Equipment–9.47%
ADTRAN, Inc.		19,204		579,193
Ciena Corp.(b)		50,440		610,324
F5 Networks, Inc.(b)		9,919		1,052,604
Finisar Corp.(b)		19,854		332,455
JDS Uniphase Corp.(b)		63,880		666,907
Juniper Networks, Inc.(b)		13,111		267,596
Polycom, Inc.(b)		40,912		666,866
QUALCOMM, Inc.		77,572		4,243,188
Sonus Networks, Inc.(b)		172,767		414,641
Sycamore Networks, Inc.(b)		19,967		357,409
Ubiquiti Networks Inc.(b)		26,574		484,444
				9,675,627
Computer Hardware–9.78%
Apple Inc.(b)		24,691		9,999,855
Computer Storage & Peripherals–6.62%
EMC Corp.(b)		154,754		3,333,401
NetApp, Inc.(b)		30,474		1,105,292
SanDisk Corp.(b)		22,095		1,087,295
Synaptics Inc.(b)		24,251		731,168
Western Digital Corp.(b)		16,557		512,439
				6,769,595
Data Processing & Outsourced Services–9.98%
Alliance Data Systems Corp.(b)		12,792		1,328,321
Genpact Ltd. (Bermuda)(b)		83,942		1,254,933
MasterCard, Inc.–Class A		6,522		2,431,532
VeriFone Systems, Inc.(b)		27,146		964,226
Visa Inc.–Class A		24,151		2,452,051
Western Union Co.		43,735		798,601
Wright Express Corp.(b)		17,962		974,978
				10,204,642
Electronic Manufacturing Services–1.79%
Jabil Circuit, Inc.		68,268		1,342,149
TE Connectivity Ltd.		15,865		488,800
				1,830,949
Fertilizers & Agricultural Chemicals–1.07%
Monsanto Co.		15,547		1,089,378
Internet Retail–1.97%
Amazon.com, Inc.(b)		11,605		2,008,825
Internet Software & Services–8.65%
eBay Inc.(b)		35,794		1,085,632
Google Inc.–Class A(b)		7,730		4,992,807
Responsys, Inc.(b)		30,217		268,629
ValueClick, Inc.(b)		64,484		1,050,444
Velti PLC (Ireland)(b)		44,473		302,416
VeriSign, Inc.		31,995		1,142,862
				8,842,790
IT Consulting & Other Services–6.63%
Accenture PLC–Class A (Ireland)		26,251		1,397,341
Cognizant Technology Solutions Corp.–Class A(b)		55,071		3,541,616
International Business Machines Corp.		9,984		1,835,858
				6,774,815
Life Sciences Tools & Services–1.06%
Agilent Technologies, Inc.(b)		31,002		1,082,900
Other Diversified Financial Services–0.35%
BlueStream Ventures L.P. (Acquired 08/03/00-06/13/08; Acquisition Cost $3,149,655)(c)(d)		—		357,428
Research & Consulting Services–0.65%
Acacia Research-Acacia Technologies(b)		18,257		666,563
Semiconductor Equipment–3.24%
ASML Holding N.V.–New York Shares (Netherlands)		11,797		492,997
Cymer, Inc.(b)		19,119		951,362
Intermolecular Inc.(b)		51,640		443,071
Novellus Systems, Inc.(b)		19,755		815,684
Teradyne, Inc.(b)		44,518		606,780
				3,309,894
Semiconductors–16.01%
ARM Holdings PLC–ADR (United Kingdom)		8,918		246,761
Avago Technologies Ltd. (Singapore)		19,326		557,748
Broadcom Corp.–Class A(b)		64,252		1,886,439
Cypress Semiconductor Corp.(b)		70,135		1,184,580
Diodes Inc.(b)		26,436		563,087

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

Invesco V.I. Technology Fund

	Shares		Value
Semiconductors–(continued)
Intel Corp.		103,235	$	2,503,449
Lattice Semiconductor Corp.(b)		166,091		986,581
Marvell Technology Group Ltd.(b)		73,572		1,018,972
Micron Technology, Inc.(b)		128,143		806,020
Microsemi Corp.(b)		146,565		2,454,964
ON Semiconductor Corp.(b)		78,045		602,507
Semtech Corp.(b)		69,787		1,732,113
Skyworks Solutions, Inc.(b)		40,275		653,261
Volterra Semiconductor Corp.(b)		27,530		705,043
Xilinx, Inc.		14,206		455,444
				16,356,969
Systems Software–12.76%
Ariba Inc.(b)		33,765		948,121
Check Point Software Technologies Ltd. (Israel)(b)		51,230		2,691,624
CommVault Systems, Inc.(b)		14,916		637,212
Fortinet Inc.(b)		50,588		1,103,324
Imperva Inc.(b)		11,213		390,325
Microsoft Corp.		115,590		3,000,716
Oracle Corp.		109,763		2,815,421
Red Hat, Inc.(b)		15,055		621,621
Symantec Corp.(b)		52,955		828,746
				13,037,110
Total Common Stocks & Other Equity Interests (Cost $85,050,083)				99,392,129
Money Market Funds–2.65%
Liquid Assets Portfolio–Institutional Class(e)		1,352,232		1,352,232
Premier Portfolio–Institutional Class(e)		1,352,233		1,352,233
Total Money Market Funds (Cost $2,704,465)				2,704,465
TOTAL INVESTMENTS–99.91% (Cost $87,754,548)				102,096,594
OTHER ASSETS LESS LIABILITIES–0.09%				95,761
NET ASSETS–100.00%			$	102,192,355

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)	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, 2011 represented less than 1% of the Fund’s Net Assets.
(d)	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.
(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. Technology Fund

Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $85,050,083)	$	99,392,129
Investments in affiliated money market funds, at value and cost		2,704,465
Total investments, at value (Cost $87,754,548)		102,096,594
Receivable for:
Investments sold		682,733
Fund shares sold		4,336
Dividends		335
Investment for trustee deferred compensation and retirement plans		33,079
Total assets		102,817,077
Liabilities:
Payable for:
Investments purchased		146,181
Fund shares reacquired		325,832
Accrued fees to affiliates		69,587
Accrued other operating expenses		31,114
Trustee deferred compensation and retirement plans		52,008
Total liabilities		624,722
Net assets applicable to shares outstanding	$	102,192,355
Net assets consist of:
Shares of beneficial interest	$	87,568,585
Undistributed net investment income		1,881,365
Undistributed net realized gain (loss)		(1,599,641	)
Unrealized appreciation		14,342,046
	$	102,192,355
Net Assets:
Series I	$	100,579,223
Series II	$	1,613,132
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		6,635,114
Series II		108,554
Series I:
Net asset value per share	$	15.16
Series II:
Net asset value per share	$	14.86

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $3,957)	$	603,217
Dividends from affiliated money market funds (includes securities lending income of $4,581)		8,048
Total investment income		611,265
Expenses:
Advisory fees		920,424
Administrative services fees		352,655
Custodian fees		6,404
Distribution fees — Series II		3,713
Transfer agent fees		23,945
Trustees’ and officers’ fees and benefits		22,474
Other		42,864
Total expenses		1,372,479
Less: Fees waived		(4,687	)
Net expenses		1,367,792
Net investment income (loss)		(756,527	)
Realized and unrealized gain (loss) from:
Net realized gain from:
Investment securities		11,673,892
Foreign currencies		1,974
		11,675,866
Change in net unrealized appreciation (depreciation) of:
Investment securities		(16,912,186	)
Foreign currencies		(795	)
		(16,912,981	)
Net realized and unrealized gain (loss)		(5,237,115	)
Net increase (decrease) in net assets resulting from operations	$	(5,993,642	)

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, 2011 and 2010

	2011			2010
Operations:
Net investment income (loss)	$	(756,527	)	$	208,234
Net realized gain		11,675,866			7,911,740
Change in net unrealized appreciation (depreciation)		(16,912,981	)		14,071,941
Net increase (decrease) in net assets resulting from operations		(5,993,642	)		22,191,915
Distributions to shareholders from net investment income:
Series I		(209,892	)		—
Series II		(1,326	)		—
Total distributions from net investment income		(211,218	)		—
Share transactions–net:
Series I		(21,625,874	)		(13,096,747	)
Series II		520,728			622,157
Net increase (decrease) in net assets resulting from share transactions		(21,105,146	)		(12,474,590	)
Net increase (decrease) in net assets		(27,310,006	)		9,717,325
Net assets:
Beginning of year		129,502,361			119,785,036
End of year (includes undistributed net investment income of $1,881,365 and $2,101,126, respectively)	$	102,192,355		$	129,502,361

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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. Technology 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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

Invesco V.I. Technology Fund

	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.
	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 affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
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 Daily Net Assets	Rate
First $250 million		0	.75%
Next $250 million		0	.74%
Next $500 million		0	.73%
Next $1.5 billion		0	.72%
Next $2.5 billion		0	.71%
Next $2.5 billion		0	.70%
Next $2.5 billion		0	.69%
Over $10 billion		0	.68%

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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide 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, 2013, 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, including litigation expenses; 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, 2013. 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, 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 (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $4,687.

  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, 2011, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $302,655 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, Invesco Ltd., 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, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	101,739,166	$	—	$	357,428	$	102,096,594

Invesco V.I. Technology 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, 2011, the Fund engaged in securities purchases of $2,791,461.

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, 2011, the Fund paid legal fees of $1,278 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010:

	2011		2010
Ordinary income	$	211,218	$	—

Tax Components of Net Assets at Period-End:

	2011
Net unrealized appreciation — investments	$	16,197,256
Temporary book/tax differences		(49,316	)
Capital loss carryforward		(1,524,170	)
Shares of beneficial interest		87,568,585
Total net assets	$	102,192,355

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund utilized $12,209,745 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, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term		Long-Term		Total
December 31, 2017	$	1,524,170	$	—	$	1,524,170

*  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. Technology 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, 2011 was $49,650,109 and $68,903,019, 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	$	24,095,247
Aggregate unrealized (depreciation) of investment securities		(7,897,991	)
Net unrealized appreciation of investment securities	$	16,197,256
Cost of investments for tax purposes is $85,899,338.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, partnerships and net operating losses, on December 31, 2011, undistributed net investment income was increased by $747,984, undistributed net realized gain (loss) was increased by $461,482 and shares of beneficial interest decreased by $1,209,466. This reclassification had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		1,327,553		$	22,172,590			1,717,411		$	23,632,823
Series II		56,016			891,686			62,723			886,304
Issued as reinvestment of dividends:
Series I		14,376			209,892			—			—
Series II		93			1,326			—			—
Reacquired:
Series I		(2,725,269	)		(44,008,356	)		(2,747,969	)		(36,729,570	)
Series II		(23,813	)		(372,284	)		(18,555	)		(264,147	)
Net increase (decrease) in share activity		(1,351,044	)	$	(21,105,146	)		(986,390	)	$	(12,474,590	)

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 64% of the outstanding shares of the Fund. 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 Fund 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) 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 12/31/11	$	16.00	$	(0.10	)(c)	$	(0.71	)	$	(0.81	)	$	(0.03	)	$	15.16		(5.05	)%	$	100,579		1.12	%(d)		1.12	%(d)		(0.62	)%(d)		41	%
Year ended 12/31/10		13.19		0.02	(c)		2.79			2.81			—			16.00		21.30			128,304		1.14			1.14			0.18			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
Series II
Year ended 12/31/11		15.71		(0.14	)(c)		(0.70	)		(0.84	)		(0.01	)		14.86		(5.32	)		1,613		1.37	(d)		1.37	(d)		(0.87	)(d)		41
Year ended 12/31/10		12.98		(0.01	)(c)		2.74			2.73			—			15.71		21.03			1,198		1.39			1.39			(0.07	)		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

(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 $121,238 and $1,485 for Series I and Series II, respectively.

Invesco V.I. Technology 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. 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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	900.50	$	5.41	$	1,019.51	$	5.75		1.13	%
Series II		1,000.00		899.30		6.61		1,018.25		7.02		1.38

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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

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, 2011:

Federal and State Income Tax
Corporate Dividends Received Deduction*	95%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal 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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. Technology Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. Technology Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. Technology Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. Technology Fund

Invesco V.I. Utilities Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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, 2011, Invesco V.I. Utilities Fund posted gains. Fund returns significantly outpaced the broad market, as measured by the S&P 500 Index, but underperformed the Fund’s style-specific benchmark, the S&P 500 Utilities Index. Performance drivers were primarily stock-specific as the electric utilities and multi-utilities industries contained some of the top contributors to Fund performance as well as the Fund’s top detractors.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	16.45	%
Series II Shares	16.15
S&P 500 Index▼ (Broad Market Index)	2.09
S&P 500 Utilities Index▼ (Style-Specific Index)	19.91
Lipper VUF Utility Funds Category Average▼ (Peer Group)	7.92

Source(s): ^▼Lipper Inc.

How we invest

In selecting investments, we focus on companies in the electric utilities, 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 what we believe to be the best combination of price appreciation potential, dividend income and risk profile, and the Fund typically maintains full sector exposure. We strive to manage risk by maintaining an average of 30 to 50 positions, low portfolio 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 were volatile during 2011, but the broad market, as measured by the S&P 500 Index, still managed to post a small gain. In the first quarter most major indexes performed well, fueled by the second round of “quantitative easing” from the U.S. Federal Reserve. However, with the spring came increased volatility and significant macroeconomic distortions due to civil unrest in Egypt and Libya, flooding in Australia, and a devastating earthquake and tsunami in Japan. Corporate earnings remained strong with largely positive surprises, but were often overshadowed by investor concerns about continuing high unemployment and soft housing data. Although markets stabilized and were generally in positive territory throughout the summer, major equity indexes sold off precipitously in

August as the U.S. government struggled to raise the nation’s debt ceiling. Despite an eventual agreement between the White House and Congress, credit rating agency Standard & Poor’s announced the first-ever downgrade to long-term U.S. government debt. Uncertainty created by the downgrade combined with worries over the debt crisis in the eurozone caused fears of a global recession. Despite evidence of sustained but muted growth, these macroeconomic factors continued to weigh on markets through the end of the reporting period. While many of the developments of the past year were newsworthy, as investors, we believe success is achieved by remaining focused on company fundamentals and maintaining a long-term perspective.

     Sector performance within the S&P 500 Index was mixed for the year. The utilities sector had the highest return, while financials had the lowest. The utilities sector returned 19.91% for the period, as compared to 2.09% for the overall S&P 500 Index.¹

     Dominion Resources, a largely regulated utility company, was the largest contributor to the Fund’s performance. The company provides electricity and natural gas to customers in Virginia, West Virginia, Ohio, Pennsylvania and eastern North Carolina as well as operating the largest gas storage facility in the nation. Dominion benefited from a constructive regulatory framework in Virginia, which should allow for continued and stable capital investment at the company’s utility business in the state. Additionally, the company’s infrastructure business remains focused on gas project development in the Marcellus Shale region.

     Southern Union was also among the top contributors to Fund performance

Portfolio Composition

By sector

Utilities	88.5	%
Telecommunication Services	4.4
Money Market Funds Plus Other Assets
Less Liabilities	7.1

Top 10 Equity Holdings*

1.	Southern Co.	5.0	%
2.	American Electric Power Co., Inc.	4.9
3.	Xcel Energy, Inc.	4.7
4.	Dominion Resources, Inc.	4.6
5.	Portland General Electric Co.	4.5
6.	Pepco Holdings, Inc.	4.3
7.	Exelon Corp.	4.3
8.	National Grid PLC	4.3
9.	Entergy Corp.	3.9
10.	Edison International	3.7

Total Net Assets	$72.8 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

during the year. The company’s earnings increased as a large pipeline expansion project in Florida was completed on time and on budget. The stock’s strong performance was largely due to competing offers from The Williams Companies and Energy Transfer (not Fund holdings) to purchase Southern Union. Terms to acquire the company were announced by Energy Transfer, and it is set to close in early 2012.

     The largest detractor from Fund performance was E.ON, a diversified utility provider and nuclear generator based in Germany. Weakness in the stock was driven by government mandated nuclear plant shutdowns following the Fukushima nuclear event in Japan. The company also suffered from weak gas market conditions across Europe.

     California based PG&E was also among the largest detractors from results. Following the September 2010 San Bruno gas pipeline explosion, the company faced increased regulatory scrutiny. In March 2011, the California Public Utilities Commission ordered PG&E to turn over records pertaining to safety inspections. The regulatory review is ongoing. Total fines, as well as required spending to improve the pipeline, have yet to be determined.

     There were no major positioning changes in the Fund during the reporting period; however, Fund holdings were sold in oil, gas and consumable fuels, while holdings in multi-utilities as well as independent power producers and energy traders were added. We continued to emphasize regulated over nonregulated companies. At the end of the reporting period, the Fund’s largest industry allocations were in the electric utilities and multi-utilities industries.

     We’d like to thank you for your continued investment in Invesco V.I. Utilities Fund. We reiterate our commitment to providing investors strategic exposure to a traditionally defensive and income-oriented asset class through our total return approach, emphasizing capital appreciation, current income and capital preservation.

1 Source: 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.

Meggan Walsh
Chartered Financial Analyst, portfolio manager, is lead manager of Invesco V.I. Utilities Fund. Ms. Walsh began her career in the investment industry in 1987 and joined Invesco in 1991. Ms. Walsh earned a B.S. in finance from the University of Maryland and an M.B.A. from Loyola University Maryland.

Robert Botard

Chartered Financial Analyst, portfolio manager, is manager of Invesco V.I. Utilities Fund. Mr. Botard began his career in the investment industry in 1991 and joined Invesco in 1993. Mr. Botard earned a B.B.A. in both finance and international business from The University of Texas at Austin and a Master of International Management degree from the American Graduate School of International Management, Thunderbird.

Invesco V.I. Utilities Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class(es)

Fund and index data from 12/31/01*

1 Source: Lipper Inc.

* During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (12/30/94)			7.04	%
	10	Years	7.00
	5	Years	3.03
	1	Year	16.45
Series II Shares
	10	Years	6.74	%
	5	Years	2.76
	1	Year	16.15

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 0.93% and 1.18%, 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 1.04% and 1.29%, 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, 2011, 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

Foreign securities risk. The Fund’s foreign investments may be affected by changes in a 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.

     IPO risk. Although the Fund’s return during certain periods was positively impacted by its investments in initial public offerings (IPOs), there can be no assurance that the Fund will have favorable IPO investment opportunities in the future.

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

     Market risk. 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.

     Sector fund risk. The Fund’s investments are concentrated in a comparatively narrow segment of the economy, which may make the Fund more volatile than non-concentrated funds.

     Small- and mid-capitalization risks. 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.

     Utilities sector risk. 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.

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 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, 2011

	Shares		Value
Common Stocks–92.92%
Electric Utilities–47.01%
American Electric Power Co., Inc.		86,745	$	3,583,436
Duke Energy Corp.		99,961		2,199,142
E.ON AG (Germany)		53,357		1,147,017
Edison International		64,154		2,655,976
Entergy Corp.		38,823		2,836,020
Exelon Corp.		71,910		3,118,737
FirstEnergy Corp.		37,067		1,642,068
NextEra Energy, Inc.		13,427		817,436
Northeast Utilities		56,909		2,052,708
Pepco Holdings, Inc.		155,120		3,148,936
Pinnacle West Capital Corp.		23,157		1,115,704
Portland General Electric Co.		129,466		3,274,195
PPL Corp.		60,234		1,772,084
Progress Energy, Inc.		21,604		1,210,256
Southern Co.		79,108		3,661,909
				34,235,624
Gas Utilities–6.00%
AGL Resources, Inc.		38,623		1,632,208
Atmos Energy Corp.		16,927		564,516
ONEOK, Inc.		8,842		766,513
UGI Corp.		47,738		1,403,497
				4,366,734
Independent Power Producers & Energy Traders–6.35%
Calpine Corp.(b)		106,319		1,736,189
Constellation Energy Group, Inc.		31,764		1,260,078
NRG Energy, Inc.(b)		90,028		1,631,307
				4,627,574
Integrated Telecommunication Services–4.43%
AT&T Inc.		28,008		846,962
CenturyLink Inc.		25,623		953,175
Verizon Communications, Inc.		35,589		1,427,831
				3,227,968
Multi-Utilities–28.19%
CMS Energy Corp.		31,778		701,658
Consolidated Edison, Inc.		9,005		558,580
Dominion Resources, Inc.		63,741		3,383,372
DTE Energy Co.		24,967		1,359,453
National Grid PLC (United Kingdom)		320,668		3,113,286
NiSource, Inc.		30,658		729,967
PG&E Corp.		35,059		1,445,132
Public Service Enterprise Group, Inc.		43,704		1,442,669
Sempra Energy		37,558		2,065,690
TECO Energy, Inc.		120,370		2,303,882
Xcel Energy, Inc.		124,133		3,431,036
				20,534,725
Oil & Gas Storage & Transportation–0.94%
Southern Union Co.		16,278		685,467
Total Common Stocks (Cost $54,125,148)				67,678,092
Money Market Funds–6.93%
Liquid Assets Portfolio–Institutional Class(c)		2,524,688		2,524,688
Premier Portfolio–Institutional Class(c)		2,524,689		2,524,689
Total Money Market Funds (Cost $5,049,377)				5,049,377
TOTAL INVESTMENTS–99.85% (Cost $59,174,525)				72,727,469
OTHER ASSETS LESS LIABILITIES–0.15%				106,044
NET ASSETS–100.00%			$	72,833,513

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, 2011

Assets:
Investments, at value (Cost $54,125,148)	$	67,678,092
Investments in affiliated money market funds, at value and cost		5,049,377
Total investments, at value (Cost $59,174,525)		72,727,469
Receivable for:
Fund shares sold		99,350
Dividends		318,874
Investment for trustee deferred compensation and retirement plans		41,249
Total assets		73,186,942
Liabilities:
Payable for:
Fund shares reacquired		225,190
Accrued fees to affiliates		40,416
Accrued other operating expenses		32,119
Trustee deferred compensation and retirement plans		55,704
Total liabilities		353,429
Net assets applicable to shares outstanding	$	72,833,513
Net assets consist of:
Shares of beneficial interest	$	54,988,912
Undistributed net investment income		2,091,940
Undistributed net realized gain		2,199,937
Unrealized appreciation		13,552,724
	$	72,833,513
Net Assets:
Series I	$	70,955,709
Series II	$	1,877,804
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		4,239,612
Series II		112,931
Series I:
Net asset value per share	$	16.74
Series II:
Net asset value per share	$	16.63

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $17,440)	$	2,773,403
Dividends from affiliated money market funds		3,364
Total investment income		2,776,767
Expenses:
Advisory fees		400,703
Administrative services fees		200,579
Custodian fees		5,789
Distribution fees — Series II		4,526
Transfer agent fees		21,383
Trustees’ and officers’ fees and benefits		20,446
Other		48,927
Total expenses		702,353
Less: Fees waived		(81,236	)
Net expenses		621,117
Net investment income		2,155,650
Realized and unrealized gain from:
Net realized gain (loss) from:
Investment securities		3,891,720
Foreign currencies		(2,305	)
		3,889,415
Change in net unrealized appreciation (depreciation) of:
Investment securities		4,256,218
Foreign currencies		(3,719	)
		4,252,499
Net realized and unrealized gain		8,141,914
Net increase in net assets resulting from operations	$	10,297,564

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, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	2,155,650		$	2,154,889
Net realized gain		3,889,415			2,280,276
Change in net unrealized appreciation (depreciation)		4,252,499			(674,565	)
Net increase in net assets resulting from operations		10,297,564			3,760,600
Distributions to shareholders from net investment income:
Series I		(2,123,528	)		(2,309,020	)
Series II		(57,674	)		(55,316	)
Total distributions from net investment income		(2,181,202	)		(2,364,336	)
Share transactions–net:
Series I		(898,765	)		(8,086,914	)
Series II		(34,322	)		(32,168	)
Net increase (decrease) in net assets resulting from share transactions		(933,087	)		(8,119,082	)
Net increase (decrease) in net assets		7,183,275			(6,722,818	)
Net assets:
Beginning of year		65,650,238			72,373,056
End of year (includes undistributed net investment income of $2,091,940 and $2,119,797, respectively)	$	72,833,513		$	65,650,238

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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.
	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. Utilities 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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

Invesco V.I. Utilities Fund

	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.	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 0.60% of the 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide 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, including litigation expenses; 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, 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.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $81,236.

  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’

Invesco V.I. Utilities Fund

accounts. Pursuant to such agreement, for the year ended December 31, 2011, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $150,579 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, IIS and/or IDI.

NOTE 3—Additional Valuation Information

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

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

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity securities	$	71,580,452	$	1,147,017	$	—	$	72,727,469

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, 2011, the Fund paid legal fees of $1,200 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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. Utilities 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, 2011 and 2010:

	2011		2010
Ordinary income	$	2,181,202	$	2,364,336

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	2,146,288
Undistributed long-term gain		2,455,328
Net unrealized appreciation — investments		13,297,553
Net unrealized appreciation (depreciation) — other investments		(220	)
Temporary book/tax differences		(54,348	)
Shares of beneficial interest		54,988,912
Total net assets	$	72,833,513

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions

  The Fund utilized $1,436,392 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes.

  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, 2011 was $9,006,583 and $12,237,260, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	14,266,523
Aggregate unrealized (depreciation) of investment securities		(968,970	)
Net unrealized appreciation of investment securities	$	13,297,553
Cost of investments for tax purposes is $59,429,916.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, on December 31, 2011, undistributed net investment income was decreased by $2,305 and undistributed net realized gain was increased by $2,305. This reclassification had no effect on the net assets of the Fund.

Invesco V.I. Utilities Fund

NOTE 9—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		951,541		$	15,210,526			480,106		$	6,843,415
Series II		16,357			261,142			7,837			110,711
Issued as reinvestment of dividends:
Series I		136,473			2,123,528			160,460			2,309,020
Series II		3,727			57,674			3,865			55,316
Reacquired:
Series I		(1,149,620	)		(18,232,819	)		(1,210,979	)		(17,239,349	)
Series II		(22,568	)		(353,138	)		(14,275	)		(198,195	)
Net increase (decrease) in share activity		(64,090	)	$	(933,087	)		(572,986	)	$	(8,119,082	)

^(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 Fund 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—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				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 12/31/11	$	14.87	$	0.51	$	1.90		$	2.41		$	(0.54	)	$	—		$	(0.54	)	$	16.74		16.45	%	$	70,956		0.92	%(d)		1.04	%(d))		3.23	%(d)		14	%
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			1.04			3.25			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
Series II
Year ended 12/31/11		14.78		0.47		1.88			2.35			(0.50	)		—			(0.50	)		16.63		16.15			1,878		1.17	(d)		1.29	(d)		2.98	(d)		14
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			1.29			3.00			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

(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 $64,973 and $1,811 for Series I and Series II, 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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, 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 audits 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, 2011 by correspondence with the custodian, provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

February 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	1,052.60	$	4.77	$	1,020.55	$	4.70		0.92	%
Series II		1,000.00		1,051.30		6.06		1,019.29		5.97		1.17

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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, 2011:

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco V.I. Utilities Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco V.I. Utilities Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco V.I. Utilities Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco V.I. Utilities Fund

Invesco Van Kampen V.I. Capital Growth Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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

For the fiscal year ended December 31, 2011, Invesco Van Kampen V.I. Capital Growth Fund had negative returns and underperformed the Fund’s style-specific benchmark, the Russell 1000 Growth Index.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	-6.18	%
Series II Shares	-6.39
S&P 500 Index▼ (Broad Market Index)	2.09
Russell 1000 Growth Index▼ (Style-Specific Index)	2.64
Lipper VUF Large-Cap Growth Funds Index▼ (Peer Group Index)	-2.24

Source(s): ^▼Lipper Inc.

As noted in the Fund’s latest semiannual report, the Fund has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.

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 fiscal year began with equity markets fueled on the second round of “quantitative easing” by the U.S. Federal Reserve, and markets rose through the first

quarter of 2011. However, with the spring came increased volatility and significant macroeconomic distortions due to civil unrest in Egypt and Libya, flooding in Australia and a devastating earthquake and tsunami in Japan. Corporate earnings remained strong with largely positive surprises, but were often overshadowed by investor concerns about continuing high unemployment and soft housing data. Although markets stabilized and were generally in positive territory through the summer, major equity indexes sold off precipitously in August as the U.S. government struggled to raise the nation’s debt ceiling. Despite an eventual agreement between the White House and Congress, credit rating agency Standard & Poor’s announced the first-ever downgrade to long-term U.S. government debt. Uncertainty created by the downgrade, combined with the continuing saga surrounding the debt crisis in the eurozone, reignited fears of a global recession. Despite evidence of sustained, but muted, growth, these macroeconomic factors continued to weigh on markets through the end of the reporting period.

     In this environment, the Fund produced negative absolute returns and underperformed the Russell 1000 Growth Index for the fiscal year. The Fund underperformed the index by the widest margin in the information technology (IT), health care, energy, industrials, consumer discretionary and consumer staples sectors. Underperformance overall was driven predominately by stock selection.

     For the fiscal year, the Fund underperformed by the widest margin in the IT sector primarily attributable to stock selection. Rovi was the largest detractor from Fund performance. Weakening consumer spending in August, along with fourth quarter guidance that some legacy product revenue was decelerating while newer growth products would be postponed, hurt company performance.

Portfolio Composition

By sector

Information Technology	32.4	%
Consumer Discretionary	16.9
Industrials	11.5
Energy	11.3
Health Care	10.2
Consumer Staples	7.6
Financials	3.6
Materials	3.3
Telecommunication Services	2.8
Money Market Funds Plus Other Assets Less Liabilities	0.4

Top 10 Equity Holdings*

1.	Apple Inc.	9.5	%
2.	Google Inc.–Class A	3.5
3.	DIRECTV–Class A	3.3
4.	QUALCOMM, Inc.	2.9
5.	Halliburton Co.	2.8
6.	Amazon.com, Inc.	2.8
7.	CVS Caremark Corp.	2.5
8.	UnitedHealth Group Inc.	2.4
9.	American Tower Corp.	2.3
10.	JPMorgan Chase & Co.	2.2

Total Net Assets	$208.7 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 Van Kampen V.I. Capital Growth Fund

Despite these obstacles, we believe long-term growth still exists for Rovi, as the company generally benefits from secular tailwinds – such as the transition from analog to digital cable and the growing adoption of connected televisions. Broadcom also detracted from Fund performance during the reporting period. Weak sales of smartphones and tablets using their semiconductors led management to guide down expectations. Positions in both Rovi and Broadcom offset the positive performance from the two largest contributors to Fund performance, Apple and Visa.

     The health care sector was also a detractor from relative Fund performance largely due to stock selection. Examples of holdings that were key detractors included biotechnology company Illumina, and biotechnical instrument producer Agilent Technologies. We sold the Fund’s position in Illumina due to deteriorating fundamentals.

     In the energy sector, the Fund also underperformed due to stock selection and an emphasis on service providers and exploration companies with higher growth rates, which were down more than the defensive integrated oil companies and broader energy group. These firms included Weatherford International, Occidental Petroleum, and National Oilwell Varco. We sold the Fund’s position in National Oilwell Varco during the reporting period.

     In the industrials sector, the Fund’s underperformance was driven by stock selection. One of the largest single detractors from Fund performance was construction and engineering services firm, Foster Wheeler. The company missed out on an anticipated contract, and later in the reporting period, was disproportionately affected as energy prices declined. Examples of other holdings that were key detractors from Fund performance included industrial electric equipment producer ABB and commercial product manufacturer Ingersoll-Rand. Both companies were affected by wavering sentiment on the prospects for global growth.

     The Fund also underperformed in the consumer discretionary sector, again driven by stock selection. Amazon.com detracted from Fund performance due to weak revenue growth late in the reporting period after initial high expectations for the stock. Amazon’s spending was also higher than expected, although directed to building out rapid distribution centers and new products, which could drive future growth.

     During the reporting period, consumer staples was one of the stronger performing sectors in the index. Relative to the strong consumer staples benchmark performance, consumer staples holdings in the Fund outperformed. However, the Fund’s underweight position overall in this sector was a net detractor from Fund performance. Beverage company Hansen Natural was a notably strong contributor.

     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. We thank you for your commitment to Invesco Van Kampen V.I. Capital 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.

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 from the University of Wisconsin.

Ido Cohen
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(es)

Fund and index data from 12/31/01*

1

Source: Lipper Inc.

*

During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

     As noted earlier in this report, the Fund

has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer

group market measures. These additional benchmarks will now be included in the chart above.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (7/3/95)			7.39	%
10		Years	1.30
5		Years	2.19
1		Year	-6.18
Series II Shares
Inception (9/18/00)			-4.59	%
10		Years	1.05
5		Years	1.93
	1	Year	-6.39

Effective June 1, 2010, Class I and Class II shares of the predecessor fund, Van Kampen Life Investment Trust Capital Growth Portfolio, 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 1.03% and 1.28%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     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.

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, 2011, 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

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

     Market risk. 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.

     Growth investing risk. 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.

     Foreign risks. 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.

     Futures risk. 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.

     Options risk. 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.

     Investing in real estate investment trusts (REITs) risk. Investing in 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. REITs must comply with certain requirements of the federal income tax law to maintain their federal income tax status.

     Derivatives risk. 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 instruments may not be liquid.

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 Van Kampen V.I. Capital Growth Fund

Schedule of Investments^(a)

December 31, 2011

	Shares		Value
Common Stocks & Other Equity Interests–99.60%
Aerospace & Defense–2.62%
Boeing Co. (The)		20,835	$	1,528,247
Precision Castparts Corp.		23,942		3,945,402
				5,473,649
Apparel, Accessories & Luxury Goods–1.02%
Coach, Inc.		10,661		650,747
Prada S.p.A. (Italy)(b)		327,600		1,473,615
				2,124,362
Application Software–1.19%
Citrix Systems, Inc.(b)		40,846		2,480,169
Asset Management & Custody Banks–1.40%
BlackRock, Inc.		16,366		2,917,076
Auto Parts & Equipment–0.30%
BorgWarner, Inc.(b)		9,758		621,975
Automotive Retail–0.58%
AutoZone, Inc.(b)		3,704		1,203,689
Biotechnology–1.82%
Celgene Corp.(b)		23,731		1,604,216
Gilead Sciences, Inc.(b)		53,724		2,198,923
				3,803,139
Cable & Satellite–4.45%
Comcast Corp.–Class A		104,319		2,473,404
DIRECTV–Class A(b)		159,498		6,820,134
				9,293,538
Casinos & Gaming–1.14%
Las Vegas Sands Corp.(b)		55,443		2,369,079
Communications Equipment–3.62%
F5 Networks, Inc.(b)		8,347		885,784
Juniper Networks, Inc.(b)		26,725		545,457
QUALCOMM, Inc.		111,959		6,124,157
				7,555,398
Computer Hardware–9.46%
Apple Inc.(b)		48,745		19,741,725
Computer Storage & Peripherals–3.37%
EMC Corp.(b)		210,653		4,537,466
NetApp, Inc.(b)		47,115		1,708,861
SanDisk Corp.(b)		16,179		796,168
				7,042,495
Construction & Engineering–1.09%
Foster Wheeler AG (Switzerland)(b)		118,533		2,268,722
Construction & Farm Machinery & Heavy Trucks–1.14%
Cummins Inc.		27,026		2,378,829
Data Processing & Outsourced Services–2.89%
MasterCard, Inc.–Class A		5,956		2,220,516
Visa Inc.–Class A		37,568		3,814,279
				6,034,795
Department Stores–1.83%
Macy’s, Inc.		118,712		3,820,152
Drug Retail–2.48%
CVS Caremark Corp.		127,090		5,182,730
Fertilizers & Agricultural Chemicals–1.56%
Monsanto Co.		27,155		1,902,751
Mosaic Co. (The)		26,808		1,351,927
				3,254,678
Food Retail–0.50%
Kroger Co. (The)		43,115		1,044,245
Footwear–1.02%
NIKE, Inc.–Class B		22,155		2,135,077
General Merchandise Stores–0.34%
Dollar Tree, Inc.(b)		8,622		716,574
Gold–1.73%
Goldcorp, Inc. (Canada)		81,689		3,614,738
Health Care Equipment–0.40%
Baxter International Inc.		17,016		841,952
Health Care Services–1.40%
Express Scripts, Inc.(b)		65,311		2,918,749
Health Care Technology–1.11%
Allscripts Healthcare Solutions, Inc.(b)		121,841		2,307,669
Heavy Electrical Equipment–1.63%
ABB Ltd.–ADR (Switzerland)(b)		180,683		3,402,261
Home Improvement Retail–0.67%
Home Depot, Inc. (The)		33,251		1,397,872
Hotels, Resorts & Cruise Lines–0.85%
Starwood Hotels & Resorts Worldwide, Inc.		36,993		1,774,554
Household Products–2.08%
Procter & Gamble Co. (The)		65,209		4,350,092

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
Industrial Conglomerates–1.77%
Danaher Corp.		78,312	$	3,683,797
Industrial Machinery–0.73%
Ingersoll-Rand PLC (Ireland)		49,799		1,517,376
Integrated Oil & Gas–2.16%
Exxon Mobil Corp.		18,761		1,590,182
Occidental Petroleum Corp.		31,233		2,926,532
				4,516,714
Internet Retail–2.79%
Amazon.com, Inc.(b)		33,657		5,826,027
Internet Software & Services–5.16%
Baidu, Inc.–ADR (China)(b)		13,534		1,576,305
eBay Inc.(b)		63,650		1,930,505
Google Inc.–Class A(b)		11,255		7,269,604
				10,776,414
IT Consulting & Other Services–2.60%
Accenture PLC–Class A (Ireland)		24,911		1,326,013
Cognizant Technology Solutions Corp.–Class A(b)		63,885		4,108,444
				5,434,457
Life Sciences Tools & Services–1.48%
Agilent Technologies, Inc.(b)		88,670		3,097,243
Managed Health Care–2.36%
UnitedHealth Group Inc.		97,181		4,925,133
Oil & Gas Drilling–1.44%
Ensco PLC–ADR (United Kingdom)		64,041		3,004,804
Oil & Gas Equipment & Services–4.88%
Cameron International Corp.(b)		43,038		2,117,039
Halliburton Co.		170,534		5,885,129
Weatherford International Ltd.(b)		149,139		2,183,395
				10,185,563
Oil & Gas Exploration & Production–2.78%
Anadarko Petroleum Corp.		56,955		4,347,375
Noble Energy, Inc.		15,402		1,453,795
				5,801,170
Other Diversified Financial Services–2.24%
JPMorgan Chase & Co.		140,712		4,678,674
Packaged Foods & Meats–0.30%
Mead Johnson Nutrition Co.		9,139		628,124
Pharmaceuticals–1.64%
Allergan, Inc.		39,050		3,426,247
Railroads–1.62%
Union Pacific Corp.		31,976		3,387,537
Restaurants–1.95%
Starbucks Corp.		88,242		4,060,014
Semiconductors–1.71%
Broadcom Corp.–Class A(b)		88,455		2,597,039
Xilinx, Inc.		30,051		963,435
				3,560,474
Soft Drinks–2.22%
Coca-Cola Co. (The)		50,479		3,532,016
Monster Beverage Corp.(b)		11,971		1,103,008
				4,635,024
Systems Software–2.34%
Check Point Software Technologies Ltd. (Israel)(b)		34,770		1,826,816
Oracle Corp.		16,455		422,070
Rovi Corp.(b)		107,086		2,632,174
				4,881,060
Trucking–0.93%
J.B. Hunt Transport Services, Inc.		42,826		1,930,168
Wireless Telecommunication Services–2.81%
America Movil SAB de C.V.–Series L–ADR (Mexico)		50,816		1,148,442
American Tower Corp.		78,503		4,710,965
				5,859,407
Total Common Stocks & Other Equity Interests (Cost $177,952,196)				207,885,410
Money Market Funds–0.69%
Liquid Assets Portfolio–Institutional Class(c)		715,784		715,784
Premier Portfolio–Institutional Class(c)		715,784		715,784
Total Money Market Funds (Cost $1,431,568)				1,431,568
TOTAL INVESTMENTS–100.29% (Cost $179,383,764)				209,316,978
OTHER ASSETS LESS LIABILITIES–(0.29)%				(606,954	)
NET ASSETS–100.00%			$	208,710,024

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. Capital Growth Fund

Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $177,952,196)	$	207,885,410
Investments in affiliated money market funds, at value and cost		1,431,568
Total investments, at value (Cost $179,383,764)		209,316,978
Receivable for:
Investments sold		764,624
Fund shares sold		185,720
Dividends		93,057
Investment for trustee deferred compensation and retirement plans		37,072
Total assets		210,397,451
Liabilities:
Payable for:
Investments purchased		687,575
Fund shares reacquired		476,879
Accrued fees to affiliates		427,583
Accrued other operating expenses		38,906
Trustee deferred compensation and retirement plans		56,484
Total liabilities		1,687,427
Net assets applicable to shares outstanding	$	208,710,024
Net assets consist of:
Shares of beneficial interest	$	207,075,919
Undistributed net investment income (loss)		(55,300	)
Undistributed net realized gain (loss)		(28,245,683	)
Unrealized appreciation		29,935,088
	$	208,710,024
Net Assets:
Series I	$	122,986,268
Series II	$	85,723,756
Shares outstanding, $0.01 par value per share, with an unlimited number of shares authorized:
Series I		3,855,399
Series II		2,734,805
Series I:
Net asset value per share	$	31.90
Series II:
Net asset value per share	$	31.35

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $7,524)	$	1,502,993
Dividends from affiliated money market funds (includes securities lending income of $132)		2,760
Interest		12,775
Total investment income		1,518,528
Expenses:
Advisory fees		1,537,639
Administrative services fees		525,437
Custodian fees		22,140
Distribution fees — Series II		251,055
Transfer agent fees		25,832
Trustees’ and officers’ fees and benefits		27,066
Other		51,122
Total expenses		2,440,291
Less: Fees waived		(338,298	)
Net expenses		2,101,993
Net investment income (loss)		(583,465	)
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (includes net gains from securities sold to affiliates of $3,537,632)		13,212,083
Foreign currencies		(1,340	)
		13,210,743
Change in net unrealized appreciation (depreciation) of:
Investment securities		(34,131,792	)
Foreign currencies		(1,038	)
		(34,132,830	)
Net realized and unrealized gain (loss)		(20,922,087	)
Net increase (decrease) in net assets resulting from operations	$	(21,505,552	)

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 Changes in Net Assets

For the years ended December 31, 2011 and 2010

	2011			2010
Operations:
Net investment income (loss)	$	(583,465	)	$	(94,648	)
Net realized gain (loss)		13,210,743			(8,136,508	)
Change in net unrealized appreciation (depreciation)		(34,132,830	)		43,145,195
Net increase (decrease) in net assets resulting from operations		(21,505,552	)		34,914,039
Share transactions–net:
Series I		64,098,694			(15,642,359	)
Series II		(18,673,081	)		(21,229,104	)
Net increase (decrease) in net assets resulting from share transactions		45,425,613			(36,871,463	)
Net increase (decrease) in net assets		23,920,061			(1,957,424	)
Net assets:
Beginning of year		184,789,963			186,747,387
End of year (includes undistributed net investment income (loss) of $(55,300) and $(3,976), respectively)	$	208,710,024		$	184,789,963

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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 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 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. 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 Van Kampen V.I. Capital Growth 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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 Van Kampen V.I. Capital Growth 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 affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
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”). Effective May 2, 2011, under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Daily Net Assets	Rate
First $250 million		0	.695%
Next $250 million		0	.67%
Next $500 million		0	.645%
Over $550 million		0	.62%

  Prior to May 2, 2011, the Fund paid an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Daily Net Assets	Rate
First $500 million		0	.70%
Next $500 million		0	.65%
Over $1 billion		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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such

Invesco Van Kampen V.I. Capital Growth Fund

Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least June 30, 2012, to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual operating expenses (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 total annual operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless 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.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $338,298.

  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, 2011, Invesco was paid $60,782 for accounting and fund administrative services and reimbursed $464,655 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, IIS and/or IDI.

NOTE 3—Additional Valuation Information

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

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

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	207,843,363	$	1,473,615	$	—	$	209,316,978

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 Van Kampen V.I. Capital Growth 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, 2011, the Fund engaged in securities purchases of $4,424,629 and securities sales of $26,916,419, which resulted in net realized gains of $3,537,632.

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, 2011, the Fund paid legal fees of $1,374 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010.

Tax Components of Net Assets at Period-End:

	2011
Net unrealized appreciation — investments	$	28,739,702
Net unrealized appreciation — other investments		1,874
Temporary book/tax differences		(55,300	)
Capital loss carryforward		(27,052,171	)
Shares of beneficial interest		207,075,919
Total net assets	$	208,710,024

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. Under these limitation rules, the Fund is limited to utilizing $27,052,171 of capital loss carryforward in the fiscal year ending December 31, 2012.

  The Fund utilized $10,854,233 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, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term		Long-Term		Total
December 31, 2016	$	7,871,502	$	—	$	7,871,502
December 31, 2017		5,236,281		—		5,236,281
December 31, 2018		13,944,388		—		13,944,388
	$	27,052,171	$	—	$	27,052,171

*  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 2, 2011, the date of reorganization of Invesco V.I. Large Cap Growth Fund into the Fund are realized on securities held in each fund at such date of reorganization, the capital loss carryforward may be further limited for up to five years from the date of the reorganization.

Invesco Van Kampen V.I. Capital Growth 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, 2011 was $233,765,289 and $260,748,664, 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	$	36,979,510
Aggregate unrealized (depreciation) of investment securities		(8,239,808	)
Net unrealized appreciation of investment securities	$	28,739,702
Cost of investments for tax purposes is $180,577,276.

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, 2011, undistributed net investment income (loss) was increased by $572,101, undistributed net realized gain (loss) was increased by $1,340 and shares of beneficial interest decreased by $573,441. Further, as a result of tax deferrals and capital loss carry forward acquired in the reorganization of Invesco V.I. Large Cap Growth Fund into the Fund, undistributed net investment income (loss) was decreased by $39,960, undistributed net realized gain (loss) was decreased by $4,627,378 and shares of beneficial interest increased by $4,667,338. These reclassifications had no effect on the net assets of the Fund.

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		148,444		$	4,995,733			727,223		$	20,626,860
Series II		311,666			10,470,974			260,787			7,680,246
Issued in connection with acquisitions:(b)
Series I		2,764,202			102,182,035			—			—
Series II		17,638			641,933			—			—
Reacquired:
Series I		(1,259,447	)		(43,079,074	)		(1,140,807	)		(36,269,219	)
Series II		(876,910	)		(29,785,988	)		(995,335	)		(28,909,350	)
Net increase in share activity		1,105,593		$	45,425,613			(1,148,132	)	$	(36,871,463	)

(a)	There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 58% 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 Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.
(b)	As of the open of business on May 2, 2011, the Fund acquired all the net assets of Invesco V.I. Large Cap Growth Fund (the “Target Fund”) pursuant to a plan of reorganization approved by the Trustees of the Fund on November 10, 2010 and by the shareholders of the Target Fund on April 1, 2011. The acquisition was accomplished by a tax-free exchange of 2,781,840 shares of the Fund for 6,596,443 shares outstanding of the Target Fund as of the close of business on April 29, 2011. Each class of the Target Fund was exchanged for the like class of shares of the Fund based on the relative net asset value of the Target Fund to the net asset value of the Fund on the close of business, April 29, 2011. The Target Fund’s net assets at that date of $102,823,968 including $19,535,310 of unrealized appreciation, were combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $188,601,217. The net assets of the Fund immediately following the acquisition were $291,425,185.
	The pro forma results of operations for the year ended December 31, 2011 assuming the reorganization had been completed on January 1, 2011, the beginning of the annual reporting period are as follows:

Net investment income (loss)	$	(731,640	)
Net realized/unrealized gains (loss)		(13,447,533	)
Change in net assets resulting from operations	$	(14,179,173	)

The combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Target Fund that have been included in the Fund’s Statement of Operations since May 2, 2011.

Invesco Van Kampen V.I. Capital Growth 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) 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			Return of						Net asset					Net assets,		with fee waivers			fee waivers			income (loss)
	beginning		income			realized and			investment			investment			capital			Total			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		(loss)(a)			unrealized)			operations			income			distributions			distributions			of period		return			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I(c)
Year ended 12/31/11	$	34.00	$	(0.05	)	$	(2.05	)	$	(2.10	)	$	—		$	—		$	—		$	31.90		(6.18	)%(d)	$	122,986		0.84	%(e)		0.99	%(e)		(0.15	)%(e)		126	%
Year ended 12/31/10		28.37		0.03			5.60			5.63			—			—			—			34.00		19.84	(d)		74,870		0.79			0.90			0.12			158
Year ended 12/31/09		17.10		0.04			11.26			11.30			(0.03	)		(0.00	)(f)		(0.03	)		28.37		66.07			74,214		0.84			0.84			0.17			13
Year ended 12/31/08		33.68		(0.01	)		(16.43	)		(16.44	)		(0.14	)		—			(0.14	)		17.10		(48.99	)		48,599		0.85			0.87			(0.04	)		42
Year ended 12/31/07		28.81		0.11			4.77			4.88			(0.01	)		—			(0.01	)		33.68		16.96			143,558		0.80			0.80			0.35			177
Series II(c)
Year ended 12/31/11		33.49		(0.14	)		(2.00	)		(2.14	)		—			—			—			31.35		(6.39	)(d)		85,724		1.09	(e)		1.24	(e)		(0.40	)(e)		126
Year ended 12/31/10		28.01		(0.05	)		5.53			5.48			—			—			—			33.49		19.56	(d)		109,920		1.04			1.15			(0.18	)		158
Year ended 12/31/09		16.91		(0.02	)		11.12			11.10			—			—			—			28.01		65.64	(g)		112,533		1.09			1.09			(0.07	)		13
Year ended 12/31/08		33.29		(0.08	)		(16.25	)		(16.33	)		(0.05	)		—			(0.05	)		16.91		(49.11	)(g)		69,198		1.10			1.12			(0.29	)		42
Year ended 12/31/07		28.54		0.03			4.72			4.75			—			—			—			33.29		16.64	(g)		261,198		1.05			1.05			0.11			177

(a)	Calculated using average shares outstanding.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the year ended December 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $81,993,574 and sold of $49,870,241 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco V.I. Large Cap Growth Fund into the Fund.
(c)	On June 1, 2010, the predecessor Fund’s former Class I and Class II shares were reorganized into Series I and Series II shares.
(d)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. 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.
(e)	Ratios are based on average daily net assets (000’s) of $120,372 and $100,422 for Series I and Series II shares, respectively.
(f)	Amount is less than $0.01 per share.
(g)	These returns include combined Rule 12b-1 fees and service fees of up to 0.25%.

NOTE 12—Proposed Reorganization

The Board of Trustees of the Fund 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. Leisure Fund and Invesco V.I. Capital Appreciation 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 2012. Upon closing of the reorganization, shareholders of the Target Funds will receive a corresponding class of shares of the Fund in exchange for their shares of the Target Funds and the Target Funds will liquidate and cease operations.

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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. 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 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
I	$	1,000.00	$	884.70	$	3.99	$	1,020.97	$	4.28		0.84	%
II		1,000.00		883.60		5.17		1,019.71		5.55		1.09

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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. 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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco Van Kampen V.I. Capital Growth Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco Van Kampen V.I. Capital Growth Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco Van Kampen V.I. Capital Growth Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex		Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee		Held by Trustee
Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
				��
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco Van Kampen V.I. Capital Growth Fund

Invesco Van Kampen V.I. Comstock Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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 year ended December 31, 2011, Invesco Van Kampen V.I. Comstock Fund underperformed its benchmark, the Russell 1000 Value Index. The Fund’s performance was mixed among sectors, with stock selection in the health care, consumer discretionary (specifically media companies) and telecommunication sectors contributing to relative performance. Alternatively, stock selection and an underweight position in the energy sector detracted the most from the Fund’s performance versus its style-specific benchmark.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.

If variable product issuer charges were included, returns would be lower.

Series I Shares	-1.84	%
Series II Shares	-2.11
S&P 500 Index▼ (Broad Market Index)	2.09
Russell 1000 Value Index▼ (Style-Specific Index)	0.39
Lipper VUF Large-Cap Value Funds Index▼ (Peer Group Index)	-1.70

Source(s): ^▼Lipper Inc.

As noted in the Fund’s latest semiannual report, the Fund has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.

How we invest

Our strategy aims to exploit market inefficiencies by investing in companies that appear undervalued relative to the market in general. Ultimately, we believe the market will recognize the value in these companies, and we will sell as the stock prices begin to reflect their intrinsic value. We feel that stock selection, as opposed to making sector bets, may provide a more consistent opportunity for success. In addition, investors can 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 first 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

Portfolio Composition

By sector

Financials	19.7	%
Consumer Discretionary	16.1
Health Care	13.6
Energy	12.1
Information Technology	11.1
Consumer Staples	7.7
Industrials	6.3
Materials	4.1
Telecommunication Services	3.8
Utilities	2.9
Money Market Funds Plus Other Assets Less Liabilities	2.6

Total Net Assets	$1.8 billion
Total Number of Holdings*		72

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 will 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:

n	It is statistically cheap on the basis of its primary valuation criteria, which depends upon 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.

Top 10 Equity Holdings*

1.	Comcast Corp.	4.2	%
2.	International Paper Co.	3.2
3.	Pfizer Inc.	2.8
4.	JPMorgan Chase & Co.	2.6
5.	Viacom Inc.	2.5
6.	Microsoft Corp.	2.4
7.	Bristol-Myers Squibb Co.	2.3
8.	Citigroup Inc.	2.3
9.	Allstate Corp. (The)	2.2
10.	BP PLC-ADR	2.2

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.

     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 with 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 there is a collegial relationship between the risk management team and the Fund team.

     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

The fiscal year began with equity markets fueled by the second round of “quantitative easing” by the U.S. Federal Reserve, and markets rose through the first quarter of 2011. However, with the spring came increased volatility and significant macroeconomic distortions due to civil unrest in Egypt and Libya, flooding in Australia and a devastating earthquake and tsunami in Japan. Corporate earnings remained strong with largely positive surprises, but were often overshadowed by investor concerns about continuing high unemployment and soft housing data. Although markets stabilized and were generally in positive territory through the summer, major equity indexes sold off precipitously in August as the U.S. government struggled to raise the nation’s debt ceiling. Despite an eventual agreement between the White House and Congress, credit rating agency Standard & Poor’s announced the first-ever downgrade to long-term U.S. government debt. Uncertainty created by the downgrade combined with the

Invesco Van Kampen V.I. Comstock Fund

continuing saga surrounding the debt crisis in the eurozone reignited fears of a global recession. Despite evidence of sustained, but muted, growth, these macroeconomic factors continued to weigh on markets through the end of the reporting period.

     Results were mixed among the sectors of the Russell 1000 Value Index, with cyclical sectors such as financials, materials and information technology (IT) posting negative returns, while defensive sectors such as health care and consumer staples fared better, posting double-digit positive returns.

     On the positive side, strong stock selection in the health care sector was the largest contributor to Fund performance. Health care provider UnitedHealth Group and pharmaceuticals companies Bristol-Myers Squibb and GlaxoSmithKline were top performers in this sector on a relative and absolute basis.

     Stock selection and a significant overweight position in the consumer discretionary sector also contributed to the Fund’s relative performance. The Fund’s main consumer discretionary exposure was in the media companies industry. Viacom and Comcast were top performers during the reporting period, continuing the trend from the previous fiscal year.

     Favorable stock selection in the telecommunication services sector also contributed to Fund performance. Notably, Vodafone Group was one of the largest relative contributors in this sector. Not owning holdings such as Sprint Nextel also helped relative Fund performance versus the Russell 1000 Value Index.

     Unfavorable stock selection and a slight underweight position in the energy sector were the largest detractors from Fund performance. Specifically, the Fund had exposure to oil equipment and services companies Halliburton and Weatherford, which were two of the main detractors in this sector. Both holdings were affected by decreasing profit margins from international drilling efforts that fell through during the economic slowdown in Europe and overseas, causing earnings expectations to be lowered, thereby, negatively affecting the stock price.

     Unfavorable stock selection and a meaningful overweight to IT companies also hurt Fund performance relative to the style-specific index. Hardware and internet-related stocks, including Cisco Systems and Hewlett-Packard, performed poorly over the reporting period.

Cisco Systems’ stock declined on cautious guidance regarding company revenue forecasts and worries of IT spending cuts from both the U.S. government and corporations. Hewlett-Packard’s stock declined on concerns of overpaying for the acquisition of an enterprise software company. The company’s CEO was replaced in September of 2011 by Meg Whitman, the former CEO of eBay.

     A material underweight exposure to the utilities sector was a major detractor from Fund performance. Utilities was the best performing sector for the reporting period, as investors sought defensive oriented, dividend yielding stocks during the market turmoil.

     Finally, stock selection in the financials sector acted as a detractor from relative Fund performance for the year. Notably, exposure to diversified financials like Citigroup, Morgan Stanley and Bank of New York Mellon detracted from both absolute and relative Fund performance as investors fled bank stocks beginning in the summer of 2011 on concerns of European debt crisis contagion.

     Toward the end of the reporting period, we reduced our exposure to select media, pharmaceuticals and insurance companies due to rising valuations, using the proceeds to increase the Fund’s exposure to select diversified financial, banking, property and casualty insurance and integrated oil companies as they came under pressure.

     We believe in 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.

     Thank you for your investment in 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(es)

Fund and index data from 12/31/01*

1

Source: Lipper Inc.

*

During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

     As noted earlier in this report, the Fund has adopted a three-tier benchmark structure to compare its performance

to broad market, style-specific and peer group market measures. These additional benchmarks will now be included in the chart above.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (4/30/99)			4.13	%
	10	Years	3.40
	5	Years	-1.57
	1	Year	-1.84
Series II Shares
Inception (9/18/00)			3.97	%
	10	Years	3.15
	5	Years	-1.83
	1	Year	-2.11

Effective June 1, 2010, Class I and Class II shares of the predecessor fund, Van Kampen Life Investment Trust Comstock Portfolio, 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 0.85% and 1.10%, 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, 2011, 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. 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.

     Small- and medium-sized companies risk. 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. 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 the returns on other styles of investing or the overall stock markets.

     Foreign risks. 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.

     Futures risk. 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.

     Options risk. 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.

     Real estate investment trusts (REITs) risk. Investing in 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.

     Derivative instruments risk. 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.

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 indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

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

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. Comstock Fund

Schedule of Investments

December 31, 2011

	Shares		Value
Common Stocks & Other Equity Interests–97.36%(a)
Aerospace & Defense–2.39%
Honeywell International Inc.		502,426	$	27,306,853
Textron Inc.		838,070		15,495,914
				42,802,767
Aluminum–0.90%
Alcoa Inc.		1,852,362		16,022,931
Asset Management & Custody Banks–1.98%
Bank of New York Mellon Corp. (The)		1,359,091		27,059,502
State Street Corp.		209,852		8,459,134
				35,518,636
Automobile Manufacturers–1.25%
General Motors Co.(b)		1,103,681		22,371,614
Cable & Satellite–5.91%
Comcast Corp.–Class A		3,140,641		74,464,598
Time Warner Cable Inc.		492,305		31,295,829
				105,760,427
Communications Equipment–1.03%
Cisco Systems, Inc.		1,022,014		18,478,013
Computer Hardware–2.88%
Dell Inc.(b)		1,220,173		17,851,131
Hewlett-Packard Co.		1,310,961		33,770,355
				51,621,486
Department Stores–0.36%
Macy’s, Inc.		202,726		6,523,723
Diversified Banks–2.51%
U.S. Bancorp		416,231		11,259,049
Wells Fargo & Co.		1,222,236		33,684,824
				44,943,873
Drug Retail–1.94%
CVS Caremark Corp.		851,348		34,717,971
Electric Utilities–2.93%
FirstEnergy Corp.		482,646		21,381,218
PPL Corp.		1,055,735		31,059,723
				52,440,941
Electrical Components & Equipment–0.72%
Emerson Electric Co.		276,777		12,895,040
General Merchandise Stores–0.71%
Target Corp.		249,090		12,758,390
Health Care Distributors–0.96%
Cardinal Health, Inc.		423,278		17,189,320
Home Improvement Retail–1.59%
Home Depot, Inc. (The)		264,000		11,098,560
Lowe’s Cos., Inc.		686,444		17,421,949
				28,520,509
Household Products–0.37%
Procter & Gamble Co. (The)		100,077		6,676,137
Hypermarkets & Super Centers–1.04%
Wal-Mart Stores, Inc.		311,852		18,636,276
Industrial Conglomerates–1.49%
General Electric Co.		1,485,952		26,613,400
Industrial Machinery–1.67%
Ingersoll-Rand PLC (Ireland)		982,482		29,936,227
Integrated Oil & Gas–7.55%
BP PLC–ADR (United Kingdom)		901,840		38,544,642
Chevron Corp.		352,014		37,454,290
Murphy Oil Corp.		381,944		21,289,558
Royal Dutch Shell PLC–ADR (United Kingdom)		517,354		37,813,404
				135,101,894
Integrated Telecommunication Services–2.79%
AT&T Inc.		662,336		20,029,041
Verizon Communications Inc.		743,243		29,818,909
				49,847,950
Internet Software & Services–3.73%
eBay Inc.(b)		1,175,614		35,656,373
Yahoo! Inc.(b)		1,925,619		31,060,234
				66,716,607
Investment Banking & Brokerage–1.59%
Goldman Sachs Group, Inc. (The)		155,300		14,043,779
Morgan Stanley		949,805		14,370,550
				28,414,329
Life & Health Insurance–1.47%
Aflac, Inc.		152,674		6,604,677
MetLife, Inc.		631,559		19,692,010
				26,296,687
Managed Health Care–2.80%
UnitedHealth Group Inc.		675,078		34,212,953
WellPoint, Inc.		239,724		15,881,715
				50,094,668

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

Invesco Van Kampen V.I. Comstock Fund

	Shares		Value
Movies & Entertainment–5.44%
News Corp.–Class B		1,562,235	$	28,401,432
Time Warner Inc.		651,771		23,555,004
Viacom Inc.–Class B		999,129		45,370,448
				97,326,884
Oil & Gas Drilling–0.45%
Noble Corp.(b)		267,452		8,082,399
Oil & Gas Equipment & Services–3.45%
Halliburton Co.		1,048,005		36,166,652
Weatherford International Ltd.(b)		1,741,934		25,501,914
				61,668,566
Oil & Gas Exploration & Production–0.61%
Chesapeake Energy Corp.		491,412		10,953,573
Other Diversified Financial Services–5.78%
Bank of America Corp.		2,716,933		15,106,147
Citigroup Inc.		1,593,390		41,922,091
JPMorgan Chase & Co.		1,399,243		46,524,830
				103,553,068
Packaged Foods & Meats–3.57%
Kraft Foods Inc.–Class A		848,843		31,712,774
Unilever N.V.–New York Shares (Netherlands)		938,932		32,271,093
				63,983,867
Paper Products–3.24%
International Paper Co.		1,960,925		58,043,380
Personal Products–0.30%
Avon Products, Inc.		310,348		5,421,780
Pharmaceuticals–9.87%
Abbott Laboratories		127,038		7,143,347
Bristol-Myers Squibb Co.		1,143,137		40,284,148
GlaxoSmithKline PLC–ADR (United Kingdom)		454,348		20,731,899
Merck & Co., Inc.		944,427		35,604,898
Pfizer Inc.		2,276,465		49,262,703
Roche Holding AG–ADR (Switzerland)		340,186		14,479,098
Sanofi–ADR (France)		251,412		9,186,594
				176,692,687
Property & Casualty Insurance–3.95%
Allstate Corp. (The)		1,422,253		38,983,955
Chubb Corp. (The)		115,482		7,993,664
Travelers Cos., Inc. (The)		400,921		23,722,495
				70,700,114
Regional Banks–2.38%
Fifth Third Bancorp		1,205,177		15,329,851
PNC Financial Services Group, Inc.		472,031		27,222,028
				42,551,879
Semiconductor Equipment–0.39%
KLA-Tencor Corp.		142,955		6,897,579
Semiconductors–0.75%
Intel Corp.		553,846		13,430,766
Soft Drinks–0.48%
PepsiCo, Inc.		129,128		8,567,643
Specialty Stores–0.78%
Staples, Inc.		1,010,573		14,036,859
Systems Software–2.36%
Microsoft Corp.		1,628,706		42,281,208
Wireless Telecommunication Services–1.00%
Vodafone Group PLC–ADR (United Kingdom)		640,564		17,955,009
Total Common Stocks & Other Equity Interests (Cost $1,928,432,278)				1,743,047,077
Money Market Funds–3.18%
Liquid Assets Portfolio–Institutional Class(c)		28,457,270		28,457,270
Premier Portfolio–Institutional Class(c)		28,457,270		28,457,270
Total Money Market Funds (Cost $56,914,540)				56,914,540
TOTAL INVESTMENTS–100.54% (Cost $1,985,346,818)				1,799,961,617
OTHER ASSETS LESS LIABILITIES–(0.54)%				(9,576,236	)
NET ASSETS–100.00%			$	1,790,385,381

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. Comstock Fund

Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $1,928,432,278)	$	1,743,047,077
Investments in affiliated money market funds, at value and cost		56,914,540
Total investments, at value (Cost $1,985,346,818)		1,799,961,617
Receivable for:
Investments sold		6,865,853
Fund shares sold		289,062
Dividends		3,932,271
Investment for trustee deferred compensation and retirement plans		16,694
Total assets		1,811,065,497
Liabilities:
Payable for:
Investments purchased		7,420,350
Fund shares reacquired		10,361,827
Accrued fees to affiliates		2,778,630
Accrued other operating expenses		45,556
Trustee deferred compensation and retirement plans		73,753
Total liabilities		20,680,116
Net assets applicable to shares outstanding	$	1,790,385,381
Net assets consist of:
Shares of beneficial interest	$	2,435,550,019
Undistributed net investment income		28,583,510
Undistributed net realized gain (loss)		(488,362,947	)
Unrealized appreciation (depreciation)		(185,385,201	)
	$	1,790,385,381
Net Assets:
Series I	$	262,318,683
Series II	$	1,528,066,698
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		23,169,949
Series II		135,455,799
Series I:
Net asset value per share	$	11.32
Series II:
Net asset value per share	$	11.28

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $642,147)	$	43,988,712
Dividends from affiliated money market funds		60,620
Total investment income		44,049,332
Expenses:
Advisory fees		10,548,579
Administrative services fees		4,748,244
Custodian fees		8,790
Distribution fees — Series II		4,011,282
Transfer agent fees		32,344
Trustees’ and officers’ fees and benefits		99,190
Other		(447,755	)
Total expenses		19,000,674
Less: Fees waived		(3,452,557	)
Net expenses		15,548,117
Net investment income		28,501,215
Net realized gain from investment securities (includes net gains from securities sold to affiliates of $1,332,073)		77,412,661
Change in net unrealized appreciation (depreciation) of investment securities		(142,304,555	)
Net realized and unrealized gain (loss)		(64,891,894	)
Net increase (decrease) in net assets resulting from operations	$	(36,390,679	)

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

Invesco Van Kampen V.I. Comstock Fund

Statement of Changes in Net Assets

For the years ended December 31, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	28,501,215		$	26,130,323
Net realized gain		77,412,661			53,876,954
Change in net unrealized appreciation (depreciation)		(142,304,555	)		169,893,792
Net increase (decrease) in net assets resulting from operations		(36,390,679	)		249,901,069
Distributions to shareholders from net investment income:
Series I		(4,436,682	)		(193,186	)
Series II		(21,508,918	)		(2,889,112	)
Total distributions from net investment income		(25,945,600	)		(3,082,298	)
Share transactions–net:
Series I		51,382,742			53,459,524
Series II		(86,766,882	)		(725,552,245	)
Net increase (decrease) in net assets resulting from share transactions		(35,384,140	)		(672,092,721	)
Net increase (decrease) in net assets		(97,720,419	)		(425,273,950	)
Net assets:
Beginning of year		1,888,105,800			2,313,379,750
End of year (includes undistributed net investment income of $28,583,510 and $25,786,214, respectively)	$	1,790,385,381		$	1,888,105,800

Notes to Financial Statements

December 31, 2011

NOTE 1—Significant Accounting Policies

Invesco Van Kampen V.I. Comstock 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 twenty-eight 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 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.
	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. Comstock 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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.

Invesco Van Kampen V.I. Comstock 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.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

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

Average Daily Net Assets	Rate
First $500 million		0	.60%
Over $500 million		0	.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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least June 30, 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 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 total annual operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $3,452,557.

  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.

  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, 2011, Invesco was paid $403,421 for accounting and fund administrative services and reimbursed $4,344,823 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, Invesco Ltd., 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

Invesco Van Kampen V.I. Comstock Fund

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, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	1,785,482,519	$	14,479,098	$	—	$	1,799,961,617

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, 2011, the Fund engaged in securities purchases of $4,487,703 and securities sales of $3,290,556, which resulted in net realized gains of $1,332,073.

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, 2011, the Fund paid legal fees of $3,481 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010:

	2011		2010
Ordinary income	$	25,945,600	$	3,082,298

Invesco Van Kampen V.I. Comstock Fund

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	28,656,730
Net unrealized appreciation (depreciation) — investments		(190,634,742	)
Temporary book/tax differences		(73,220	)
Capital loss carryforward		(483,113,406	)
Shares of beneficial interest		2,435,550,019
Total net assets	$	1,790,385,381

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. Under these limitation rules, the Fund is limited to utilizing 481,267,851 of capital loss carryforward in the fiscal year ending December 31, 2012.

  The Fund utilized $72,219,646 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, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term
December 31, 2016	$	142,015,578
December 31, 2017		341,097,828
	$	483,113,406

*  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 2, 2011, the date of reorganization of Invesco Van Kampen V.I. Value Fund into the Fund are realized on securities held in each fund at such date of reorganization, the capital loss carryforward may be further limited for up to five years from the dates of the reorganization.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended December 31, 2011 was $452,447,329 and $445,575,544, 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	$	130,625,724
Aggregate unrealized (depreciation) of investment securities		(321,260,466	)
Net unrealized appreciation (depreciation) of investment securities	$	(190,634,742	)
Cost of investments for tax purposes is $1,990,596,359.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of Convertible Preferred transactions and Fair Fund Payments, on December 31, 2011, undistributed net investment income was increased by $245,580 and undistributed net realized gain (loss) was decreased by $245,580. Further, as a result of tax deferrals acquired in the reorganization of Invesco Van Kampen V.I. Value Fund into the Fund, undistributed net investment income was decreased by $3,899, undistributed net realized gain was decreased by $6,326,412 and shares of beneficial interest increased by $6,330,311. These reclassifications had no effect on the net assets of the Fund.

Invesco Van Kampen V.I. Comstock Fund

NOTE 10—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		6,303,011		$	74,837,879			7,436,847		$	85,067,642
Series II		10,321,141			116,328,044			7,860,095			81,647,180
Issued as reinvestment of dividends:
Series I		363,662			4,436,682			18,487			193,186
Series II		1,767,372			21,508,918			277,000			2,889,112
Issued in connection with acquisitions:(b)
Series I		2,033,402			25,661,404			—			—
Series II		1,023			12,889			—			—
Reacquired:
Series I		(4,604,342	)		(53,553,223	)		(3,029,626	)		(31,801,304	)
Series II		(19,330,648	)		(224,616,733	)		(79,919,957	)		(810,088,537	)
Net increase (decrease) in share activity		(3,145,379	)	$	(35,384,140	)		(67,357,154	)	$	(672,092,721	)

(a)

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 69% of the outstanding shares of the Fund. 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 Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

(b)

As of the opening of business on May 2, 2011 the Fund acquired all the net assets of Invesco Van Kampen V.I. Value Fund (the “Target Fund”) pursuant to a plan of reorganization approved by the Trustees of the Fund on November 10, 2010 and by the shareholders of the Target fund on April 1, 2011. The acquisition was accomplished by a tax-free exchange of 2,034,425 shares of the Fund for 2,471,069 shares outstanding of the Target fund as of the close of business on April 29, 2011. Class I and Class II shares of the Target fund were exchanged for Series I and Series II shares of the Fund, respectively, based on the relative net asset value of the Target fund to the net asset value of the Fund at the close of business on April 29, 2011. The Target fund’s net assets at that date of $25,674,293, including $4,451,624 of unrealized appreciation, were combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $2,060,987,398. The net assets of the Fund immediately following the acquisition were $2,086,661,691.

The pro forma results of the operations for the year ended December 31, 2011, assuming the reorganization had been completed on January 1, 2011, the beginning of the annual reporting period, are as follows:

Net investment income (loss)	$	28,597,812
Net realized/unrealized gains (losses)		(62,664,518	)
Change in net assets resulting from operations	$	(34,066,706	)

The combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Target fund that have been included in the Fund’s Statement of Operations since May 2, 2011.

Invesco Van Kampen V.I. Comstock 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) on																						to average			to average net			Ratio of net
	Net asset				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			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I(c)
Year ended 12/31/11	$	11.71	$	0.20	$	(0.40	)	$	(0.20	)	$	(0.19	)	$	—		$	(0.19	)	$	11.32		(1.84	)%(d)	$	262,319		0.62	%(e)		0.80	%(e)		1.75	%(e)		24	%
Year ended 12/31/10		10.11		0.17		1.44			1.61			(0.01	)		0.00			(0.01	)		11.71		15.98	(d)		223,354		0.61			0.73			1.58			21
Year ended 12/31/09		8.25		0.16		2.12			2.28			(0.42	)		0.00			(0.42	)		10.11		28.78			148,060		0.62			0.62			1.91			27
Year ended 12/31/08		13.86		0.26		(4.93	)		(4.67	)		(0.30	)		(0.64	)		(0.94	)		8.25		(35.67	)		192,548		0.60			0.60			2.38			38
Year ended 12/31/07		14.75		0.30		(0.60	)		(0.30	)		(0.26	)		(0.33	)		(0.59	)		13.86		(2.04	)		309,646		0.59			0.59			2.03			25
Series II(c)
Year ended 12/31/11		11.67		0.17		(0.40	)		(0.23	)		(0.16	)		—			(0.16	)		11.28		(2.11	)(d)		1,528,067		0.87	(e)		1.05	(e)		1.50	(e)		24
Year ended 12/31/10		10.10		0.14		1.44			1.58			(0.01	)		0.00			(0.01	)		11.67		15.70	(d)		1,664,751		0.86			0.98			1.32			21
Year ended 12/31/09		8.22		0.14		2.11			2.25			(0.37	)		0.00			(0.37	)		10.10		28.41	(f)		2,165,319		0.87			0.87			1.63			27
Year ended 12/31/08		13.80		0.23		(4.91	)		(4.68	)		(0.26	)		(0.64	)		(0.90	)		8.22		(35.80	)(f)		2,268,812		0.85			0.85			2.13			38
Year ended 12/31/07		14.70		0.26		(0.59	)		(0.33	)		(0.24	)		(0.33	)		(0.57	)		13.80		(2.33	)(f)		3,521,509		0.84			0.84			1.78			25

(a)	Calculated using average shares outstanding.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the period ending December 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $21,084,025 and sold of $6,434,519 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Van Kampen V.I. Value Fund into the Fund.
(c)	On June 1, 2010, the Class I and Class II shares of the predecessor fund were reorganized into Series I and Series II shares of the Fund, respectively.
(d)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. 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.
(e)	Ratios are based on average daily net assets (000’s) of $267,956 and $1,604,513 for Series I and Series II shares, respectively.
(f)	These returns include combined Rule 12b-1 fees and service fees of up to 0.25%.

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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. 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 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	928.60	$	3.01	$	1,022.08	$	3.16		0.62	%
Series II		1,000.00		927.60		4.23		1,020.82		4.43		0.87

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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, 2011:

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco Van Kampen V.I. Comstock Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco Van Kampen V.I. Comstock Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco Van Kampen V.I. Comstock Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco Van Kampen V.I. Comstock Fund

Invesco Van Kampen V.I. Equity and Income Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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, 2011, Invesco Van Kampen V.I. Equity and Income Fund underperformed the Russell 1000 Value Index, the Fund’s style-specific benchmark. Because the Fund uses a bottom-up stock selection approach, stock selection in various sectors was the primary reason the Fund underperformed its benchmark.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	-1.26	%
Series II Shares	-1.30
Russell 1000 Value Index▼ (Broad Market Index)	0.39
Barclays Capital U.S. Government/Credit Index▼ (Style-Specific Index)	8.74

Source(s): ^▼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, under-earning 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 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

The fiscal year began with equity markets fueled on the second round of “quantitative easing” by the U.S. Federal Reserve, and markets rose through the first quarter

of 2011. However, with the spring came increased volatility and significant macroeconomic distortions due to civil unrest in Egypt and Libya, flooding in Australia and a devastating earthquake and tsunami in Japan. Corporate earnings remained strong with largely positive surprises, but were often overshadowed by investor concerns about continuing high unemployment and soft housing data. Although markets stabilized and were generally in positive territory through the summer, major equity indexes sold off precipitously in August as the U.S. government struggled to raise the nation’s debt ceiling. Despite an eventual agreement between the White House and Congress, credit rating agency Standard & Poor’s announced the first-ever downgrade to long-term U.S. government debt. Uncertainty created by the downgrade combined with the continuing saga surrounding the debt crisis in the euro-zone reignited fears of a global recession. Despite evidence of sustained, but muted, growth, these macroeconomic factors continued to weigh on markets through the end of the reporting period.

     Results were mixed among the sectors of the Russell 1000 Value Index, with cyclical industries such as financials, materials and information technology (IT) posting negative returns, while defensive sectors such as health care and consumer staples fared better, posting double digit positive returns.

     The Fund’s material underweight exposure to the financials sector was the largest relative contributor to performance versus the Russell 1000 Value Index, as financials was the worst performing sector in the benchmark for the reporting period. 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.

     Strong stock selection in the materials sector was another driver of relative performance versus the style-specific benchmark. Having little exposure to holdings

Portfolio Composition

By security type

Common Stocks & Other Equity Interests	62.5	%
Bonds and Notes	18.2
U.S. Treasury Securities	8.0
Preferred Stocks	1.6
U.S. Government Sponsored Agency
Securities	0.8
Money Market Funds Plus
Other Assets Less Liabilities	8.9

Top 10 Equity Holdings*

1.	General Electric	2.9	%
2.	JPMorgan Chase & Co.	2.7
3.	Marsh & McLennan Cos., Inc.	2.1
4.	Pfizer Inc.	1.9
5.	Anadarko Petroleum Corp.	1.8
6.	Procter & Gamble Co.	1.8
7.	eBay Inc.	1.6
8.	Royal Dutch Shell PLC	1.5
9.	Viacom Inc.-Class B	1.5
10.	UnitedHealth Group, Inc.	1.5

Total Net Assets	$920.8 million
Total Number of Holdings*		378

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

such as Dow Chemical and LyondellBasell Industries and no exposure to companies such as Alcoa and United States Steel provided the largest boost to relative returns in this sector. Dow Chemical and LyondellBasell were no longer held at the end of the reporting period.

     In the telecommunication services sector, stock selection versus the Russell 1000 Value Index helped with relative Fund performance. A top relative contributor for the Fund was Vodafone Group. Additionally, our lack of exposure to Sprint Nextel benefited relative Fund performance as this company underperformed the Fund’s style-specific benchmark and the telecommunications sector, posting a negative double-digit return for the fiscal year.

     Stock selection in the consumer staples sector was the largest detractor from Fund performance during the reporting period. Avon was clearly a detractor in this sector, as the stock was not held in the Russell 1000 Value Index and performed poorly for the year. Avon’s sales declined in emerging markets, notably Brazil, and profits from sales in Europe were affected by slowing economies. In December, Avon announced it will be searching for a replacement CEO in 2012.

     Stock selection in the energy sector also negatively affected relative Fund performance. More specifically, holdings in exploration and production and oil and gas equipment service companies were the largest detractors, as investors shunned highly cyclical areas of the market. Baker Hughes, Schlumberger and Hess all performed poorly, with stock prices producing double-digit losses for the reporting period. Additionally, not owning Chevron, a relatively large weight in the Russell 1000 Value Index, also detracted from Fund performance, as this stock performed very well for the reporting period.

     Stock selection in the IT sector detracted from Fund performance for the reporting period. The Fund was overweight in this sector versus the Russell 1000 Value Index and was adversely affected by exposure to stocks in the hardware and equipment industry. Notably affecting the Fund was Hewlett Packard, as the stock sold off significantly on the announcement that the company was selling its PC business to purchase an enterprise software company. Hewlett Packard also replaced its CEO for the third time in two years, creating uncertainty in investors’ minds about management stability. Cisco Systems

was also a large detractor in the IT sector; however, the Fund exited this position during the early part of 2011.

     Finally, an underweight exposure to the utilities sector also detracted from relative Fund performance. Lack of exposure to the multi-utilities industry was one of the largest detractors in this sector.

     Within fixed income, the positive contribution of investment grade corporate, U.S. Treasury and agency bonds was offset by the Fund’s allocation to convertible securities. Convertible bonds were a large detractor from relative Fund performance, as they became more closely correlated with equities than bonds and underperformed the Russell 1000 Value Index for the reporting period.

     Currency forward contracts were used during the reporting period for the sole purpose of hedging currency exposure of the U.S. dollar denominated American Depositary Receipts (ADRs) in the Fund. An ADR is a negotiable security that represents the underlying securities of a non-U.S. company that trades in the U.S. financial markets, priced in U.S. dollars. The use of currency forward contracts had a slight positive effect on relative Fund performance versus the Russell 1000 Value Index for the reporting period.

     Equity markets experienced an increase in market volatility during the reporting period. We believe that market volatility, and the market correction that began in the third quarter of 2011, created opportunities to invest in companies with attractive valuations and strong fundamentals. We believe that ultimately those valuations and fundamentals could be reflected in those companies’ stock prices. Thank you for your continued investment in Invesco Van Kampen V.I. Equity and Income 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.

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.

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 Booth School of Business.

Invesco Van Kampen V.I. Equity and Income Fund

Your Fund’s Long-Term Performance

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

Fund and index data from 4/30/03

Past performance cannot guarantee comparable future results.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception	6.40	%
5 Years	1.62
1 Year	-1.26
Series II Shares
Inception (4/30/03)	6.39	%
5 Years	1.60
1 Year	-1.30

Effective June 1, 2010, Class II shares of the predecessor fund, Universal Institutional Funds Equity and Income Portfolio, 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 0.70% and 0.75%, 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 0.71% and 0.96%, 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.

2 Total annual Fund operating expenses after any contractual fee waivers by the distributor 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, 2011, 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. 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.

     Income risk. 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.

     Call risk. 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 Fund’s income and distributions to shareholders and termination of any conversion option on convertible securities.

     Credit risk. 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.

     Developing markets securities risk. 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.

     Foreign risk. 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.

     Futures risk. 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.

     Options risk. 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.

     Investing in real estate investment trusts (REITs) risk. Investing in 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 be 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.

     Derivatives risk. 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.

     Swaps risk. 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. Swaps are subject to credit risk and counterparty risk.

     Value investing style risk. 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.

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 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.

Invesco Van Kampen V.I. Equity and Income Fund

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. Equity and Income Fund

Schedule of Investments^(a)

December 31, 2011

	Shares		Value
Common Stocks & Other Equity Interests–62.50%
Agricultural Products–0.67%
Archer-Daniels-Midland Co.		215,796	$	6,171,766
Asset Management & Custody Banks–1.07%
Northern Trust Corp.		115,089		4,564,430
State Street Corp.		131,377		5,295,807
				9,860,237
Cable & Satellite–2.21%
Comcast Corp.–Class A		518,577		12,295,460
Time Warner Cable Inc.		127,282		8,091,317
				20,386,777
Computer Hardware–1.44%
Dell Inc.(b)		400,172		5,854,517
Hewlett-Packard Co.		289,283		7,451,930
				13,306,447
Consumer Electronics–0.14%
Sony Corp.–ADR (Japan)		71,357		1,287,280
Data Processing & Outsourced Services–0.64%
Western Union Co.		325,380		5,941,439
Diversified Banks–1.64%
Comerica Inc.		149,859		3,866,362
U.S. Bancorp		167,298		4,525,411
Wells Fargo & Co.		242,623		6,686,690
				15,078,463
Diversified Chemicals–0.66%
PPG Industries, Inc.		72,328		6,038,665
Diversified Support Services–0.47%
Cintas Corp.		123,645		4,304,083
Drug Retail–0.68%
Walgreen Co.		188,108		6,218,851
Electric Utilities–2.75%
American Electric Power Co., Inc.		254,353		10,507,322
Edison International		132,147		5,470,886
Entergy Corp.		53,584		3,914,311
FirstEnergy Corp.		121,673		5,390,114
				25,282,633
Food Distributors–0.91%
Sysco Corp.		285,033		8,360,018
Health Care Distributors–0.48%
Cardinal Health, Inc.		109,487		4,446,267
Health Care Equipment–0.93%
Medtronic, Inc.		223,139		8,535,067
Health Care Facilities–0.21%
HCA Holdings, Inc.(b)		89,652		1,975,034
Home Improvement Retail–1.18%
Home Depot, Inc. (The)		258,998		10,888,276
Household Products–2.18%
Energizer Holdings, Inc.(b)		47,224		3,658,915
Procter & Gamble Co. (The)		245,759		16,394,583
				20,053,498
Industrial Conglomerates–4.34%
General Electric Co.		1,477,074		26,454,395
Tyco International Ltd.		288,353		13,468,969
				39,923,364
Industrial Machinery–0.73%
Ingersoll-Rand PLC (Ireland)		219,302		6,682,132
Insurance Brokers–2.13%
Marsh & McLennan Cos., Inc.		619,849		19,599,625
Integrated Oil & Gas–4.10%
Exxon Mobil Corp.		93,455		7,921,246
Hess Corp.		171,205		9,724,444
Occidental Petroleum Corp.		68,383		6,407,487
Royal Dutch Shell PLC–ADR (United Kingdom)		187,757		13,723,159
				37,776,336
Integrated Telecommunication Services–0.88%
Verizon Communications Inc.		202,718		8,133,046
Internet Software & Services–1.87%
eBay Inc.(b)		469,785		14,248,579
Yahoo! Inc.(b)		187,133		3,018,455
				17,267,034
Investment Banking & Brokerage–0.61%
Charles Schwab Corp. (The)		495,623		5,580,715
Investment Companies–Exchange Traded Funds–0.15%
SPDR S&P Homebuilders ETF		82,592		1,412,323
IT Consulting & Other Services–0.64%
Amdocs Ltd.(b)		207,808		5,928,762

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
Managed Health Care–1.80%
CIGNA Corp.		71,988	$	3,023,496
UnitedHealth Group Inc.		266,918		13,527,404
				16,550,900
Movies & Entertainment–2.66%
Time Warner Inc.		301,108		10,882,043
Viacom Inc.–Class B		299,346		13,593,302
				24,475,345
Oil & Gas Equipment & Services–1.54%
Baker Hughes Inc.		105,276		5,120,625
Cameron International Corp.(b)		74,098		3,644,880
Schlumberger Ltd.		79,539		5,433,309
				14,198,814
Oil & Gas Exploration & Production–2.37%
Anadarko Petroleum Corp.		217,251		16,582,769
Devon Energy Corp.		84,601		5,245,262
				21,828,031
Oil & Gas Refining & Marketing–0.01%
Sunoco, Inc.		1,334		54,721
Oil & Gas Storage & Transportation–0.61%
Williams Cos., Inc. (The)		169,797		5,606,697
Other Diversified Financial Services–3.71%
Citigroup Inc.		348,005		9,156,012
JPMorgan Chase & Co.		753,109		25,040,874
				34,196,886
Packaged Foods & Meats–1.69%
Kraft Foods Inc.–Class A		173,198		6,470,677
Unilever N.V.–New York Shares (Netherlands)		264,130		9,078,148
				15,548,825
Personal Products–0.99%
Avon Products, Inc.		521,769		9,115,304
Pharmaceuticals–5.25%
Abbott Laboratories		57,885		3,254,874
Bristol-Myers Squibb Co.		353,648		12,462,556
Eli Lilly & Co.		50,476		2,097,783
Hospira, Inc.(b)		31,839		966,950
Merck & Co., Inc.		321,435		12,118,099
Pfizer Inc.		807,785		17,480,467
				48,380,729
Property & Casualty Insurance–0.57%
Chubb Corp. (The)		76,179		5,273,110
Regional Banks–2.30%
BB&T Corp.		209,695		5,278,023
Fifth Third Bancorp		360,090		4,580,345
PNC Financial Services Group, Inc.		195,984		11,302,397
				21,160,765
Semiconductor Equipment–0.54%
Applied Materials, Inc.		460,650		4,933,562
Semiconductors–1.03%
Intel Corp.		224,165		5,436,001
STMicroelectronics N.V. (Switzerland)		434,233		2,564,736
STMicroelectronics N.V.–New York Shares (Netherlands)		243,394		1,443,327
				9,444,064
Soft Drinks–1.05%
Coca-Cola Co. (The)		93,297		6,527,991
PepsiCo, Inc.		47,669		3,162,838
				9,690,829
Systems Software–1.42%
Microsoft Corp.		504,402		13,094,276
Wireless Telecommunication Services–1.25%
Vodafone Group PLC–ADR (United Kingdom)		409,880		11,488,936
Total Common Stocks & Other Equity Interests (Cost $529,535,817)				575,479,932
	Principal
	Amount
Bonds and Notes–18.18%
Advertising–0.38%
Interpublic Group of Cos., Inc. (The), Sr. Unsec. Conv. Global Notes, 4.25%, 03/15/12(c)	$	1,805,000		1,834,331
4.75%, 03/15/13(c)		1,445,000		1,593,113
WPP Finance (United Kingdom), Sr. Unsec. Gtd. Global Notes, 8.00%, 09/15/14		100,000		112,107
				3,539,551
Aerospace & Defense–0.02%
Raytheon Co., Sr. Unsec. Notes, 1.63%, 10/15/15		185,000		185,491
Agricultural Products–0.03%
Corn Products International, Inc., Sr. Unsec. Notes, 6.63%, 04/15/37		255,000		304,225
Airlines–0.06%
Continental Airlines, Inc., Series 2010-1, Class A, Sec. Pass Through Ctfs., 4.75%, 01/12/21		315,000		322,481
Delta Air Lines, Inc., Series 2010-1, Class A, Sec. Pass Through Ctfs., 6.20%, 07/02/18		235,816		252,471
				574,952

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
Alternative Carriers–0.36%
TW Telecom Inc., Sr. Unsec. Conv. Deb., 2.38%, 04/01/13(c)	$	2,794,000	$	3,303,905
Application Software–0.12%
Adobe Systems, Inc., Sr. Unsec. Global Notes, 4.75%, 02/01/20		185,000		200,437
Cadence Design Systems, Inc., Series B, Sr. Unsec. Conv. Global Notes, 1.50%, 12/15/13		901,000		893,116
				1,093,553
Asset Management & Custody Banks–0.30%
Affiliated Managers Group, Inc., Sr. Unsec. Conv. Notes, 3.95%, 08/15/13(c)		2,511,000		2,736,990
Automobile Manufacturers–0.10%
Daimler Finance North America LLC, Sr. Unsec. Gtd. Global Notes, 7.30%, 01/15/12		190,000		190,331
Sr. Unsec. Gtd. Notes, 1.88%, 09/15/14(d)		700,000		694,548
				884,879
Automotive Retail–0.12%
Advance Auto Parts, Inc., Sr. Unsec. Gtd. Notes, 5.75%, 05/01/20		585,000		644,128
AutoZone, Inc., Sr. Unsec. Global Notes, 6.50%, 01/15/14		395,000		434,775
Sr. Unsec. Notes, 5.88%, 10/15/12		60,000		62,157
				1,141,060
Biotechnology–1.11%
Amylin Pharmaceuticals Inc., Sr. Unsec. Conv. Global Notes, 3.00%, 06/15/14		2,736,000		2,448,720
Dendreon Corp., Sr. Unsec. Conv. Notes, 2.88%, 01/15/16		762,000		538,163
Gilead Sciences, Inc., Series D, Sr. Unsec. Conv. Notes, 1.63%, 05/01/16		6,360,000		7,274,250
				10,261,133
Brewers–0.09%
Anheuser-Busch InBev Worldwide, Inc., Sr. Unsec. Gtd. Global Notes, 3.63%, 04/15/15		395,000		421,510
5.38%, 01/15/20		50,000		58,983
FBG Financial Ltd. (Australia), Sr. Unsec. Gtd. Notes, 5.13%, 06/15/15(d)		325,000		357,383
				837,876
Broadcasting–0.01%
COX Communications Inc., Sr. Unsec. Global Notes, 5.45%, 12/15/14		20,000		22,254
Sr. Unsec. Notes, 8.38%, 03/01/39(d)		80,000		106,767
				129,021
Cable & Satellite–0.34%
Comcast Corp., Sr. Unsec. Gtd. Global Notes, 5.70%, 05/15/18		445,000		512,994
DIRECTV Holdings LLC/ DIRECTV Financing Co., Inc., Sr. Unsec. Gtd. Global Notes, 7.63%, 05/15/16		1,050,000		1,113,656
NBC Universal Media LLC, Sr. Unsec. Global Notes, 2.10%, 04/01/14		230,000		233,150
5.15%, 04/30/20		175,000		196,164
5.95%, 04/01/41		215,000		257,007
Time Warner Cable, Inc., Sr. Unsec. Gtd. Global Notes, 8.75%, 02/14/19		215,000		276,103
Sr. Unsec. Gtd. Notes, 5.88%, 11/15/40		470,000		514,278
				3,103,352
Casinos & Gaming–1.09%
International Game Technology, Sr. Unsec. Conv. Notes, 3.25%, 05/01/14		4,320,000		5,135,400
MGM Resorts International, Sr. Unsec. Gtd. Conv. Notes, 4.25%, 04/15/15		5,130,000		4,879,913
				10,015,313
Communications Equipment–1.10%
Alcatel-Lucent USA, Inc., Series B, Sr. Unsec. Gtd. Conv. Notes, 2.88%, 06/15/13(c)		5,506,000		4,859,045
Ciena Corp., Sr. Unsec. Conv. Notes, 4.00%, 03/15/15(d)		2,460,000		2,429,250
JDS Uniphase Corp., Sr. Unsec. Conv. Notes, 1.00%, 05/15/13(c)(d)		1,100,000		1,081,256
1.00%, 05/15/13(c)		1,624,000		1,603,700
Juniper Networks, Inc., Sr. Unsec. Notes, 4.60%, 03/15/21		120,000		128,080
				10,101,331
Computer & Electronics Retail–0.04%
Best Buy Co., Inc., Sr. Unsec. Notes, 5.50%, 03/15/21		420,000		403,302
Computer Hardware–0.05%
Hewlett-Packard Co., Sr. Unsec. Global Notes, 2.63%, 12/09/14		420,000		424,222
Computer Storage & Peripherals–0.84%
SanDisk Corp., Sr. Unsec. Conv. Notes, 1.00%, 05/15/13		7,906,000		7,737,998
Construction Materials–0.28%
Cemex S.A.B. de C.V. (Mexico), Unsec. Sub. Conv. Notes, 4.88%, 03/15/15		3,900,000		2,564,250

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
Consumer Finance–0.01%
American Express Credit Corp., Series C, Sr. Unsec. Medium-Term Global Notes, 7.30%, 08/20/13	$	35,000	$	37,964
Capital One Financial Corp., Sr. Unsec. Notes, 6.75%, 09/15/17		50,000		56,318
				94,282
Department Stores–0.04%
Macy’s Retail Holdings, Inc., Sr. Unsec. Gtd. Notes, 5.35%, 03/15/12		400,000		403,000
Diversified Banks–1.42%
Abbey National Treasury Services PLC (United Kingdom), Sr. Unsec. Gtd. Global Notes,
2.88%, 04/25/14		155,000		144,547
4.00%, 04/27/16		230,000		207,226
Sr. Unsec. Gtd. Medium-Term Euro Notes, 3.88%, 11/10/14(d)		310,000		292,495
Ally Financial, Inc., Gtd. Notes, 2.20%, 12/19/12		550,000		560,710
Bank of Nova Scotia (Canada), Sr. Unsec. Global Notes, 2.38%, 12/17/13		395,000		406,003
Barclays Bank PLC (United Kingdom), Sr. Unsec. Global Notes,
5.13%, 01/08/20		60,000		61,774
6.75%, 05/22/19		510,000		566,606
Unsec. Sub. Global Notes, 5.14%, 10/14/20		275,000		238,242
BPCE S.A. (France), Sr. Unsec. Notes, 2.38%, 10/04/13(d)		390,000		378,147
Citibank N.A., Sr. Unsec. Gtd. Notes, 1.75%, 12/28/12		1,500,000		1,522,451
Commonwealth Bank of Australia (Australia), Sr. Unsec. Notes, 5.00%, 10/15/19(d)		320,000		338,171
Credit Suisse AG (Switzerland), Sub. Global Notes, 5.40%, 01/14/20		560,000		526,200
Unsec. Sub. Global Notes, 6.00%, 02/15/18		75,000		74,201
Danske Bank A/S (Denmark), Sr. Unsec. Notes, 3.88%, 04/14/16(d)		565,000		525,699
HBOS PLC (United Kingdom), Unsec. Sub. Medium-Term Global Notes, 6.75%, 05/21/18(d)		325,000		258,773
HSBC Bank PLC (United Kingdom), Sr. Unsec. Notes, 4.13%, 08/12/20(d)		565,000		564,744
HSBC Finance Corp., Sr. Unsec. Global Notes, 7.00%, 05/15/12		470,000		478,033
Korea Development Bank (The) (South Korea), Sr. Unsec. Global Notes, 4.38%, 08/10/15		200,000		206,067
Lloyds TSB Bank PLC (United Kingdom), Sr. Unsec. Gtd. Global Notes, 4.88%, 01/21/16		665,000		643,796
Sr. Unsec. Gtd. Medium-Term Notes, 5.80%, 01/13/20(d)		185,000		176,200
National Australia Bank Ltd. (Australia), Sr. Unsec. Bonds, 3.75%, 03/02/15(d)		190,000		194,940
Nordea Bank A.B. (Sweden), Sr. Unsec. Notes, 4.88%, 01/27/20(d)		245,000		256,382
Rabobank Nederland N.V. (Netherlands), Sr. Unsec. Medium-Term Global Notes, 4.75%, 01/15/20(d)		490,000		527,878
Royal Bank of Scotland PLC (The) (United Kingdom), Sr. Unsec. Gtd. Global Notes, 4.88%, 03/16/15		445,000		425,148
Santander U.S. Debt S.A. Unipersonal (Spain), Sr. Unsec. Gtd. Notes, 3.72%, 01/20/15(d)		200,000		183,475
Societe Generale S.A. (France), Sr. Unsec. Notes, 2.50%, 01/15/14(d)		705,000		651,692
Standard Chartered Bank (United Kingdom), Unsec. Sub. Notes, 6.40%, 09/26/17(d)		100,000		102,821
Standard Chartered PLC (United Kingdom), Sr. Unsec. Notes, 3.85%, 04/27/15(d)		255,000		257,479
5.50%, 11/18/14(d)		100,000		107,826
U.S. Bancorp., Sr. Unsec. Rate Notes, 2.00%, 06/14/13		530,000		538,711
U.S. Bank N.A., Sub. Variable Rate Notes, 3.78%, 04/29/20		450,000		463,612
Wells Fargo & Co., Sr. Unsec. Global Notes, 3.63%, 04/15/15		50,000		52,423
Sr. Unsec. Notes, 5.63%, 12/11/17		580,000		659,111
Westpac Banking Corp. (Australia), Sr. Unsec. Global Notes, 2.10%, 08/02/13		440,000		442,767
				13,034,350
Diversified Capital Markets–0.05%
Credit Suisse AG (Switzerland), Sr. Unsec. Medium-Term Global Notes, 5.30%, 08/13/19		170,000		175,294
UBS AG (Switzerland), Sr. Unsec. Global Notes, 5.88%, 12/20/17		250,000		259,490
				434,784
Diversified Metals & Mining–0.11%
Anglo American Capital PLC (United Kingdom), Sr. Unsec. Gtd. Notes, 9.38%, 04/08/19(d)		200,000		254,773
Freeport-McMoRan Copper & Gold Inc., Sr. Unsec. Notes, 8.38%, 04/01/17		350,000		370,562
Rio Tinto Finance USA Ltd. (Australia), Sr. Unsec. Gtd. Global Notes, 9.00%, 05/01/19		295,000		402,586
Southern Copper Corp., Sr. Unsec. Global Notes, 5.38%, 04/16/20		5,000		5,157
6.75%, 04/16/40		10,000		9,997
				1,043,075
Diversified Real Estate Activities–0.00%
Brookfield Asset Management, Inc. (Canada), Sr. Unsec. Notes, 7.13%, 06/15/12		20,000		20,462
Diversified REIT’s–0.13%
Dexus Diversified Trust/Dexus Office Trust (Australia), Sr. Unsec. Gtd. Notes, 5.60%, 03/15/21(d)		1,155,000		1,177,935

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
Diversified Support Services–0.06%
Cintas Corp. No. 2, Sr. Unsec. Gtd. Notes, 2.85%, 06/01/16	$	520,000	$	534,577
Drug Retail–0.05%
CVS Caremark Corp., Sec. Global Pass Through Ctfs., 6.04%, 12/10/28		379,293		399,230
Sec. Pass Through Ctfs., 8.35%, 07/10/31(d)		33,497		41,843
				441,073
Electric Utilities–0.16%
Electricite de France S.A. (France), Sr. Unsec. Notes, 4.60%, 01/27/20(d)		150,000		155,315
Enel Finance International N.V. (Luxembourg), Sr. Unsec. Gtd. Notes, 5.13%, 10/07/19(d)		425,000		382,067
Iberdola Finance Ireland Ltd. (Ireland), Unsec. Gtd. Unsub. Notes, 3.80%, 09/11/14(d)		200,000		199,928
Louisville Gas & Electric Co., Sec. First Mortgage Global Bonds, 1.63%, 11/15/15		405,000		407,753
Ohio Power Co., Series M, Sr. Unsec. Notes, 5.38%, 10/01/21		200,000		229,252
PPL Electric Utilities Corp., Sec. First Mortgage Bonds, 6.25%, 05/15/39		50,000		67,631
Virginia Electric & Power Co., Sr. Unsec. Notes, 5.00%, 06/30/19		15,000		17,335
				1,459,281
Electronic Components–0.01%
Corning, Inc., Sr. Unsec. Notes, 6.63%, 05/15/19		35,000		42,447
7.25%, 08/15/36		60,000		71,924
				114,371
Environmental & Facilities Services–0.05%
Waste Management, Inc., Sr. Unsec. Gtd. Notes, 5.00%, 03/15/14		395,000		425,113
Food Retail–0.08%
Delhaize Group S.A. (Belgium), Sr. Unsec. Gtd. Bonds, 5.88%, 02/01/14		180,000		194,915
Safeway, Inc., Sr. Unsec. Global Notes, 3.95%, 08/15/20		500,000		497,064
				691,979
Gold–0.11%
Barrick Gold Corp. (Canada), Sr. Unsec. Global Notes, 2.90%, 05/30/16		425,000		438,876
Gold Fields Orogen Holding BVI Ltd. (Mali), Sr. Unsec. Gtd. Notes, 4.88%, 10/07/20(d)		665,000		594,058
				1,032,934
Health Care Equipment–0.51%
Boston Scientific Corp., Sr. Unsec. Notes, 4.50%, 01/15/15		220,000		231,485
CareFusion Corp., Sr. Unsec. Global Notes, 4.13%, 08/01/12		330,000		335,205
NuVasive Inc., Sr. Unsec. Conv. Notes, 2.75%, 07/01/17		1,104,000		810,060
Teleflex Inc., Sr. Unsec. Sub. Conv. Notes, 3.88%, 08/01/17		2,736,000		3,303,720
				4,680,470
Health Care Facilities–0.46%
Lifepoint Hospitals Inc., Sr. Unsec. Sub. Conv. Notes, 3.50%, 05/15/14		4,141,000		4,254,878
Health Care Services–0.48%
Express Scripts, Inc., Sr. Unsec. Gtd. Global Notes,
5.25%, 06/15/12		925,000		942,389
6.25%, 06/15/14		70,000		76,339
Sr. Unsec. Gtd. Notes, 3.13%, 05/15/16		300,000		302,529
Medco Health Solutions Inc., Sr. Unsec. Notes, 2.75%, 09/15/15		220,000		221,225
Omnicare, Inc., Sr. Unsec. Gtd. Sub. Conv. Notes, 3.75%, 12/15/25		971,000		1,354,545
Series OCR, Sr. Unsec. Gtd. Conv. Deb., 3.25%, 12/15/15(c)		1,625,000		1,499,062
				4,396,089
Hotels, Resorts & Cruise Lines–0.41%
Gaylord Entertainment Co., Sr. Unsec. Gtd. Conv. Notes, 3.75%, 10/01/14(d)		2,778,000		3,104,415
Hyatt Hotels Corp., Sr. Unsec. Notes, 5.75%, 08/15/15(d)		70,000		75,369
Wyndham Worldwide Corp., Sr. Unsec. Notes, 5.63%, 03/01/21		580,000		600,300
7.38%, 03/01/20		20,000		22,813
				3,802,897
Housewares & Specialties–0.07%
Tupperware Brands Corp., Sr. Unsec. Gtd. Notes, 4.75%, 06/01/21(d)		605,000		610,689
Hypermarkets & Super Centers–0.01%
Wal-Mart Stores, Inc., Sr. Unsec. Global Notes, 6.50%, 08/15/37		50,000		69,367

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
Industrial Conglomerates–0.54%
General Electric Capital Corp.,
Sr. Unsec. Medium-Term Global Notes, 4.65%, 10/17/21	$	430,000	$	449,629
Series G, Sr. Gtd. Medium-Term Global Notes, 2.63%, 12/28/12		3,450,000		3,533,236
Sr. Unsec. Gtd. Medium-Term Global Notes, 2.20%, 06/08/12		80,000		80,702
Sr. Unsec. Medium-Term Notes, 6.00%, 08/07/19		300,000		344,440
General Electric Co., Sr. Unsec. Global Notes, 5.25%, 12/06/17		485,000		558,485
Koninklije Philips Electronics N.V. (Netherlands), Sr. Unsec. Global Notes, 5.75%, 03/11/18		25,000		28,688
				4,995,180
Industrial Machinery–0.11%
Pentair, Inc., Sr. Unsec. Gtd. Notes, 5.00%, 05/15/21		950,000		1,009,993
Integrated Oil & Gas–0.04%
Hess Corp., Sr. Unsec. Global Notes, 5.60%, 02/15/41		195,000		220,973
Shell International Finance B.V. (Netherlands), Sr. Unsec. Gtd. Global Notes, 3.10%, 06/28/15		115,000		123,360
				344,333
Integrated Telecommunication Services–0.25%
AT&T Corp., Sr. Unsec. Gtd. Global Notes, 8.00%, 11/15/31		4,000		5,666
AT&T, Inc., Sr. Unsec. Global Notes, 2.50%, 08/15/15		20,000		20,742
5.35%, 09/01/40		101,000		113,674
6.15%, 09/15/34		140,000		167,305
Deutsche Telekom International Finance B.V. (Netherlands), Sr. Unsec. Gtd. Global Bonds, 8.75%, 06/15/30		155,000		216,626
Telecom Italia Capital S.A. (Luxembourg), Sr. Unsec. Gtd. Global Notes, 7.00%, 06/04/18		520,000		482,505
Verizon Communications, Inc., Sr. Unsec. Global Notes, 3.00%, 04/01/16		230,000		242,576
4.75%, 11/01/41		210,000		227,965
6.35%, 04/01/19		260,000		321,226
8.95%, 03/01/39		300,000		482,854
Windstream Georgia Communications Corp., Sr. Unsec. Notes, 6.50%, 11/15/13		39,000		39,993
				2,321,132
Internet Retail–0.06%
Expedia Inc., Sr. Unsec. Gtd. Global Notes, 5.95%, 08/15/20		505,000		510,786
Investment Banking & Brokerage–0.84%
Charles Schwab Corp. (The), Sr. Unsec. Notes, 4.45%, 07/22/20		510,000		544,997
Goldman Sachs Group, Inc. (The), Series C, Exchangeable Basket-Linked Medium-Term Notes, 1.00%, 03/15/17(d)(k)		3,328,000		2,948,874
Sr. Unsec. Global Notes, 3.70%, 08/01/15		65,000		63,684
5.25%, 07/27/21		400,000		391,965
6.15%, 04/01/18		905,000		931,142
Unsec. Sub. Global Notes, 6.75%, 10/01/37		385,000		362,038
Jefferies Group, Inc., Sr. Unsec. Notes, 6.88%, 04/15/21		440,000		399,300
Macquarie Group Ltd. (Australia), Sr. Unsec. Notes, 6.00%, 01/14/20(d)		50,000		47,199
Morgan Stanley, Sr. Unsec. Global Notes,
3.80%, 04/29/16		700,000		646,385
4.00%, 07/24/15		610,000		573,433
Sr. Unsec. Notes, 3.45%, 11/02/15		715,000		657,672
5.75%, 01/25/21		220,000		204,901
				7,771,590
Life & Health Insurance–0.17%
Aegon N.V. (Netherlands), Sr. Unsec. Global Bonds, 4.63%, 12/01/15		275,000		284,948
MetLife, Inc., Sr. Unsec. Global Notes, 4.75%, 02/08/21		410,000		443,701
Pacific LifeCorp., Sr. Unsec. Notes, 6.00%, 02/10/20(d)		215,000		230,948
Prudential Financial, Inc., Series D, Sr. Unsec. Disc. Medium-Term Notes, 4.75%, 09/17/15		255,000		269,990
Sr. Unsec. Medium-Term Notes, 3.88%, 01/14/15		50,000		51,788
6.63%, 12/01/37		110,000		119,988
7.38%, 06/15/19		105,000		125,094
				1,526,457
Life Sciences Tools & Services–0.34%
Life Technologies Corp., Sr. Unsec. Conv. Notes, 1.50%, 02/15/12(c)		3,143,000		3,158,715
Managed Health Care–0.12%
Aetna, Inc., Sr. Unsec. Global Notes, 3.95%, 09/01/20		605,000		632,818
WellPoint, Inc., Sr. Unsec. Notes, 4.35%, 08/15/20		400,000		434,855
				1,067,673
Mortgage Backed Securities–0.01%
U.S. Bank N.A., Sr. Unsec. Medium-Term Notes, 5.92%, 05/25/12		59,456		60,645

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
Movies & Entertainment–0.34%
Liberty Media LLC, Sr. Unsec. Conv. Notes, 3.13%, 03/30/13(c)	$	2,627,200	$	2,952,316
Time Warner, Inc., Sr. Unsec. Gtd. Notes, 5.88%, 11/15/16		130,000		150,378
				3,102,694
Multi-Line Insurance–0.04%
CNA Financial Corp., Sr. Unsec. Global Bonds, 5.88%, 08/15/20		325,000		337,091
Liberty Mutual Group Inc., Sr. Unsec. Notes, 5.75%, 03/15/14(d)		45,000		47,103
				384,194
Multi-Utilities–0.02%
Nisource Finance Corp., Sr. Unsec. Gtd. Bonds, 6.80%, 01/15/19		115,000		134,656
Office Electronics–0.00%
Xerox Corp., Sr. Unsec. Notes, 4.25%, 02/15/15		40,000		42,273
Office REIT’s–0.04%
Digital Realty Trust L.P., Sr. Unsec. Gtd. Global Notes, 4.50%, 07/15/15		335,000		341,918
Oil & Gas Equipment & Services–0.13%
Helix Energy Solutions Group, Inc., Sr. Unsec. Conv. Notes, 3.25%, 12/15/12(c)		1,208,000		1,217,060
Oil & Gas Exploration & Production–0.05%
Petrobras International Finance Co. (Brazil), Sr. Unsec. Gtd. Global Notes, 6.88%, 01/20/40		15,000		17,224
Petroleos Mexicanos (Mexico), Sr. Unsec. Gtd. Global Notes, 5.50%, 01/21/21		395,000		429,088
				446,312
Oil & Gas Storage & Transportation–0.10%
Enterprise Products Operating LLC, Sr. Unsec. Gtd. Global Notes, 5.25%, 01/31/20		115,000		127,305
Sr. Unsec. Gtd. Notes, 6.45%, 09/01/40		25,000		29,337
Series N, Sr. Unsec. Gtd. Notes, 6.50%, 01/31/19		245,000		286,338
Spectra Energy Capital LLC, Sr. Unsec. Gtd. Notes, 5.65%, 03/01/20		50,000		55,500
7.50%, 09/15/38		120,000		154,583
Texas Eastern Transmission L.P., Sr. Unsec. Notes, 7.00%, 07/15/32		185,000		235,307
				888,370
Other Diversified Financial Services–0.92%
Bank of America Corp., Sr. Unsec. Global Notes, 5.75%, 12/01/17		975,000		933,724
Series L, Sr. Unsec. Medium-Term Global Notes, 5.65%, 05/01/18		350,000		334,327
Bear Stearns Cos., LLC (The), Sr. Unsec. Global Notes, 7.25%, 02/01/18		340,000		398,692
Citigroup Funding, Inc., Unsec. Gtd. Unsub. Global Notes, 2.25%, 12/10/12		3,450,000		3,515,459
Citigroup, Inc.,
Sr. Unsec. Global Notes, 6.01%, 01/15/15		65,000		68,179
6.13%, 11/21/17		495,000		529,320
8.50%, 05/22/19		455,000		540,276
Sr. Unsec. Notes, 4.75%, 05/19/15		75,000		76,362
ERAC USA Finance LLC, Sr. Unsec. Gtd. Notes, 2.75%, 07/01/13(d)		340,000		344,228
General Electric Capital Corp., Sr. Unsec. Global Notes, 5.90%, 05/13/14		75,000		82,330
JPMorgan Chase & Co.,
Sr. Unsec. Global Notes, 4.40%, 07/22/20		400,000		401,681
4.75%, 05/01/13		65,000		67,993
Sr. Unsec. Notes, 6.00%, 01/15/18		615,000		688,460
Unsec. Sub. Global Notes, 5.13%, 09/15/14		70,000		73,885
Merrill Lynch & Co., Inc., Sr. Unsec. Medium-Term Notes, 6.88%, 04/25/18		410,000		405,104
Twin Reefs Pass-Through Trust, Sec. Floating Rate Pass Through Ctfs., 1.39% (Acquired 12/07/04; Cost $90,000)(d)(e)(f)(g)		90,000		0
				8,460,020
Packaged Foods & Meats–0.13%
Grupo Bimbo S.A.B. de C.V. (Mexico), Sr. Unsec. Gtd. Notes, 4.88%, 06/30/20(d)		270,000		284,700
Kraft Foods, Inc.,
Sr. Unsec. Global Notes,
5.38%, 02/10/20		215,000		248,385
7.00%, 08/11/37		305,000		407,565
Sr. Unsec. Notes, 6.88%, 01/26/39		200,000		264,618
				1,205,268
Paper Products–0.03%
International Paper Co., Sr. Unsec. Global Notes, 6.00%, 11/15/41		285,000		310,744
Pharmaceuticals–0.74%
Endo Pharmaceuticals Holdings Inc., Sr. Unsec. Sub. Conv. Notes, 1.75%, 04/15/15		2,398,000		3,150,372
GlaxoSmithKline Capital Inc., Sr. Unsec. Gtd. Global Bonds, 5.65%, 05/15/18		75,000		90,569
6.38%, 05/15/38		70,000		93,530
Merck & Co. Inc., Sr. Unsec. Global Notes, 5.00%, 06/30/19		280,000		330,848
Pfizer Inc., Sr. Unsec. Global Notes, 6.20%, 03/15/19		650,000		805,464
Salix Pharmaceuticals Ltd., Sr. Unsec. Conv. Notes, 2.75%, 05/15/15		1,835,000		2,383,206
				6,853,989

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
Property & Casualty Insurance–0.03%
CNA Financial Corp., Sr. Unsec. Notes, 7.35%, 11/15/19	$	25,000	$	27,905
Travelers Cos., Inc. (The), Sr. Unsec. Notes, 5.35%, 11/01/40		205,000		238,775
				266,680
Railroads–0.07%
CSX Corp., Sr. Unsec. Global Notes, 6.15%, 05/01/37		80,000		96,529
Sr. Unsec. Notes, 5.50%, 04/15/41		380,000		429,980
Union Pacific Corp., Sr. Unsec. Notes, 6.13%, 02/15/20		110,000		134,886
				661,395
Regional Banks–0.18%
Key Bank NA, Sr. Unsec. Gtd. Global Notes, 3.20%, 06/15/12		500,000		506,563
Nationwide Building Society (United Kingdom), Sr. Unsec. Notes, 6.25%, 02/25/20(d)		485,000		482,075
PNC Funding Corp.,
Sr. Unsec. Gtd. Global Notes, 3.63%, 02/08/15		40,000		42,192
5.13%, 02/08/20		360,000		407,861
Sr. Unsec. Gtd. Notes, 6.70%, 06/10/19		185,000		225,186
				1,663,877
Restaurants–0.04%
Yum! Brands, Inc., Sr. Unsec. Global Bonds, 6.25%, 03/15/18		110,000		128,989
Sr. Unsec. Notes, 5.30%, 09/15/19		175,000		196,836
				325,825
Retail REIT’s–0.03%
WEA Finance LLC, Sr. Unsec. Gtd. Notes, 7.13%, 04/15/18(d)		270,000		301,543
Semiconductor Equipment–0.18%
Novellus Systems Inc., Sr. Unsec. Conv. Notes, 2.63%, 05/15/41(d)		1,399,000		1,682,298
Semiconductors–0.74%
Linear Technology Corp., Sr. Unsec. Conv. Notes, 3.00%, 05/01/14(c)(d)		1,193,000		1,224,316
Series A, Sr. Unsec. Conv. Global Notes, 3.00%, 05/01/14(c)		1,481,000		1,519,877
Micron Technology Inc., Series A, Sr. Unsec. Conv. Notes, 1.50%, 08/01/18(c)(d)		2,106,000		1,900,665
Xilinx Inc., Jr. Unsec. Conv. Sub. Notes, 3.13%, 03/15/37		635,000		723,900
3.13%, 03/15/37(d)		1,302,000		1,484,280
				6,853,038
Sovereign Debt–0.05%
Brazilian Government International Bond (Brazil), Sr. Unsec. Global Bonds, 6.00%, 01/17/17		100,000		117,600
Peruvian Government International Bond (Peru), Sr. Unsec. Global Notes, 7.13%, 03/30/19		10,000		12,587
Republic of Italy (Italy), Sr. Unsec. Global Notes, 6.88%, 09/27/23		320,000		309,077
				439,264
Specialized REIT’s–0.05%
Senior Housing Properties Trust, Sr. Unsec. Notes, 4.30%, 01/15/16		495,000		486,028
Steel–0.18%
ArcelorMittal (Luxembourg), Sr. Unsec. Global Bonds, 9.85%, 06/01/19		446,000		494,472
Sr. Unsec. Global Notes, 3.75%, 08/05/15		585,000		556,374
5.50%, 03/01/21		85,000		78,226
6.13%, 06/01/18		15,000		15,270
6.75%, 03/01/41		85,000		76,538
7.00%, 10/15/39		40,000		37,133
Vale Overseas Ltd. (Brazil), Sr. Unsec. Gtd. Global Notes, 5.63%, 09/15/19		185,000		203,722
4.63%, 09/15/20		20,000		20,750
6.88%, 11/10/39		185,000		213,470
				1,695,955
Systems Software–0.24%
Symantec Corp., Class B, Sr. Unsec. Conv. Global Notes, 1.00%, 06/15/13		1,970,000		2,203,938
Technology Distributors–0.01%
Avnet Inc., Sr. Unsec. Notes, 5.88%, 06/15/20		50,000		53,017
Thrifts & Mortgage Finance–0.19%
MGIC Investment Corp., Sr. Unsec. Conv. Notes, 5.00%, 05/01/17		2,943,000		1,784,194
Tobacco–0.00%
Altria Group, Inc., Sr. Unsec. Gtd. Global Notes, 4.13%, 09/11/15		35,000		38,000
Trading Companies & Distributors–0.00%
GATX Corp., Sr. Unsec. Notes, 4.75%, 10/01/12		20,000		20,375
Trucking–0.03%
Ryder System, Inc., Sr. Unsec. Medium-Term Notes, 3.15%, 03/02/15		280,000		287,684

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
Wireless Telecommunication Services–0.48%
America Movil S.A.B. de C.V. (Mexico), Unsec. Gtd. Unsub. Global Notes, 2.38%, 09/08/16	$	255,000	$	252,125
American Tower Corp., Sr. Unsec. Global Notes, 4.63%, 04/01/15		170,000		178,108
Sr. Unsec. Notes, 4.50%, 01/15/18		320,000		326,569
Crown Castle Towers LLC, Sr. Sec. Gtd. Notes, 3.21%, 08/15/15(d)		370,000		375,550
SBA Communications Corp., Sr. Unsec. Conv. Notes, 1.88%, 05/01/13		2,909,000		3,298,078
				4,430,430
Total Bonds and Notes (Cost $162,727,020)				167,411,553
U.S. Treasury Securities–8.01%
U.S. Treasury Bills–0.12%
0.75%, 05/31/12(h)		800,000		802,258
0.00%, 11/15/12(h)(i)		340,000		339,744
				1,142,002
U.S. Treasury Notes–5.18%
0.88%, 02/29/12		500,000		500,625
1.00%, 04/30/12		400,000		401,254
1.38%, 09/15/12		1,700,000		1,714,941
1.50%, 12/31/13		1,085,000		1,111,955
1.75%, 03/31/14		2,300,000		2,375,469
2.63%, 07/31/14		1,100,000		1,164,625
2.38%, 10/31/14		15,720,000		16,606,706
2.13%, 11/30/14		5,250,000		5,514,961
2.25%, 01/31/15		6,000,000		6,338,438
2.50%, 03/31/15		275,000		293,262
2.13%, 05/31/15		680,000		717,931
2.25%, 03/31/16		2,000,000		2,133,750
2.63%, 04/30/16		2,000,000		2,163,750
4.00%, 08/15/18		3,055,000		3,598,217
3.63%, 08/15/19		1,525,000		1,766,379
3.38%, 11/15/19		300,000		342,047
3.63%, 02/15/20		46,000		53,353
2.63%, 11/15/20		600,000		646,125
2.13%, 08/15/21		175,000		179,457
3.88%, 08/15/40		20,000		23,956
				47,647,201
U.S. Treasury Bonds–2.71%
8.13%, 08/15/21		2,700,000		4,229,297
6.63%, 02/15/27		2,500,000		3,847,656
5.38%, 02/15/31		8,995,000		12,824,903
4.25%, 05/15/39		805,000		1,023,356
4.50%, 08/15/39		40,000		52,856
4.63%, 02/15/40		250,000		336,914
4.38%, 05/15/40		80,000		103,850
4.25%, 11/15/40		2,000,000		2,548,750
				24,967,582
Total U.S. Treasury Securities (Cost $66,209,634)				73,756,785
	Shares
Preferred Stocks–1.60%
Health Care Facilities–0.17%
HealthSouth Corp., Series A, $65.00 Conv. Pfd.		1,785		1,566,784
Health Care Services–0.13%
Omnicare Capital Trust II, Series B, $2.00 Conv. Pfd.		26,407		1,196,765
Multi-Utilities–0.23%
CenterPoint Energy, Inc., $1.88 Conv. Pfd.		62,215		2,134,752
Oil & Gas Storage & Transportation–0.48%
El Paso Energy Captial Trust I, $2.38 Conv. Pfd		95,499		4,396,774
Regional Banks–0.35%
KeyCorp, Series A, $7.75 Conv. Pfd.		30,290		3,199,836
Research & Consulting Services–0.05%
Nielsen Holdings N.V. (Netherlands), $3.13 Conv. Pfd.		7,510		436,049
Trucking–0.19%
2010 Swift Mandatory Common Exchange Security Trust, $0.66 Conv. Pfd.(d)		199,220		1,756,363
Total Preferred Stocks (Cost $12,665,371)				14,687,323
	Principal
	Amount
U.S. Government Sponsored Agency Securities–0.81%
Federal Home Loan Mortgage Corp. (FHLMC)–0.59%
Sr. Unsec. Global Bonds, 6.75%, 03/15/31	$	750,000		1,130,493
Sr. Unsec. Global Notes,
3.00%, 07/28/14		1,020,000		1,084,621
5.00%, 04/18/17		1,500,000		1,786,575
5.50%, 08/23/17		140,000		171,535
Unsec. Global Notes, 4.88%, 06/13/18		1,000,000		1,207,614
				5,380,838

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
Federal National Mortgage Association (FNMA)–0.22%
Sr. Unsec. Global Notes, 4.38%, 10/15/15	$	1,700,000	$	1,922,832
Unsec. Global Notes, 2.63%, 11/20/14		130,000		137,619
				2,060,451
Total U.S. Government Sponsored Agency Securities (Cost $6,725,898)				7,441,289
Municipal Obligation–0.03%
Texas (State of) Transportation Commission; Series 2010 B, Taxable First Tier Build America RB, 5.03%, 04/01/26 (Cost $240,000)		240,000		280,277
Asset-Backed Securities–0.00%
Countrywide Asset-Backed Ctfs., Series 2007-4, Class A1B, Pass Through Ctfs., 5.81%, 09/25/37 (Cost $20,717)		21,140		20,763
U.S. Government Sponsored Mortgage-Backed Securities–0.00%
Federal Home Loan Mortgage Corp. (FHLMC)–0.00%
Pass Through Ctfs., 6.50%, 02/01/26		6,267		7,093
5.50%, 02/01/37		589		640
				7,733
Federal National Mortgage Association (FNMA)–0.00%
Pass Through Ctfs., 6.00%, 01/01/17		1,483		1,604
5.50%, 03/01/21		600		652
8.00%, 08/01/21		5,019		5,672
9.50%, 04/01/30		11,520		13,791
				21,719
Total U.S. Government Sponsored Mortgage-Backed Securities (Cost $27,082)				29,452
	Shares
Money Market Funds–8.42%
Liquid Assets Portfolio–Institutional Class(j)		38,771,398		38,771,398
Premier Portfolio–Institutional Class(j)		38,771,397		38,771,397
Total Money Market Funds (Cost $77,542,795)				77,542,795
TOTAL INVESTMENTS–99.55% (Cost $855,694,334)				916,650,169
OTHER ASSETS LESS LIABILITIES–0.45%				4,119,123
NET ASSETS–100.00%			$	920,769,292

Investment Abbreviations:

ADR	– American Depositary Receipt
Ctfs.	– Certificates
Deb.	– Debentures
ETF	– Exchange-Traded Fund
Gtd.	– Guaranteed
Jr.	– Junior
Pfd.	– Preferred
RB	– Revenue Bonds
REIT	– Real Estate Investment Trust
Sec.	– Secured
SPDR	– Standard & Poor’s Depositary Receipt
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 has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put.
(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, 2011 was $27,291,795, which represented 2.96% of the Fund’s Net Assets.
(e)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on December 31, 2011.
(f)	Perpetual bond with no specified maturity date.
(g)	Defaulted security. Currently, the issuer is partially or fully in default with respect to interest payments. The value of this security at December 31, 2011 represented 0.00% of the Fund’s Net Assets.
(h)	Security traded on a discount basis. The interest rate shown represents the discount rate at the time of purchase by the Fund.
(i)	All or a portion of the value was pledged as collateral to cover margin requirements for open future contracts. See Note 1K and Note 4.
(j)	The money market fund and the Fund are affiliated by having the same investment adviser.
(k)	Exchangeable for a basket of four common stocks and one ordinary share.

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, 2011

Assets:
Investments, at value (Cost $778,151,539)	$	839,107,374
Investments in affiliated money market funds, at value and cost		77,542,795
Total investments, at value (Cost $855,694,334)		916,650,169
Receivable for:
Investments sold		689,048
Fund shares sold		470,500
Dividends and interest		3,489,270
Foreign currency contracts outstanding		804,281
Investment for trustee deferred compensation and retirement plans		43,682
Other assets		353
Total assets		922,147,303
Liabilities:
Payable for:
Investments purchased		197,787
Fund shares reacquired		207,869
Variation margin		35,312
Accrued fees to affiliates		786,293
Accrued other operating expenses		71,355
Trustee deferred compensation and retirement plans		79,395
Total liabilities		1,378,011
Net assets applicable to shares outstanding	$	920,769,292
Net assets consist of:
Shares of beneficial interest	$	903,438,850
Undistributed net investment income		14,245,911
Undistributed net realized gain (loss)		(58,357,895	)
Unrealized appreciation		61,442,426
	$	920,769,292
Net Assets:
Series I	$	56,052,931
Series II	$	864,716,361
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		4,107,283
Series II		63,423,964
Series I:
Net asset value per share	$	13.65
Series II:
Net asset value per share	$	13.63

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $173,888)	$	14,689,144
Dividends from affiliated money market funds		52,874
Interest		7,380,724
Total investment income		22,122,742
Expenses:
Advisory fees		3,489,069
Administrative services fees		2,285,988
Custodian fees		47,443
Distribution fees — Series II		2,124,156
Transfer agent fees		22,602
Trustees’ and officers’ fees and benefits		53,807
Other		25,988
Total expenses		8,049,053
Less: Fees waived		(1,770,715	)
Net expenses		6,278,338
Net investment income		15,844,404
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		6,739,566
Foreign currencies		(3,790	)
Foreign currency contracts		969,174
Futures contracts		(1,646,373	)
		6,058,577
Change in net unrealized appreciation (depreciation) of:
Investment securities		(41,894,394	)
Foreign currencies		(6	)
Foreign currency contracts		804,281
Futures contracts		(911,720	)
		(42,001,839	)
Net realized and unrealized gain (loss)		(35,943,262	)
Net increase (decrease) in net assets resulting from operations	$	(20,098,858	)

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, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	15,844,404		$	12,050,632
Net realized gain		6,058,577			23,430,319
Change in net unrealized appreciation (depreciation)		(42,001,839	)		48,708,386
Net increase (decrease) in net assets resulting from operations	��	(20,098,858	)		84,189,337
Distributions to shareholders from net investment income:
Series I		(166,703	)		—
Series II		(14,481,929	)		(13,994,794	)
Total distributions from net investment income		(14,648,632	)		(13,994,794	)
Share transactions–net:
Series I		61,606,856			44,483
Series II		93,450,310			57,438,806
Net increase in net assets resulting from share transactions		155,057,166			57,483,289
Net increase in net assets		120,309,676			127,677,832
Net assets:
Beginning of year		800,459,616			672,781,784
End of year (includes undistributed net investment income of $14,245,911 and $12,043,490, respectively)	$	920,769,292		$	800,459,616

Notes to Financial Statements

December 31, 2011

NOTE 1—Significant Accounting Policies

Invesco Van Kampen V.I. Equity 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 twenty-eight 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 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. 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”).

Invesco Van Kampen V.I. Equity and Income 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.
	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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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

Invesco Van Kampen V.I. Equity and Income 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.
K.	Futures Contracts — The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund’s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities.
L.	Collateral — To the extent the Fund has 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 Daily Net Assets	Rate
First $150 million		0	.50%
Next $100 million		0	.45%
Next $100 million		0	.40%
Over $350 million		0	.35%

Invesco Van Kampen V.I. Equity and Income Fund

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

  The Adviser has contractually agreed, through at least June 30, 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 0.70% and Series II shares to 0.75% (after 12b-1 fee waivers) of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless 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.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $71,390.

  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, 2011, Invesco was paid $214,639 for accounting and fund administrative services and reimbursed $2,071,349 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, 2011, 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 Series II shares through at least June 30, 2012. 12b-1 fees before fee waivers incurred under the Plan are detailed in the Statement of Operations as distribution fees. For the year ended December 31, 2011, 12b-1 fees incurred for Series II shares were $424,831 after fee waivers of $1,699,325.

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

NOTE 3—Additional Valuation Information

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

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

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1			Level 2		Level 3		Total
Equity Securities	$	659,251,366		$	8,458,684	$	—	$	667,710,050
U.S. Treasury Securities		—			73,756,785		—		73,756,785
U.S. Government Sponsored Securities		—			7,470,741		—		7,470,741
Corporate Debt Securities		—			166,972,289		0		166,972,289
Asset Backed Securities		—			20,763		—		20,763
Municipal Obligations		—			280,277		—		280,277
Foreign Government Debt Securities		—			439,264		—		439,264
	$	659,251,366		$	257,398,803	$	0	$	916,650,169
Foreign Currency Contracts*		—			804,281		—		804,281
Futures*		(317,689	)		—		—		(317,689	)
Total Investments	$	658,933,677		$	258,203,084	$	0	$	917,136,761

*  Unrealized appreciation (depreciation).

NOTE 4—Derivative Investments

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, 2011:

	Value
Risk Exposure/Derivative Type	Assets		Liabilities
Currency risk
Foreign currency contracts(a)	$	804,281	$	—
Interest rate risk
Futures contracts(b)	$	3,862	$	(321,551	)

(a)	Values are disclosed on the Statement of Assets and Liabilities under Foreign currency contracts outstanding.
(b)	Includes cumulative appreciation (depreciation) of futures contracts. Only current day’s variation margin receivable (payable) is reported within the Statement of Assets and Liabilities.

Effect of Derivative Instruments for the year ended December 31, 2011

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
	Futures*			Contracts*
Realized Gain (Loss)
Currency risk	$	—		$	969,174
Interest rate risk		(1,646,373	)		—
Change in Unrealized Appreciation (Depreciation)
Currency risk		—			804,281
Interest rate risk		(911,720	)		—
Total	$	(2,558,093	)	$	1,773,455

*  The average notional value of futures and foreign currency contracts outstanding during the period was $32,750,930 and $17,000,118, respectively.

Open Foreign Currency Contracts
Settlement		Contract to				Notional		Unrealized
Date	Counterparty	Deliver		Receive		Value		Appreciation
1/12/12	Bank of New York	EUR	10,794,240	USD	14,519,548	$	13,972,458	$	547,090
1/12/12	State Street CA	EUR	3,783,362	USD	5,089,833		4,897,322		192,511
1/12/12	State Street CA	GBP	5,403,528	USD	8,457,467		8,392,787		64,680
Total open foreign currency contracts								$	804,281

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

Invesco Van Kampen V.I. Equity and Income Fund

Open Futures Contracts
								Unrealized
	Number of		Expiration		Notional			Appreciation
Long Contracts	Contracts		Month		Value			(Depreciation)
U.S. Treasury 2 Year Notes		36		March-2012	$	7,939,688		$	3,862
Short Contracts
U.S. Treasury 5 Year Notes		78		March-2012		(9,614,109	)		(45,867	)
U.S. Treasury 10 Year Notes		39		March-2012		(5,113,875	)		(68,027	)
U.S. Treasury Long Bond		44		March-2012		(6,371,750	)		(207,657	)
Subtotal					$	(21,099,734	)	$	(321,551	)
Total								$	(317,689	)

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, 2011, the Fund engaged in securities purchases of $1,284,704.

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, 2011, the Fund paid legal fees of $2,143 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010:

	2011		2010
Ordinary income	$	14,648,632	$	13,994,794

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	17,916,603
Net unrealized appreciation — investments		54,942,677
Temporary book/tax differences		(79,248	)
Capital loss carryforward		(55,449,590	)
Shares of beneficial interest		903,438,850
Total net assets	$	920,769,292

  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, straddles and hybrid securities.

Invesco Van Kampen V.I. Equity and Income 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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. Under these limitation rules, the Fund is limited to utilizing $49,270,013 of capital loss carryforward in the fiscal year ending December 31, 2012.

  The Fund utilized $5,015,717 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, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term		Long-Term		Total
December 31, 2015	$	1,901,861	$	—	$	1,901,861
December 31, 2016		6,050,182		—		6,050,182
December 31, 2017		47,497,547		—		47,497,547
	$	55,449,590	$	—	$	55,449,590

*  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 2, 2011, the date of reorganization of Invesco V.I. Basic Balanced Fund, Invesco V.I. Income Builder Fund and Invesco V.I. Select Dimensions Balanced Fund into the Fund and realized on securities held in each fund at such date of reorganization, 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, 2011 was $256,744,600 and $219,440,159, 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	$	91,692,362
Aggregate unrealized (depreciation) of investment securities		(36,749,685	)
Net unrealized appreciation of investment securities	$	54,942,677
Cost of investments for tax purposes is $861,707,492.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of income from hybrid securities and return of capital on December 31, 2011, undistributed net investment income was increased by $1,052,406, undistributed net realized gain (loss) was decreased by $826,480 and shares of beneficial interest decreased by $225,926.

  Further, as a result of tax deferrals acquired in the reorganization of Invesco V.I. Basic Balanced Fund, Invesco V.I. Income Builder Fund and Invesco V.I. Select Dimensions Fund into the Fund, undistributed net investment income was decreased by $45,757, undistributed net realized gain (loss) was decreased by $11,030,852 and shares of beneficial interest increased by $11,076,609. These reclassifications had no effect on the net assets of the Fund.

Invesco Van Kampen V.I. Equity and Income Fund

NOTE 11—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I(b)		166,964		$	2,254,649			3,269		$	44,487
Series II		10,464,491			146,470,102			9,140,570			119,604,678
Issued as reinvestment of dividends:
Series I		13,178			166,498			—			—
Series II		1,025,856			14,481,929			1,110,698			13,994,794
Issued in connection with acquistions:(c)
Series I		4,636,112			68,904,153			—			—
Series II		2,097,600			31,153,983			—			—
Reacquired:
Series I		(712,240	)		(9,718,444	)		—			(4	)
Series II		(7,121,326	)		(98,655,704	)		(5,846,609	)		(76,160,666	)
Net increase in share activity		10,570,635		$	155,057,166			4,407,928		$	57,483,289

(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 Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.
(b)	Commencement date of June 1, 2010.
(c)	As of the opening of business on May 2, 2011, the Fund acquired all the net assets of Invesco V.I. Basic Balanced Fund, Invesco V.I. Income Builder Fund and Invesco V.I. Select Dimensions Balanced Fund (the “Target Funds”) pursuant to a plan of reorganization approved by the Trustees of the Fund on November 10, 2010 and by the shareholders of the Target Funds on April 1, 2011. The acquisition was accomplished by a tax-free exchange of 6,733,712 shares of the Fund for 3,229,995, 2,847,069 and 2,619,937 shares outstanding of Invesco V.I. Basic Balanced Fund, Invesco V.I. Income Builder Fund and Invesco V.I. Select Dimensions Balanced Fund, respectively, as of the close of business on April 29, 2011. Each class of the Target Funds was exchanged for the like class of shares of the Fund based on the relative net asset value of the Target Funds to the net asset value of the Fund on the close of business, April 29, 2011. Invesco V.I. Basic Balanced Fund, Invesco V.I. Income Builder Fund and Invesco V.I. Select Dimensions Balanced Fund’s net assets at that date of $31,074,477, $31,415,511 and 37,568,148 including $4,748,360, 4,098,925 and 3,365,752 of unrealized appreciation, were combined with those of the Fund, respectively. The net assets of the Fund immediately before the acquisition were $883,038,141 and $983,096,277 immediately after the acquisition.
	The pro forma results of operations for the year ended December 31, 2011 assuming the reorganization had been completed on January 1, 2011, the beginning of the annual reporting period are as follows:

Net investment income	$	16,266,072
Net realized/unrealized gains (losses)		(29,988,355	)
Change in net assets resulting from operations		(13,722,283	)

The combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Target Funds that have been included in the Fund’s Statement of Operations since May 2, 2011.

Invesco Van Kampen V.I. Equity and Income Fund

NOTE 12—Financial Highlights

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

																											Ratio of			Ratio of
																											expenses			expenses
																											to average			to average						Ratio of
					Net gains																						net assets			net assets						rebate from
					(losses) on																						with fee			without			Ratio of net			Morgan
	Net asset				securities						Dividends			Distributions													waivers			fee waivers			investment			Stanley
	value,		Net		(both			Total from			from net			from net						Net asset					Net assets,		and/or			and/or			income to			Affiliates to
	beginning		investment		realized and			investment			investment			realized			Total			value, end		Total			end of period		expenses			expenses			average			average net			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			distributions			of period		return(b)			(000s omitted)		absorbed			absorbed			net assets			assets			turnover(c)
Series I
Year ended 12/31/11	$	14.06	$	0.25	$	(0.41	)	$	(0.16	)	$	(0.25	)	$	—		$	(0.25	)	$	13.65		(1.19	)%	$	56,053		0.66	%(d)		0.67	%(d)		1.83	%(d)		—	%		28	%
Year ended 12/31/10(e)		12.27		0.13		1.66			1.79			—			—			—			14.06		14.59			46		0.69	(j)		0.70	(j)		1.73	(j)		—			34
Series II
Year ended 12/31/11		14.05		0.25		(0.42	)		(0.17	)		(0.25	)		—			(0.25	)		13.63		(1.30	)		864,716		0.71	(d)		0.92	(d)		1.78	(d)		—			28
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			0.98			1.68			—			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

(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. For the period ending December 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $84,964,454 and sold of $24,142,395 in effect to realign the Fund’s portfolio holdings after the reorganization of Invesco V.I. Basic Balanced Fund, Invesco V.I. Income Builder Fund and Invesco V.I. Select Dimensions Balanced Fund into the Fund.
(d)	Ratios are based on average daily net assets (000’s omitted) of $40,072 and $849,662 for Series I and Series II shares, respectively.
(e)	Commencement date of June 1, 2010.
(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% and 2.01% for the years ended December 31, 2009 through December 31, 2007, respectively.
(h)	The Adviser reimbursed the Fund for losses incurred on derivative transactions which breached an investment guideline of the Fund 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%.
(j)	Annualized.

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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. 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 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	948.10	$	3.09	$	1,022.03	$	3.21		0.63	%
Series II		1,000.00		948.10		3.34		1,021.78		3.47		0.68

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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, 2011:

Federal and State Income Tax
Corporate Dividends Received Deduction*	58.92%
U.S. Treasury Obligations*	8.67%

*  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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco Van Kampen V.I. Equity and Income Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco Van Kampen V.I. Equity and Income Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco Van Kampen V.I. Equity and Income Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco Van Kampen V.I. Equity and Income Fund

Invesco Van Kampen V.I. Global Value
Equity Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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, 2011, Invesco Van Kampen V.I. Global Value Equity Fund underperformed the MSCI World Index and the Lipper VUF Global Core Funds Index. Stock selection during the volatile year was a hindrance to the Fund’s performance. Stock selection in the energy, health care, consumer staples and utilities sectors contributed to performance, while holdings in the financials, industrials, materials, information technology and consumer discretionary sectors detracted from performance during the reporting period.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	-10.89	%
Series II Shares	-11.12
MSCI World Index▼(Broad Market / Style-Specific Index)	-5.54
Lipper VUF Global Core Funds Index▼(Peer Group Index)	-7.88

Source: ^▼ Lipper Inc.

As noted in the Fund’s latest semiannual report, the Fund has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.

How we invest

The Fund invests primarily in stocks of mid- and large-cap global companies with records of stable earnings and strong balance sheets that are offering attractive valuations relative to the broad market and their peers. We take a bottom-up, research driven approach. We begin with a universe of global equities with greater than $1 billion in market capitalization and up to 10 years of financial statement information from both developed and emerging markets. 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

potential sustainability of company profitability. The most attractive stocks from the valuation screen, which have also passed rigorous fundamental research, are candidates for inclusion in the portfolio. At the portfolio level, we seek to achieve appropriate diversification relative to the MSCI World Index and we 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 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

Global equity markets faced headwinds in 2011. Notably, several southern European economies, including Greece, Spain, Portugal and Italy, faced solvency concerns amid massive fiscal deficits. Although the U.S. economy continued to grow in 2011, investors remained concerned about high unemployment and a still-weak housing market. The reporting period ended with a market upswing, as European leaders took steps to address the Greek sovereign debt issue and stabilize the region’s banking system.

     Market volatility was a common theme for the reporting period. The sovereign debt crisis intensified in the eurozone, and global growth slowed, prompting concerns of a global recession. Market volatility increased drastically due to civil unrest in the Middle East and northern Africa and a devastating earthquake and tsunami in Japan. Renewed credit problems overseas and the market correction that occurred during the summer months created a more uncertain environment which prompted many investors to favor relative safety over risk.

     In emerging market countries, investors grew risk-averse on news of potential defaults in Europe as well as slowing growth and accounting concerns in China. This led to a relatively indiscriminate correction in almost all emerging market countries. Unease about potential overheating in emerging market economies, coupled with the potential of a double-dip recession in developed economies, fostered uncertainty about the pace and vigor of a global economic recovery.

     The Fund stayed true to its process by adhering to its quality orientation in stock selection. Our stock selection in the energy, health care and consumer staples sectors made the largest contribution to

Portfolio Composition

By country

United States	39.8	%
Japan	12.9
United Kingdom	10.4
Switzerland	5.8
France	4.5
Germany	3.3
Australia	2.7
Spain	2.6
Norway	2.5
South Korea	2.2
Canada	2.0
Countries Each With
Less Than 2% of Portfolio	9.4
Money Market Funds Plus Other Assets Less Liabilities	1.9

Top 10 Equity Holdings*

1.	Imperial Tobacco Group PLC	2.8	%
2.	Royal Dutch Shell PLC-Class A	2.7
3.	Chevron Corp.	2.7
4.	ACE Ltd.	2.6
5.	Western Digital Corp.	2.4
6.	Coach, Inc.	2.2
7.	WellPoint Inc.	2.1
8.	Cisco Systems, Inc.	2.1
9.	ConocoPhillips	2.0
10.	General Dynamics Corp.	2.0

Top Five Industries

1. Integrated Oil & Gas	11.9	%
2. Diversified Banks	7.8
3. Pharmaceuticals	6.3
4. Integrated Telecommunication Services	5.0
5. Property & Casualty Insurance	4.0

Total Net Assets	$99.9 million
Total Number of Holdings*	108

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

the Fund’s relative performance. In the energy sector, oil and gas distributors Chevron and Royal Dutch Shell contributed to Fund performance. During the reporting period, Chevron completed its acquisition of Atlas Energy, a provider of natural gas gathering, processing and treating services.

     Holdings in several sectors, including financials and industrials, detracted from Fund performance for the year.

     In the financials sector, both Bank of America and French bank BNP Paribas hindered Fund performance. Fitch Ratings cut by one notch its long-term ratings on Bank of America and BNP Paribas at the end of the year. Fitch said that the financial market challenges the banks face “result from both economic developments as well as a myriad of regulatory changes.” Within the industrials sector, Fund holdings BHP Billiton and Yara International struggled, delivering negative performance for the year.

     From a geographic perspective, the Fund’s exposure to the U.K., Australia, Italy and Canada contributed to performance during the year. Conversely, our stock selection in the U.S., Hong Kong, Germany and Spain hurt Fund performance versus the style-specific benchmark. Additionally, exposure to non-benchmark areas such as emerging markets was a negative for the Fund during the reporting period.

     Shifts in sector and country weights, which were driven by our bottom-up stock selection approach, were relatively minor during the year. The Fund remained overweight in the energy and telecommunication services sectors relative to its style-specific index. The Fund remained underweight relative to the index in the industrials, information technology and utilities sectors.

     From a geographic perspective, the Fund maintained overweight exposure to Japan and significantly underweight exposure to the U.S., positions that were in place throughout 2011. The Fund’s underweight exposure to the U.S. was a detractor relative to the style-specific index during the year.

     At the end of the reporting period, many of the issues that plagued markets in 2011 remained unresolved and seemed likely to continue to contribute to high levels of volatility. In Europe, the sovereign debt crisis showed no signs of abating and appeared to have pushed economies in the region back into recession. While economic data remained more resilient in the U.S., overall growth clearly slowed across developed and emerging markets. That

said, corporate balance sheets were generally healthy and market valuations were attractive from a historical context. The Fund continued to find investment opportunities in this market environment, and our approach to building a diversified portfolio with above-average profitability characteristics and discounted valuations may position us favorably for the long term.

     We caution investors against making investment decisions based on short-term performance.

     We welcome any new investors who joined the Fund during the year, and we thank all of our shareholders 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 and 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, 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. 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 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(es)

Fund and index data from 12/31/01*

* During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

     As noted earlier in this report, the Fund has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer

group market measures. These additional benchmarks will now be included in the chart above.

Average Annual Total Returns
As of 12/31/11
Series I Shares
Inception (1/2/97)	3.52	%
10 Years	1.35
5 Years	-6.05
1 Year	-10.89
Series II Shares
10 Years	1.09	%
5 Years	-6.28
1 Year	-11.12

Effective June 1, 2010, Class I shares of the predecessor fund, Universal Funds Global Value Equity Portfolio, 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 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 1.10% 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. 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, 2011, 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

Depositary receipts risk. 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.

     Equity securities risk. In general, prices of equity securities are more volatile than those of fixed income securities. Investing in securities of small- and mid-sized companies involves greater risks than is customarily associated with investing in larger, more established companies.

     Value investing risk. 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.

     Foreign and emerging markets risks. 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.

     Futures risk. 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.

     Options risk. 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.

     Investing in real estate investment trusts (REITs) risks. Investing in REITs makes the Fund more susceptible to risks associated with the ownership of real estate and with the real estate industry in general. In addition, REITs depend upon specialized management skills, may not be diversified, may have less trading volume, and may be subject to more abrupt or erratic price movements than the overall securities markets. REITs must comply with certain requirements of the federal income tax law to maintain their federal income tax status. Investments in REITs may involve duplication of management fees and certain other expenses.

     Derivatives risk. Derivative transactions involve risks different from direct investments in underlying securities. 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.

     Small and mid-capitalization risk. 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.

     Swaps risk. 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. Swaps are subject to credit risk and counterparty risk.

About indexes used in this report

The MSCI World Index^SM is an unmanaged index considered representative of stocks of developed countries.

     The Lipper VUF Global Core Funds Index is an unmanaged index considered representative of global 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 Van Kampen V.I. Global Value Equity Fund

Schedule of Investments

December 31, 2011

	Shares		Value
Common Stocks & Other Equity Interests–96.28%
Australia–2.69%
Australia & New Zealand Banking Group Ltd.		44,352	$	929,442
Macquarie Group Ltd.		25,005		608,432
Telstra Corp. Ltd.		337,238		1,148,607
				2,686,481
Brazil–1.17%
Banco Santander Brasil S.A.(a)		26,900		215,569
Companhia Energetica de Minas Gerais–ADR(b)		13,468		239,596
PDG Realty S.A. Empreendimentos e Participacoes		63,600		201,007
Petroleo Brasileiro S.A.–ADR		11,631		289,030
Vale S.A.–ADR		10,171		218,168
				1,163,370
Canada–2.05%
Nexen Inc.		56,101		892,616
Toronto-Dominion Bank (The)		15,397		1,152,961
				2,045,577
China–1.14%
China Construction Bank Corp.–Class H		359,000		250,532
China Dongxiang Group Co.		586,000		99,596
China Minsheng Banking Corp., Ltd.–Class H		321,500		278,590
CNOOC Ltd.		133,000		232,552
KWG Property Holding Ltd.		232,500		78,432
Renhe Commercial Holdings Co., Ltd.		1,780,000		203,234
				1,142,936
France–4.53%
BNP Paribas S.A.		30,424		1,195,116
Bouygues S.A.		27,633		867,033
Sanofi		17,235		1,261,151
Total S.A.		23,515		1,200,275
				4,523,575
Germany–1.89%
Deutsche Lufthansa AG–Registered Shares		83,955		998,069
Salzgitter AG		17,687		884,329
				1,882,398
Hong Kong–1.23%
Cheung Kong (Holdings) Ltd.		73,000		864,963
China Mobile Ltd.		37,500		365,621
				1,230,584
Indonesia–0.13%
Telekomunikasi Indonesia Tbk PT		162,000		125,935
Ireland–0.23%
Dragon Oil PLC		32,319		229,810
Italy–1.09%
Eni S.p.A.		52,597		1,086,462
Japan–12.90%
Asahi Group Holdings, Ltd.		87,000		1,910,970
FUJIFILM Holdings Corp.		32,400		766,611
Mitsubishi Corp.		58,300		1,178,275
Mitsubishi UFJ Financial Group, Inc.		289,200		1,227,332
Nippon Telegraph & Telephone Corp.		34,600		1,757,896
Nippon Yusen Kabushiki Kaisha		324,000		829,581
Nissan Motor Co., Ltd.		202,000		1,813,769
Seven & I Holdings Co., Ltd.		37,900		1,056,609
Sumitomo Chemical Co., Ltd.		256,000		934,962
Yamada Denki Co., Ltd.		20,610		1,403,644
				12,879,649
Mexico–0.22%
America Movil S.A.B. de C.V.–Series L		196,300		222,064
Netherlands–1.17%
Unilever N.V.		34,138		1,172,395
Norway–2.54%
Statoil A.S.A.		43,065		1,103,049
Yara International A.S.A.		35,760		1,435,064
				2,538,113
Poland–0.15%
KGHM Polska Miedz S.A.		4,805		152,918
Russia–0.66%
Gazprom OAO–ADR		16,444		175,293
JSFC Sistema, REGS-GDR(c)		8,733		146,152
Magnitogorsk Iron & Steel Works, REGS-GDR(c)		23,624		114,978
Rosneft Oil Co., REGS-GDR(c)		33,417		220,552
				656,975
South Africa–1.02%
Sasol Ltd.		5,329		254,419
Standard Bank Group Ltd.		18,953		231,298
Steinhoff International Holdings Ltd.		91,913		260,890
Tiger Brands Ltd.		8,870		275,128
				1,021,735
South Korea–2.16%
Dongbu Insurance Co., Ltd.		5,255		243,496
Hyundai Mipo Dockyard Co., Ltd.		2,097		204,655

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
South Korea–(continued)
Hyundai Mobis		1,332		$	337,493
KT&G Corp.		3,631			256,465
POSCO		787			260,660
Samsung Electronics Co., Ltd.		493			452,596
Shinhan Financial Group Co., Ltd.		5,974			206,054
SK Telecom Co., Ltd.–ADR		14,460			196,801
					2,158,220
Spain–2.59%
Banco Santander S.A.		110,078			831,709
Iberdrola S.A.		150,431			938,127
Telefonica S.A.		47,355			817,273
					2,587,109
Switzerland–5.77%
ACE Ltd.		37,608			2,637,073
Holcim Ltd., Registered Shares(d)		16,925			905,538
Swisscom AG, Registered Shares		3,046			1,151,745
Zurich Financial Services AG		4,719			1,065,736
					5,760,092
Taiwan–0.70%
AU Optronics Corp.–ADR		24,386			105,348
Coretronic Corp		121,000			81,921
HTC Corp.		9,038			148,350
Powertech Technology Inc.		107,300			227,152
Wistron Corp.		105,000			132,988
					695,759
Thailand–0.38%
Bangkok Bank Public Co., Ltd.–NVDR		53,200			258,670
PTT PCL/Foreign		11,500			115,837
					374,507
Turkey–0.11%
Asya Katilim Bankasi A.S.(d)		135,217			113,305
United Kingdom–10.36%
Barclays PLC		316,574	��		857,810
BHP Billiton PLC		57,205			1,663,726
Eurasian Natural Resources Corp.		20,801			203,971
GlaxoSmithKline PLC		48,133			1,097,841
Imperial Tobacco Group PLC		73,644			2,785,606
National Grid PLC		105,852			1,027,691
Royal Dutch Shell PLC–Class A		73,704			2,710,252
					10,346,897
United States–39.40%
3M Co.		14,664			1,198,489
Apache Corp.		10,211			924,912
Archer-Daniels-Midland Co.		67,111			1,919,375
Bank of America Corp.		109,812			610,555
Bank of New York Mellon Corp. (The)		39,586			788,157
Best Buy Co., Inc.		42,688			997,619
Chevron Corp.		25,283			2,690,111
Cisco Systems, Inc.		112,933			2,041,829
Coach, Inc.		35,530			2,168,751
ConocoPhillips		27,899			2,033,000
Corning Inc.		99,964			1,297,533
CVS Caremark Corp.		38,006			1,549,885
Energen Corp.		24,337			1,216,850
GameStop Corp.–Class A(b)(d)		51,826			1,250,561
General Dynamics Corp.		29,787			1,978,155
Gilead Sciences, Inc.(d)		28,184			1,153,570
Johnson & Johnson		30,012			1,968,187
Merck & Co., Inc.		52,150			1,966,055
Microsoft Corp.		41,446			1,075,938
Oracle Corp.		64,016			1,642,010
PNC Financial Services Group, Inc.		18,778			1,082,927
Stryker Corp.		19,765			982,518
Valero Energy Corp.		53,810			1,132,700
W. R. Berkley Corp.		32,768			1,126,892
WellPoint Inc.		32,318			2,141,068
Western Digital Corp.(d)		77,968			2,413,110
					39,350,757
Total Common Stocks & Other Equity Interests (Cost $94,933,671)					96,147,623
Preferred Stocks–1.46%
Germany–1.46%
Porsche Automobil Holding SE -1.04% Pfd. (Cost $1,396,754)		27,165			1,453,852
Investment Companies–Exchange Traded Funds–0.40%
United States–0.40%
WisdomTree India Earnings Fund (Cost $604,796)		25,900			404,040
Money Market Funds–2.13%
Liquid Assets Portfolio–Institutional Class(e)		1,065,039			1,065,039
Premier Portfolio–Institutional Class(e)		1,065,039			1,065,039
Total Money Market Funds (Cost $2,130,078)					2,130,078
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–100.27% (Cost $99,065,299)					100,135,593

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
Investments Purchased with Cash Collateral from Securities on Loan
Investments Purchased with Cash Collateral from Securities on Loan–1.14%
Liquid Assets Portfolio–Institutional Class (Cost $1,135,670)(e)(f)		1,135,670	$	1,135,670
TOTAL INVESTMENTS–101.41% (Cost $100,200,969)				101,271,263
OTHER ASSETS LESS LIABILITIES–(1.41%)				(1,403,995	)
NET ASSETS–100.00%			$	99,867,268

Investment Abbreviations:

ADR	– American Depositary Receipt
GDR	– Global Depositary Receipt
NVDR	– Non-Voting Depositary Receipt
Pfd.	– Preferred
REGS	– Regulation S

Notes to Schedule of Investments:

(a)	Each unit represents one ordinary share and two preferred shares.
(b)	All or a portion of this security was out on loan at December 31, 2011.
(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 at December 31, 2011 was $391,682 which represented less than 1% of the Fund’s Net Assets.
(d)	Non-income producing security.
(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. Global Value Equity Fund

Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $96,935,221)*	$	98,005,515
Investments in affiliated money market funds, at value and cost		3,265,748
Total investments, at value (Cost $100,200,969)		101,271,263
Foreign currencies, at value (Cost $54,952)		54,644
Receivable for:
Fund shares sold		17,224
Dividends		167,653
Investment for trustee deferred compensation and retirement plans		8,248
Total assets		101,519,032
Liabilities:
Payable for:
Fund shares reacquired		97,256
Collateral upon return of securities loaned		1,135,670
Accrued fees to affiliates		284,448
Accrued other operating expenses		122,685
Trustee deferred compensation and retirement plans		11,705
Total liabilities		1,651,764
Net assets applicable to shares outstanding	$	99,867,268
Net assets consist of:
Shares of beneficial interest	$	128,008,316
Undistributed net investment income		2,339,630
Undistributed net realized gain (loss)		(31,550,782	)
Unrealized appreciation		1,070,104
	$	99,867,268
Net Assets:
Series I	$	78,124,895
Series II	$	21,742,373
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		11,493,506
Series II		3,202,864
Series I:
Net asset value per share	$	6.80
Series II:
Net asset value per share	$	6.79

*  At December 31, 2011, securities with an aggregate value of $1,101,691 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $191,230)	$	3,235,084
Dividends from affiliated money market funds (includes securities lending income of $68,362)		69,749
Total investment income		3,304,833
Expenses:
Advisory fees		602,725
Administrative services fees		236,330
Custodian fees		76,282
Distribution fees — Series II		38,286
Transfer agent fees		9,695
Trustees’ and officers’ fees and benefits		18,071
Other		(46,399	)
Total expenses		934,990
Less: Fees waived		(23,206	)
Net expenses		911,784
Net investment income		2,393,049
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities (net of tax on sale of foreign investments of $3,422)		(326,114	)
Foreign currencies (net of foreign taxes of $12,112)		(29,347	)
		(355,461	)
Change in net unrealized appreciation (depreciation) of:
Investment securities (net of change in estimated tax on foreign investments held of $3,160)		(21,928,120	)
Foreign currencies		(8,800	)
		(21,936,920	)
Net realized and unrealized gain (loss)		(22,292,381	)
Net increase (decrease) in net assets resulting from operations	$	(19,899,332	)

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, 2011 and December 31, 2010

	2011			2010
Operations:
Net investment income	$	2,393,049		$	875,486
Net realized gain (loss)		(355,461	)		2,174,772
Change in net unrealized appreciation (depreciation)		(21,936,920	)		1,296,804
Net increase (decrease) in net assets resulting from operations		(19,899,332	)		4,347,062
Distributions to shareholders from net investment income:
Series I		(1,439,970	)		(823,810	)
Series II		(353	)		—
Total distributions from net investment income		(1,440,323	)		(823,810	)
Share transactions–net:
Series I		49,857,625			(4,776,026	)
Series II		26,620,164			10,000
Net increase (decrease) in net assets resulting from share transactions		76,477,789			(4,766,026	)
Net increase (decrease) in net assets		55,138,134			(1,242,774	)
Net assets:
Beginning of year		44,729,134			45,971,908
End of year (includes undistributed net investment income of $2,339,630 and $1,425,720, respectively)	$	99,867,268		$	44,729,134

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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 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”).
	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. Global Value 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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. Global Value 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 affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
	The Fund may invest in foreign securities which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable.
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 Daily 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%

Invesco Van Kampen V.I. Global Value Equity Fund

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

  Effective May 2, 2011, 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. Prior to May 2, 2011, the Adviser 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 to (excluding certain items discussed below) on Series I shares to 1.15% and Series II shares to 1.40%. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless 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.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $23,206.

  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, 2011, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $186,330 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, Invesco Ltd., 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 Van Kampen V.I. Global Value Equity Fund

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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	$	1,757,039	$	929,442	$	—	$	2,686,481
Brazil		1,163,370		—		—		1,163,370
Canada		2,045,577		—		—		2,045,577
China		939,702		203,234		—		1,142,936
France		1,195,116		3,328,459		—		4,523,575
Germany		3,336,250		—		—		3,336,250
Hong Kong		—		1,230,584		—		1,230,584
Indonesia		125,935		—		—		125,935
Ireland		229,810		—		—		229,810
Italy		—		1,086,462		—		1,086,462
Japan		7,314,041		5,565,608		—		12,879,649
Mexico		222,064		—		—		222,064
Netherlands		—		1,172,395		—		1,172,395
Norway		1,435,064		1,103,049		—		2,538,113
Poland		—		152,918		—		152,918
Russia		510,823		146,152		—		656,975
South Africa		254,420		767,315		—		1,021,735
South Korea		1,692,905		465,315		—		2,158,220
Spain		—		2,587,109		—		2,587,109
Switzerland		3,542,611		2,217,481		—		5,760,092
Taiwan		695,759		—		—		695,759
Thailand		374,507		—		—		374,507
Turkey		—		113,305		—		113,305
United Kingdom		3,813,297		6,533,600		—		10,346,897
United States		43,020,545		—		—		43,020,545
Total Investments	$	73,668,835	$	27,602,428	$	—	$	101,271,263

*  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, 2011, the Fund paid legal fees of $1,196 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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 Van Kampen V.I. Global Value Equity 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, 2011 and 2010:

	2011		2010
Ordinary income	$	1,440,323	$	823,810

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	2,354,286
Net unrealized appreciation — investments		990,807
Net unrealized appreciation (depreciation) — other investments		(190	)
Temporary book/tax differences		(14,655	)
Capital loss carryforward		(31,471,296	)
Shares of beneficial interest		128,008,316
Total net assets	$	99,867,268

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. Under these limitation rules, the Fund is limited to utilizing $15,638,149 of capital loss carryforward in the fiscal year ending December 31, 2012.

  The Fund has a capital loss carryforward as of December 31, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term		Long-Term		Total
December 31, 2016	$	13,246,047	$	—	$	13,246,047
December 31, 2017		17,917,975		—		17,917,975
Not subject to expiration		—		307,274		307,274
	$	31,164,022	$	307,274	$	31,471,296

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. To the extent that unrealized gains as of May 2, 2011, the date of reorganization of Invesco V.I. Global Dividend Growth Fund into the Fund and realized on securities held in each fund at such date of reorganization, the capital loss carryforward may be further limited for up to five years from the date of the reorganization.

Invesco Van Kampen V.I. Global Value Equity 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, 2011 was $27,125,171 and $27,431,464, 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	$	11,052,308
Aggregate unrealized (depreciation) of investment securities		(10,061,501	)
Net unrealized appreciation of investment securities	$	990,807
Cost of investments for tax purposes is $100,280,456.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, on December 31, 2011, undistributed net investment income (loss) was decreased by $32,767, undistributed net realized gain (loss) was increased by $32,772 and shares of beneficial interest decreased by $5. Further, as a result of tax deferrals acquired in the reorganization of Invesco V.I. Global Dividend Growth Fund into the Fund, undistributed net investment income (loss) was decreased by $6,049, undistributed net realized gain was decreased by $10,338,548 and shares of beneficial interest increased by $10,344,597. These reclassifications had no effect on the net assets of the Fund.

NOTE 9—Share Information

	Summary of Share Activity
	Year ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		882,041		$	6,843,913			424,256		$	3,147,637
Series II(b)		282,903			1,950,278			1,534			10,000
Issued as reinvestment of dividends:
Series I		180,447			1,439,970			123,510			823,810
Issued in connection with acquisitions:(c)
Series I		7,111,889			58,977,691			—			—
Series II(b)		3,419,989			28,363,525			—			—
Reacquired:
Series I		(2,359,534	)		(17,403,949	)		(1,215,233	)		(8,747,473	)
Series II(b)		(501,562	)		(3,693,639	)		—			—
Net increase (decrease) in share activity		9,016,173		$	76,477,789			(665,933	)	$	(4,766,026	)

(a)	There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 87% 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 Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.
(b)	Commencement date of June 1, 2010.
(c)	As of the opening of business on May 2, 2011 the Fund acquired all the net assets of Invesco V.I. Global Dividend Growth Fund (the “Target Fund”) pursuant to a plan of reorganization approved by the Trustees of the Fund on November 10, 2010 and by the shareholders of Invesco V.I. Global Dividend Growth Fund on April 1, 2011. The acquisition was accomplished by a tax-free exchange of 10,531,878 shares of the Fund for 8,939,065 shares outstanding of Invesco V.I. Global Dividend Growth Fund as of the close of business on April 29, 2011. Each class of Invesco V.I. Global Dividend Growth Fund was exchanged for the like class of shares of the Fund based on the relative net asset value of Invesco V.I. Global Dividend Growth Fund to the net asset value of the Fund at the close of business on April 29, 2011. Invesco V.I. Global Dividend Growth Fund’s net assets at that date of $87,341,216, including $17,111,954 of unrealized appreciation, were combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $48,932,340. The net assets immediately after the acquisition were $136,273,556.
	The pro forma results of operations for the year ended December 31, 2011 assuming the reorganization had been completed on January 1, 2011, the beginning of the annual reporting period are as follows:

Net investment income	$	2,803,054
Net realized/unrealized gains (losses)		(15,663,166	)
Change in net assets resulting from operations	$	(12,860,112	)

The combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the Target Fund that have been included in the Fund’s Statement of Operations since May 2, 2011.

Invesco Van Kampen V.I. Global Value Equity 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) on																						to average			to average net			Ratio of net
	Net asset				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 12/31/11	$	7.87	$	0.20	$	(1.02	)	$	(0.82	)	$	(0.25	)	$	—		$	(0.25	)	$	6.80		(10.89	)%	$	78,125		0.97	%(d)		1.00	%(d)		2.70	%(d)		62	%
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			1.15			2.04			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
Series II
Year ended 12/31/11		7.86		0.18		(1.02	)		(0.84	)		(0.23	)		—			(0.23	)		6.79		(11.12	)		21,742		1.22	(d)		1.25	(d)		2.45	(d)		62
Year ended 12/31/10(g)		6.52		0.07		1.27			1.34			—			—			—			7.86		20.55			12		1.40	(h)		1.45	(h)		1.76	(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. For the Period ended June 30, 2011, the portfolio turnover calculation excluded the value of securities purchased of $68,458,544 and sold of $8,561,566 in effect to realign the Fund’s portfolio holdings after the reorganization of Invesco V.I. Dividend Growth Fund into the Fund.
(d)	Ratios are based on average daily net assets (000’s) of $74,644 and $15,315 for Series I and Series II, 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 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 expense absorbed was 3.28% for the year ended December 31, 2009.
(g)	Commencement date of June 1, 2010.
(h)	Annualized.

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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two 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 audits 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, 2011 by correspondence with the custodian, provide a reasonable basis for our opinion. 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 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	856.40	$	4.35	$	1,020.52	$	4.74		0.93	%
Series II		1,000.00		855.20		5.52		1,019.26		6.01		1.18

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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, 2011:

Federal and State Income Tax
Corporate Dividends Received Deduction*	55%

*  The above percentages are 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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco Van Kampen V.I. Global Value Equity Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco Van Kampen V.I. Global Value Equity Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco Van Kampen V.I. Global Value Equity Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco Van Kampen V.I. Global Value Equity Fund

Invesco Van Kampen V.I. Growth and
Income Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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 year ended December 31, 2011, Invesco Van Kampen V.I. Growth and Income Fund underperformed the Russell 1000 Value Index, the Fund’s style-specific benchmark. As the Fund uses a bottom-up stock selection approach, stock selection in various sectors was the primary reason the Fund underperformed its style-specific benchmark.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	-2.01	%
Series II Shares	-2.26
S&P 500 Index▼(Broad Market Index)	2.09
Russell 1000 Value Index▼(Style-Specific Index)	0.39
Lipper VUF Large-Cap Value Funds Index▼(Peer Group Index)	-1.70

Source(s): ^▼Lipper Inc.

As noted in the Fund’s latest semiannual report, the Fund has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.

How we invest

We call our investment philosophy “value with a catalyst.” We believe 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, under-earning 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 when 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 goal 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

The year began with equity markets fueled on the second round of “quantitative easing” by the U.S. Federal Reserve. Markets rose through the first quarter of 2011. However, with the spring came increased volatility and significant macroeconomic distortions due to civil unrest in Egypt and Libya, flooding in Australia and a devastating earthquake and tsunami in Japan. Corporate earnings remained strong with largely positive surprises, but were often overshadowed by investor concerns about continuing high unemployment and soft housing data.

     Although markets stabilized and were generally in positive territory through the summer, major equity indexes sold off precipitously in August as the U.S. government struggled to raise the nation’s debt ceiling. Despite an eventual agreement between the White House and Congress, credit rating agency Standard & Poor’s announced the first-ever downgrade to long-term U.S. government debt. Uncertainty created by the downgrade, combined with the continuing saga surrounding the debt crisis in the eurozone, reignited fears of a global recession. Despite evidence of sustained, but muted, economic growth, these macroeconomic factors continued to weigh on markets through the end of the reporting period.

     Results were mixed among the sectors of the Russell 1000 Value Index, with cyclical sectors such as financials, materials and information technology (IT) posting negative returns, while defensive sectors such as health care and consumer staples fared better, posting double-digit positive returns.

     The Fund’s underweight exposure to the financials sector was the largest relative contributor to performance versus the Russell 1000 Value Index, as the financials sector was the worst performing sector in

Portfolio Composition

By sector

Financials	18.1	%
Energy	13.0
Health Care	12.7
Consumer Staples	12.2
Information Technology	11.4
Consumer Discretionary	9.4
Industrials	8.3
Utilities	4.0
Telecommunication Services	3.3
Materials	1.0
Money Market Funds Plus Other Assets Less Liabilities	6.6

Top 10 Equity Holdings*

1.	General Electric Co.	4.3	%
2.	JPMorgan Chase & Co.	4.1
3.	Marsh & McLennan Cos., Inc.	3.0
4.	Pfizer, Inc.	2.8
5.	Anadarko Petroleum Corp.	2.7
6.	Procter & Gamble Co. (The)	2.7
7.	Royal Dutch Shell PLC-ADR	2.4
8.	eBay Inc.	2.3
9.	Tyco International Ltd.	2.2
10.	Viacom Inc.-Class B	2.1

Top Five Industries*

1.	Pharmaceuticals	7.7	%
2.	Industrial Conglomerates	6.5
3.	Integrated Oil & Gas	6.3
4.	Other Diversified Financial Services	5.6
5.	Electric Utilities	4.0

Total Net Assets	$1.9 billion
Total Number of Holdings*		74

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

the index for the reporting period. 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.

     Strong stock selection in the materials sector was another driver of relative performance versus the style-specific benchmark. The Fund’s small exposure to Dow Chemical and LyondellBasell and its lack of exposure to Alcoa and US Steel – all of which performed poorly for the year – provided the greatest boost to relative Fund performance within this sector. We sold our positions in both Dow Chemical and LyondellBasell before the close of the reporting period.

     Also, stock selection in the health care sector was a contributor to Fund performance relative to the style-specific index. Bristol-Myers Squibb, a pharmaceutical company, and UnitedHealth Group, a health care services company, performed extremely well over the reporting period, adding to the Fund’s relative returns.

     Stock selection in the consumer staples sector was the largest detractor from Fund performance during the reporting period. Fund holding Avon Products was a detractor in this sector, as the stock, which was not held in the Russell 1000 Value Index, performed poorly for the year. Avon’s sales declined in emerging markets, notably Brazil, and European profits were hurt by the slowing economy. In December, Avon announced that it would begin a search for a replacement chief executive officer in 2012.

     Stock selection in the energy sector also negatively affected the Fund’s relative performance. More specifically, holdings in the exploration and production and oil and gas equipment service industries were the largest detractors, as investors shunned highly cyclical areas of the market. Baker Hughes, Schlumberger and Hess performed poorly during the year, with their stock prices producing double-digit losses.

     Stock selection in the IT sector detracted from Fund performance during the reporting period. The Fund was overweight the IT sector versus the Russell 1000 Value Index and was adversely affected by our exposure to stocks in the hardware and equipment industry. Notably hindering Fund performance was Hewlett-Packard. The stock sold off significantly on the announcement the company was selling its PC business to purchase an enterprise software company.

The company also replaced its chief executive officer, the third such change in two years. This created uncertainty in investors’ minds about management stability. Cisco Systems was also a large detractor in the IT sector; however, we sold our position during the early part of 2011.

     Finally, stock selection and underweight exposure to the utilities sector also detracted from the Fund’s relative performance. Lack of exposure to multi-utilities stocks was one of the largest detractors from Fund performance within this sector.

     We used currency forward contracts during the reporting period for the purpose of hedging currency exposure of U.S. dollar-denominated American Depositary Receipts (ADRs) in the Fund. An ADR is a negotiable security that represents the underlying securities of a non-U.S. company that trades in the U.S. financial markets, priced in U.S. dollars. The use of currency forward contracts had a slight positive impact on the Fund’s performance relative to the Russell 1000 Value Index for the reporting period.

     Equity markets experienced an increase in market volatility during the period covered by this report. We believe that market volatility and the market correction that began in the third quarter of 2011 created 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.

     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 Booth School of Business.

Invesco Van Kampen V.I. Growth and Income Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class(es)

Fund and index data from 12/31/01*

1

Source: Lipper Inc.

*

During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

     As noted earlier in this report, the Fund has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer

group market measures. These additional benchmarks will now be included in the chart above.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (12/23/96)		7.29	%
	10 Years	4.37
	5 Years	-0.85
	1 Year	-2.01
Series II Shares
Inception (9/18/00)		3.50	%
	10 Years	4.10
	5 Years	-1.11
	1 Year	-2.26

Effective June 1, 2010, Class I and Class II shares of the predecessor fund, Van Kampen Life Investment Trust Growth and Income Portfolio, 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 0.85% and 1.10%, 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, 2011, 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. 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 credit-worthiness 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.

     Foreign risks. 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.

     Futures risk. 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.

     Options risk. 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.

     Real estate investment trusts (REITs) risk. Investing in 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. REITs 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.

     Derivative instruments risk. 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 instruments may not be liquid.

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 Van Kampen V.I. Growth and Income Fund

Schedule of Investments^(a)

December 31, 2011

	Shares		Value
Common Stocks & Other Equity Interests–93.45%
Agricultural Products–1.02%
Archer-Daniels-Midland Co.		671,770	$	19,212,622
Asset Management & Custody Banks–1.61%
Northern Trust Corp.		351,520		13,941,283
State Street Corp.		406,228		16,375,051
				30,316,334
Cable & Satellite–3.43%
Comcast Corp.–Class A		1,614,356		38,276,381
Time Warner Cable Inc.		412,596		26,228,728
				64,505,109
Computer Hardware–2.17%
Dell Inc.(b)		1,234,443		18,059,901
Hewlett-Packard Co.		885,573		22,812,361
				40,872,262
Consumer Electronics–0.20%
Sony Corp.–ADR (Japan)		209,430		3,778,117
Data Processing & Outsourced Services–0.97%
Western Union Co.		1,003,723		18,327,982
Diversified Banks–2.46%
Comerica Inc.		457,427		11,801,617
U.S. Bancorp		510,122		13,798,800
Wells Fargo & Co.(b)		753,551		20,767,865
				46,368,282
Diversified Chemicals–0.99%
PPG Industries, Inc.		223,767		18,682,307
Diversified Support Services–0.71%
Cintas Corp.		381,421		13,277,265
Drug Retail–1.01%
Walgreen Co.		572,388		18,923,147
Electric Utilities–4.00%
American Electric Power Co., Inc.		726,817		30,024,810
Edison International		407,626		16,875,716
Entergy Corp.		158,252		11,560,309
FirstEnergy Corp.		380,807		16,869,750
				75,330,585
Food Distributors–1.37%
Sysco Corp.		881,333		25,849,497
Health Care Distributors–0.77%
Cardinal Health, Inc.		354,756		14,406,641
Health Care Equipment–1.33%
Medtronic, Inc.		654,161		25,021,658
Health Care Facilities–0.30%
HCA Holdings, Inc.(b)		256,182		5,643,689
Home Improvement Retail–1.81%
Home Depot, Inc. (The)		809,701		34,039,830
Household Products–3.24%
Energizer Holdings, Inc.(b)		143,314		11,103,969
Procter & Gamble Co. (The)		748,599		49,939,039
				61,043,008
Industrial Conglomerates–6.53%
General Electric Co.		4,563,232		81,727,485
Tyco International Ltd.		878,342		41,027,355
				122,754,840
Industrial Machinery–1.10%
Ingersoll-Rand PLC (Ireland)		677,504		20,643,547
Insurance Brokers–2.98%
Marsh & McLennan Cos., Inc.		1,772,101		56,033,834
Integrated Oil & Gas–6.28%
Exxon Mobil Corp.		289,478		24,536,155
Hess Corp.		525,099		29,825,623
Occidental Petroleum Corp.		208,889		19,572,900
Royal Dutch Shell PLC–ADR (United Kingdom)		605,246		44,237,430
				118,172,108
Integrated Telecommunication Services–1.36%
Verizon Communications Inc.		635,803		25,508,416
Internet Software & Services–2.79%
eBay Inc.(b)		1,436,532		43,570,015
Yahoo! Inc.(b)		554,591		8,945,553
				52,515,568
Investment Banking & Brokerage–0.87%
Charles Schwab Corp. (The)		1,454,010		16,372,153
Investment Companies–Exchange Traded Funds–0.22%
SPDR S&P Homebuilders-ETF		243,616		4,165,834
IT Consulting & Other Services–0.99%
Amdocs Ltd.(b)		652,275		18,609,406

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
Managed Health Care–2.55%
Cigna Corp.		220,112	$	9,244,704
UnitedHealth Group Inc.		762,722		38,654,751
				47,899,455
Movies & Entertainment–3.93%
Time Warner Inc.		929,598		33,595,672
Viacom Inc.–Class B		887,011		40,279,169
				73,874,841
Oil & Gas Equipment & Services–2.24%
Baker Hughes Inc.		310,333		15,094,597
Cameron International Corp.(b)		227,162		11,174,099
Schlumberger Ltd.		233,296		15,936,450
				42,205,146
Oil & Gas Exploration & Production–3.58%
Anadarko Petroleum Corp.		660,245		50,396,501
Devon Energy Corp.		274,149		16,997,238
				67,393,739
Oil & Gas Refining & Marketing–0.01%
Sunoco, Inc.		5,074		208,135
Oil & Gas Storage & Transportation–0.91%
Williams Cos., Inc. (The)		519,967		17,169,310
Other Diversified Financial Services–5.63%
Citigroup Inc.		1,069,243		28,131,784
JPMorgan Chase & Co.		2,338,977		77,770,985
				105,902,769
Packaged Foods & Meats–2.55%
Kraft Foods Inc.–Class A		534,697		19,976,280
Unilever N.V.–New York Shares (Netherlands)		812,155		27,913,767
				47,890,047
Personal Products–1.47%
Avon Products, Inc.		1,587,502		27,733,660
Pharmaceuticals–7.74%
Abbott Laboratories		165,762		9,320,797
Bristol-Myers Squibb Co.		1,081,321		38,105,752
Eli Lilly & Co.		154,257		6,410,921
Hospira, Inc.(b)		97,185		2,951,509
Merck & Co., Inc.		942,330		35,525,841
Pfizer Inc.		2,466,472		53,374,454
				145,689,274
Property & Casualty Insurance–0.85%
Chubb Corp. (The)		231,213		16,004,564
Regional Banks–3.51%
BB&T Corp.		651,121		16,388,716
Fifth Third Bancorp		1,118,388		14,225,895
PNC Financial Services Group, Inc.		614,676		35,448,365
				66,062,976
Semiconductor Equipment–0.81%
Applied Materials, Inc.		1,429,825		15,313,426
Semiconductors–1.54%
Intel Corp.		696,089		16,880,158
STMicroelectronics N.V. (Switzerland)		1,322,706		7,812,377
STMicroelectronics N.V.–New York Shares (Netherlands)		716,645		4,249,705
				28,942,240
Soft Drinks–1.57%
Coca-Cola Co. (The)		284,186		19,884,494
PepsiCo, Inc.		145,577		9,659,034
				29,543,528
Systems Software–2.13%
Microsoft Corp.		1,540,799		39,999,142
Wireless Telecommunication Services–1.92%
Vodafone Group PLC–ADR (United Kingdom)		1,285,541		36,033,714
Total Common Stocks & Other Equity Interests (Cost $1,669,715,869)				1,758,240,007
Money Market Funds–7.13%
Liquid Assets Portfolio–Institutional Class(c)		67,085,087		67,085,087
Premier Portfolio–Institutional Class(c)		67,085,087		67,085,087
Total Money Market Funds (Cost $134,170,174)				134,170,174
TOTAL INVESTMENTS–100.58% (Cost $1,803,886,043)				1,892,410,181
OTHER ASSETS LESS LIABILITIES–(0.58)%				(10,963,928	)
NET ASSETS–100.00%			$	1,881,446,253

Investment Abbreviations:

ADR	– American Depositary Receipt
ETF	– Exchange-Traded Fund
SPDR	– Standard & Poor’s 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. Growth and Income Fund

Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $1,669,715,869)	$	1,758,240,007
Investments in affiliated money market funds, at value and cost		134,170,174
Total investments, at value (Cost $1,803,886,043)		1,892,410,181
Cash		114,626
Receivable for:
Investments sold		1,140,395
Fund shares sold		625,225
Dividends		4,101,090
Fund expenses absorbed		8,503
Foreign currency contracts outstanding		2,441,845
Investment for trustee deferred compensation and retirement plans		11,803
Total assets		1,900,853,668
Liabilities:
Payable for:
Investments purchased		515,754
Fund shares reacquired		16,166,933
Accrued fees to affiliates		2,604,002
Accrued other operating expenses		52,701
Trustee deferred compensation and retirement plans		68,025
Total liabilities		19,407,415
Net assets applicable to shares outstanding	$	1,881,446,253
Net assets consist of:
Shares of beneficial interest	$	1,827,183,566
Undistributed net investment income		26,708,695
Undistributed net realized gain (loss)		(63,411,991	)
Unrealized appreciation		90,965,983
	$	1,881,446,253
Net Assets:
Series I	$	156,616,652
Series II	$	1,724,829,601
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		8,812,645
Series II		97,221,988
Series I:
Net asset value per share	$	17.77
Series II:
Net asset value per share	$	17.74

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $553,356)	$	42,437,110
Dividends from affiliated money market funds		103,736
Total investment income		42,540,846
Expenses:
Advisory fees		10,585,454
Administrative services fees		4,851,261
Custodian fees		91,208
Distribution fees — Series II		4,332,503
Transfer agent fees		29,576
Trustees’ and officers’ fees and benefits		99,737
Other		66,679
Total expenses		20,056,418
Less: Fees waived		(4,238,695	)
Net expenses		15,817,723
Net investment income		26,723,123
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		40,577,416
Foreign currencies		(33,344	)
Foreign currency contracts		3,006,115
		43,550,187
Change in net unrealized appreciation (depreciation) of:
Investment securities		(110,207,371	)
Foreign currency contracts		2,441,845
		(107,765,526	)
Net realized and unrealized gain (loss)		(64,215,339	)
Net increase (decrease) in net assets resulting from operations	$	(37,492,216	)

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 Changes in Net Assets

For the years ended December 31, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	26,723,123		$	20,300,526
Net realized gain		43,550,187			91,837,578
Change in net unrealized appreciation (depreciation)		(107,765,526	)		96,268,684
Net increase (decrease) in net assets resulting from operations		(37,492,216	)		208,406,788
Distributions to shareholders from net investment income:
Series I		(1,800,201	)		(156,262	)
Series II		(18,264,703	)		(1,556,159	)
Total distributions from net investment income		(20,064,904	)		(1,712,421	)
Share transactions–net:
Series I		6,256,808			(16,505,227	)
Series II		52,879,530			21,333,686
Net increase in net assets resulting from share transactions		59,136,338			4,828,459
Net increase in net assets		1,579,218			211,522,826
Net assets:
Beginning of year		1,879,867,035			1,668,344,209
End of year (includes undistributed net investment income of $26,708,695 and $19,988,664, respectively)	$	1,881,446,253		$	1,879,867,035

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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 is to seek long-term growth of capital 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

Invesco Van Kampen V.I. Growth and Income 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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

Invesco Van Kampen V.I. Growth and Income 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 Daily Net Assets	Rate
First $500 million		0	.60%
Over $500 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least June 30, 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 0.62% 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 total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless 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.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $4,238,695.

  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

Invesco Van Kampen V.I. Growth and Income Fund

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, 2011, Invesco was paid $404,293 for accounting and fund administrative services and reimbursed $4,446,968 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, IIS and/or IDI.

NOTE 3—Additional Valuation Information

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

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

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	1,884,597,804	$	7,812,377	$	—	$	1,892,410,181

NOTE 4—Derivative Investments

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, 2011:

	Value
Risk Exposure/Derivative Type	Assets		Liabilities
Currency risk
Foreign currency contracts(a)	$	2,441,845	$	—

^(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, 2011

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	$	3,006,115
Change in Unrealized Appreciation
Currency risk		2,441,845
Total	$	5,447,960

*  The average notional value of foreign currency contracts outstanding during the period was $46,351,977.

Invesco Van Kampen V.I. Growth and Income Fund

Open Foreign Currency Contracts
Settlement		Contract to						Notional		Unrealized
Date	Counterparty	Deliver			Receive			Value		Appreciation
01/12/12	State Street Bank		EUR	11,474,439		USD	15,436,792	$	14,852,932	$	583,860
01/12/12	Bank of New York		EUR	32,737,509		USD	44,035,878		42,376,627		1,659,251
01/12/12	State Street Bank		GBP	16,602,625		USD	25,986,014		25,787,280		198,734
Total open foreign currency contracts										$	2,441,845

Currency Abbreviations:
EUR	– Euro
GBP	– British Pound
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, 2011, the Fund engaged in securities purchases of $2,123,372.

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, 2011, the Fund paid legal fees of $3,440 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010:

	2011		2010
Ordinary income	$	20,064,904	$	1,712,421

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	26,776,342
Net unrealized appreciation — investments		86,546,320
Temporary book/tax differences		(67,648	)
Capital loss carryforward		(58,992,327	)
Shares of beneficial interest		1,827,183,566
Total net assets	$	1,881,446,253

  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 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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund utilized $45,672,294 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, 2011, which expires as follows:

Capital Loss Carryforward*
Expiration	Short-Term		Long-Term		Total
December 31, 2017	$	58,992,327	$	—	$	58,992,327

*  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, 2011 was $514,112,228 and $503,763,751, 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	$	175,434,116
Aggregate unrealized (depreciation) of investment securities		(88,887,796	)
Net unrealized appreciation of investment securities	$	86,546,320
Cost of investments for tax purposes is $1,805,863,861.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of foreign currency transactions, litigation settlements and convertible preferred securities, on December 31, 2011, undistributed net investment income was increased by $61,812, undistributed net realized gain (loss) was decreased by $61,812. This reclassification had no effect on the net assets of the Fund.

NOTE 11—Share Information

	Summary of Share Activity
	Years ended October 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		2,123,242		$	37,996,201			836,015		$	13,995,298
Series II		11,601,479			208,213,439			10,759,774			177,127,218
Issued as reinvestment of dividends:
Series I		112,865			1,800,201			9,138			156,262
Series II		1,146,560			18,264,703			91,003			1,556,159
Reacquired:
Series I		(1,820,667	)		(33,539,594	)		(1,831,877	)		(30,656,787	)
Series II		(9,473,533	)		(173,598,612	)		(9,338,871	)		(157,349,691	)
Net increase (decrease) in share activity		3,689,946		$	59,136,338			(525,182	)	$	4,828,459

^(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 Fund 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. Growth and Income Fund

NOTE 12— Financial Highlights

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

																											Ratio of			Ratio of
					Net gains																						expenses			expenses
					(losses) on																						to average			to average net			Ratio of net
	Net asset				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			(000s omitted)		absorbed			absorbed			net assets			turnover(b)
Series I(c)
Year ended 12/31/11	$	18.40	$	0.30	$	(0.70	)	$	(0.40	)	$	(0.23	)	$	—		$	(0.23	)	$	17.77		(2.01	)%(d)	$	156,617		0.61	%(e)		0.84	%(e)		1.65	%(e)		28	%
Year ended 12/31/10		16.37		0.24		1.81			2.05			(0.02	)		—			(0.02	)		18.40		12.51	(d)		154,488		0.61			0.74			1.42			30
Year ended 12/31/09		13.74		0.24		2.98			3.22			(0.59	)		—			(0.59	)		16.37		24.37			153,653		0.62			—			1.72			55
Year ended 12/31/08		21.36		0.36		(6.95	)		(6.59	)		(0.38	)		(0.65	)		(1.03	)		13.74		(32.03	)		146,013		0.61			—			2.06			50
Year ended 12/31/07		22.00		0.39		0.16			0.55			(0.36	)		(0.83	)		(1.19	)		21.36		2.80			263,473		0.60			—			1.80			28
Series II(c)
Year ended 12/31/11		18.37		0.25		(0.69	)		(0.44	)		(0.19	)		—			(0.19	)		17.74		(2.26	)(d)		1,724,830		0.86	(e)		1.09	(e)		1.40	(e)		28
Year ended 12/31/10		16.39		0.20		1.80			2.00			(0.02	)		—			(0.02	)		18.37		12.19	(d)		1,725,378		0.86			0.99			1.17			30
Year ended 12/31/09		13.71		0.20		2.99			3.19			(0.51	)		—			(0.51	)		16.39		24.11	(f)		1,514,691		0.87			—			1.45			55
Year ended 12/31/08		21.31		0.32		(6.94	)		(6.62	)		(0.33	)		(0.65	)		(0.98	)		13.71		(32.21	)(f)		1,236,160		0.86			—			1.82			50
Year ended 12/31/07		21.96		0.34		0.15			0.49			(0.31	)		(0.83	)		(1.14	)		21.31		2.52	(f)		1,843,682		0.85			—			1.54			28

(a)	Calculated using average shares outstanding.
(b)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(c)	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.
(d)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns are not annualized for periods less than one year, if applicable, and do not reflect charges assessed in connection with variable product, which included would reduce total returns.
(e)	Ratios are based on average daily net assets (000’s omitted) of $146,172 and 1,733,001 for Series I and Series II, respectively.
(f)	These returns include combined Rule 12b-1 fees and service fees of up to 0.25%.

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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. 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 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	936.60	$	2.98	$	1,022.13	$	3.11		0.61	%
Series II		1,000.00		935.60		4.20		1,020.87		4.38		0.86

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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, 2011:

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco Van Kampen V.I. Growth and Income Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco Van Kampen V.I. Growth and Income Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco Van Kampen V.I. Growth and Income Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco Van Kampen V.I. Growth and Income Fund

Invesco Van Kampen V.I. Mid Cap Growth Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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 March 22, 2011, James Leach joined the Fund as lead portfolio manager. On the same date, Paul Rasplicka left the Fund. Additional information about your Fund’s manager appears later in this report.

     For the year ended December 31, 2011, Invesco Van Kampen V.I. Mid Cap Growth Fund produced negative returns and underperformed its style-specific benchmark, the Russell Midcap Growth Index. The Fund’s underperformance was driven in large part by stock selection in several sectors.

     The Fund also underperformed the broad U.S. stock market as represented by the S&P 500 Index, because mid-cap stocks generally underperformed large-cap stocks.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges.
If variable product issuer charges were included, returns would be lower.

Series I Shares	-8.89	%
Series II Shares	-9.36
S&P 500 Index▼ (Broad Market Index)	2.09
Russell Midcap Growth Index▼ (Style-Specific Index)	-1.65
Lipper VUF Mid-Cap Growth Funds Index▼ (Peer Group Index)	-4.69

Source(s): ^▼Lipper Inc.

As noted in the Fund’s latest semiannual report, the Fund has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.

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 valuations 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 a deterioration in a company’s fundamentals.
n	The catalysts for growth are no longer present or are reflected in the stock price.
n	We identify a more attractive investment opportunity.

Market conditions and your Fund

The fiscal year began with equity markets fueled on the second round of “quantitative easing” by the U.S. Federal Reserve. Markets rose through the first quarter of 2011. However, with the spring came increased volatility and significant macroeconomic distortions due to civil unrest in Egypt and Libya, flooding in Australia and a devastating earthquake and tsunami in Japan. Corporate earnings remained strong with largely positive surprises, but often were overshadowed by investor concerns about continuing high unemployment and soft housing data.

     Although markets stabilized and were generally in positive territory through the summer, major equity indexes sold off precipitously in August as the U.S. government struggled to raise the nation’s debt ceiling. Despite an eventual agreement between the White House and Congress, credit rating agency Standard & Poor’s announced the first-ever downgrade to long-term U.S. government debt. Uncertainty created by the downgrade, combined with the continuing saga surrounding the debt crisis in the eurozone, reignited fears of a global recession. Despite evidence of sustained, but muted, economic growth, these macroeconomic factors continued to weigh

Portfolio Composition

By sector

Consumer Discretionary	21.7	%
Information Technology	18.2
Industrials	16.5
Health Care	16.3
Energy	9.0
Materials	5.7
Consumer Staples	3.2
Telecommunication Services	2.9
Financials	2.7
Money Market Funds Plus Other Assets Less Liabilities	3.8

Top 10 Equity Holdings*

1.	Cameron International Corp.	2.4	%
2.	Kansas City Southern	2.4
3.	DaVita, Inc.	2.2
4.	Amphenol Corp.-Class A	2.1
5.	Aetna Inc.	2.0
6.	Whiting Petroleum Corp.	2.0
7.	PetSmart, Inc.	2.0
8.	Church & Dwight Co., Inc.	2.0
9.	Airgas, Inc.	2.0
10.	Discovery Communications, Inc.- Class A	1.9

Top Five Industries*

1.	Semiconductors	5.1	%
2.	Specialty Stores	5.0
3.	Health Care Services	4.9
4.	Oil & Gas Equipment & Services	4.3
5.	Oil & Gas Exploration & Production	4.1

Total Net Assets	$65.1 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 Van Kampen V.I. Mid Cap Growth Fund

on markets through the end of the reporting period.

     In this environment, the Fund produced negative absolute returns and underperformed the Russell Midcap Growth Index for the year. The Fund underperformed the index by the widest margin in the consumer discretionary, industrials, consumer staples, health care and telecommunication services sectors. Some of this underperformance was offset by outperformance in other sectors, including financials, information technology and energy.

     The Fund underperformed most significantly in the consumer discretionary sector, primarily driven by stock selection. Within this sector, Abercrombie & Fitch declined during the reporting period, given its exposure to Europe and the region’s ongoing austerity and debt concerns. Internet-based publishing and production service Shutterfly also detracted from performance as management cut its earnings outlook for late 2011. We sold both Abercrombie & Fitch and Shutterfly during the reporting period. Hotel operator Starwood Hotels also detracted from Fund performance. The company’s revenues tend to be correlated to economic growth, and sentiment turned mostly negative during the reporting period. The negative impact of these stocks offset the contribution from ULTA Salon, Cosmetics & Fragrance, which was the Fund’s strongest contributor.

     Another area of weakness for the Fund was the industrials sector, where stock selection and overweight exposure to the underperforming sector detracted from Fund performance. Underperforming holdings included construction equipment manufacturer Terex and commercial truck and engine maker Navistar International. Both companies were affected by wavering sentiment on the prospects for global growth. Construction and engineering services firm Foster Wheeler did not win an expected contract and was hurt as energy prices declined later in the reporting period. We sold Terex and Foster Wheeler during the reporting period.

     As investors sought safety during the reporting period by rotating into the defensive consumer staples sector, returns for that sector were significantly higher than most others. The Fund’s underweight position in this sector was a detractor from performance.

     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 financials sector, due to stock selection and an underweight position. One holding that made a positive contribution to Fund performance was commercial real estate brokerage firm CB Richard Ellis; investors reacted positively to news of increasing property sales and leasing in the U.S. and abroad.

Discover Financial Services and Moody’s also contributed to performance, with Moody’s benefiting from the significant tailwind of new debt issuance during the reporting period. We sold our holdings in CB Richard Ellis and Moody’s during the reporting period.

     Outperformance in the information technology sector came from strong stock selection. Data warehousing solution provider Teradata, middleware provider TIBCO Software and semiconductor capital equipment designer KLA-Tencor all contributed to Fund performance for the year. We sold all three of these stocks before the close of the year because we identified promising new opportunities.

     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. We thank you for your commitment to Invesco Van Kampen V.I. Mid Cap 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.

James Leach
Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen V.I. Mid Cap Growth Fund. He joined Invesco in 2011. Mr. Leach earned a B.S. in mechanical engineering from the University of California and an M.B.A. from the Stern School of Business at New York University.

Invesco Van Kampen V.I. Mid Cap Growth Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class(es)

Fund and index data from 12/31/01*

* During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

     As noted earlier in this report, the Fund

has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer

group market measures. These additional benchmarks will now be included in the chart above.

Average Annual Total Returns
As of 12/31/11

Series I Shares
10 Years	3.55	%
5 Years	2.49
1 Year	-8.89
Series II Shares
Inception (9/25/00)	-3.74	%
10 Years	3.52
5 Years	2.44
1 Year	-9.36

Effective June 1, 2010, Class II shares of the predecessor fund, Van Kampen Life Investment Trust Mid Cap Growth Portfolio, 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 1.21% and 1.46%, 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 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, 2011, 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

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

     Market risk. 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 are generally affected by changes in the interest rates and creditworthiness of the issuer. The price of such securities tend to fall as interest rates rise, and such declines tend to be greater for securities with longer maturities. The creditworthiness of the issuer may affect the issuer’s ability to make timely payments of interest and principal.

     Medium-sized company risks. 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. 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.

     Growth investing risk. 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. 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.

     Foreign risks. 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.

     Futures risk. 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.

     Options risk. 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.

     Real estate investment trusts (REITS) risk. 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.

     Derivatives risks. 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 instruments may not be liquid.

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 Van Kampen V.I. Mid Cap Growth Fund

Schedule of Investments^(a)

December 31, 2011

	Shares		Value
Common Stocks–96.22%
Aerospace & Defense–1.07%
Triumph Group, Inc.		11,910	$	696,139
Air Freight & Logistics–1.56%
C.H. Robinson Worldwide, Inc.		14,586		1,017,811
Apparel, Accessories & Luxury Goods–2.83%
Coach, Inc.		17,833		1,088,526
Michael Kors Holdings Ltd.(b)		27,587		751,746
				1,840,272
Application Software–0.86%
Citrix Systems, Inc.(b)		9,172		556,924
Asset Management & Custody Banks–1.21%
Affiliated Managers Group, Inc.(b)		8,186		785,447
Auto Parts & Equipment–3.05%
BorgWarner, Inc.(b)(c)		11,625		740,977
Gentex Corp.		42,137		1,246,834
				1,987,811
Automobile Manufacturers–1.11%
Tesla Motors, Inc.(b)(c)		25,302		722,625
Biotechnology–2.53%
BioMarin Pharmaceutical Inc.(b)		27,007		928,501
United Therapeutics Corp.(b)		15,192		717,822
				1,646,323
Broadcasting–1.92%
Discovery Communications, Inc.–Class A(b)		30,457		1,247,823
Communications Equipment–2.53%
F5 Networks, Inc.(b)		6,156		653,275
Juniper Networks, Inc.(b)		29,511		602,319
Sycamore Networks, Inc.(b)		21,940		392,726
				1,648,320
Computer Storage & Peripherals–1.56%
NetApp, Inc.(b)		10,570		383,374
Western Digital Corp.(b)		20,421		632,030
				1,015,404
Construction & Engineering–1.14%
MasTec Inc.(b)		42,665		741,091
Construction & Farm Machinery & Heavy Trucks–2.52%
AGCO Corp.(b)		20,476		879,854
Navistar International Corp.(b)		20,037		759,001
				1,638,855
Consumer Finance–1.55%
Discover Financial Services		42,170		1,012,080
Electrical Components & Equipment–1.54%
Cooper Industries PLC (Ireland)		18,491		1,001,288
Electronic Components–2.09%
Amphenol Corp.–Class A		29,980		1,360,792
Fertilizers & Agricultural Chemicals–1.33%
Intrepid Potash, Inc.(b)		38,308		866,910
Footwear–1.05%
Deckers Outdoor Corp.(b)		9,055		684,286
General Merchandise Stores–1.63%
Dollar Tree, Inc.(b)		12,746		1,059,320
Health Care Equipment–1.32%
CareFusion Corp.(b)		33,836		859,773
Health Care Facilities–2.97%
Brookdale Senior Living Inc.(b)		46,019		800,270
Universal Health Services, Inc.–Class B		29,132		1,132,070
				1,932,340
Health Care Services–4.87%
DaVita, Inc.(b)		19,267		1,460,631
Express Scripts, Inc.(b)		22,101		987,694
HMS Holdings Corp.(b)		22,478		718,846
				3,167,171
Health Care Technology–1.44%
Allscripts Healthcare Solutions, Inc.(b)		49,556		938,591
Hotels, Resorts & Cruise Lines–1.43%
Starwood Hotels & Resorts Worldwide, Inc.		19,345		927,980
Household Products–1.97%
Church & Dwight Co., Inc.		28,004		1,281,463
Human Resource & Employment Services–1.27%
Robert Half International, Inc.		29,104		828,300
Industrial Gases–1.95%
Airgas, Inc.		16,243		1,268,253
Industrial Machinery–3.37%
Flowserve Corp.		9,777		971,052
Gardner Denver Inc.		15,860		1,222,171
				2,193,223
Internet Software & Services–1.62%
Equinix, Inc.(b)		10,418		1,056,385

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
IT Consulting & Other Services–1.56%
Cognizant Technology Solutions Corp.–Class A(b)		12,522	$	805,290
Gartner, Inc.(b)		6,082		211,471
				1,016,761
Managed Health Care–3.16%
Aetna Inc.		31,014		1,308,481
Cigna Corp.		17,810		748,020
				2,056,501
Movies & Entertainment–1.26%
Cinemark Holdings, Inc.		44,189		817,055
Oil & Gas Drilling–0.57%
Patterson-UTI Energy, Inc.		18,614		371,908
Oil & Gas Equipment & Services–4.31%
Cameron International Corp.(b)		32,169		1,582,393
Key Energy Services, Inc.(b)		36,548		565,398
Weatherford International Ltd.(b)		44,743		655,037
				2,802,828
Oil & Gas Exploration & Production–4.11%
Cabot Oil & Gas Corp.		15,170		1,151,403
Sanchez Energy Corp.(b)		13,020		224,725
Whiting Petroleum Corp.(b)		27,868		1,301,157
				2,677,285
Packaged Foods & Meats–1.29%
H.J. Heinz Co.		15,546		840,106
Railroads–2.39%
Kansas City Southern(b)		22,883		1,556,273
Restaurants–1.70%
Panera Bread Co.–Class A(b)		7,806		1,104,159
Semiconductor Equipment–0.78%
Lam Research Corp.(b)		13,753		509,136
Semiconductors–5.13%
Altera Corp.		30,043		1,114,595
Avago Technologies Ltd. (Singapore)		22,319		644,127
Linear Technology Corp.		29,543		887,176
LSI Corp.(b)		116,642		694,020
				3,339,918
Specialized Consumer Services–0.72%
Coinstar, Inc.(b)(c)		10,337		471,781
Specialty Chemicals–2.41%
Albemarle Corp.		17,502		901,528
LyondellBasell Industries N.V.–Class A (Netherlands)		20,583		668,742
				1,570,270
Specialty Stores–4.98%
Dick’s Sporting Goods, Inc.		25,591		943,796
PetSmart, Inc.		25,111		1,287,943
Ulta Salon, Cosmetics & Fragrance, Inc.(b)		15,513		1,007,104
				3,238,843
Systems Software–0.94%
Check Point Software Technologies Ltd. (Israel)(b)		11,686		613,982
Technology Distributors–1.13%
Avnet, Inc.(b)		23,599		733,693
Trucking–1.63%
J.B. Hunt Transport Services, Inc.		23,573		1,062,435
Wireless Telecommunication Services–2.86%
NII Holdings Inc.(b)		31,905		679,576
SBA Communications Corp.–Class A(b)		27,555		1,183,763
				1,863,339
Total Common Stocks (Cost $59,451,173)				62,629,273
Money Market Funds–3.73%
Liquid Assets Portfolio–Institutional Class(d)		1,214,100		1,214,100
Premier Portfolio–Institutional Class(d)		1,214,100		1,214,100
Total Money Market Funds (Cost $2,428,200)				2,428,200
TOTAL INVESTMENTS (excluding investments purchased with cash collateral from securities on loan)–99.95% (Cost $61,879,373)				65,057,473
Investments Purchased with Cash Collateral from Securities on Loan
Money Market Funds–2.29%
Liquid Assets Portfolio–Institutional Class (Cost $1,491,048)(d)(e)		1,491,048		1,491,048
TOTAL INVESTMENTS–102.24% (Cost $63,370,421)				66,548,521
OTHER ASSETS LESS LIABILITIES–(2.24%)				(1,457,828	)
NET ASSETS–100.00%			$	65,090,693

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, 2011.
(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 Van Kampen V.I. Mid Cap Growth Fund

Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $59,451,173)*	$	62,629,273
Investments in affiliated money market funds, at value and cost		3,919,248
Total investments, at value (Cost $63,370,421)		66,548,521
Receivable for:
Investments sold		226,581
Fund shares sold		1,366
Dividends		37,708
Investment for trustee deferred compensation and retirement plans		5,284
Total assets		66,819,460
Liabilities:
Payable for:
Fund shares reacquired		16,706
Collateral upon return of securities loaned		1,491,048
Accrued fees to affiliates		179,860
Accrued other operating expenses		33,632
Trustee deferred compensation and retirement plans		7,521
Total liabilities		1,728,767
Net assets applicable to shares outstanding	$	65,090,693
Net assets consist of:
Shares of beneficial interest	$	58,617,879
Undistributed net investment income (loss)		(7,352	)
Undistributed net realized gain		3,302,066
Unrealized appreciation		3,178,100
	$	65,090,693
Net Assets:
Series I	$	11,181
Series II	$	65,079,512
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		3,030
Series II		17,676,344
Series I:
Net asset value per share	$	3.69
Series II:
Net asset value per share	$	3.68

*  At December 31, 2011, securities with an aggregate value of $1,451,441 were on loan to brokers.

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends (net of foreign withholding taxes of $15,723)	$	463,128
Dividends from affiliated money market funds (includes securities lending income of $10,710)		13,361
Total investment income		476,489
Expenses:
Advisory fees		558,633
Administrative services fees		199,727
Custodian fees		13,547
Distribution fees — Series II		186,180
Transfer agent fees		7,102
Trustees’ and officers’ fees and benefits		20,013
Other		53,344
Total expenses		1,038,546
Less: Fees waived		(103,642	)
Net expenses		934,904
Net investment income (loss)		(458,415	)
Realized and unrealized gain (loss) from:
Net realized gain from investment securities (includes net gains from securities sold to affiliates of $417,192)		5,213,870
Change in net unrealized appreciation (depreciation) of investment securities		(11,146,604	)
Net realized and unrealized gain (loss)		(5,932,734	)
Net increase (decrease) in net assets resulting from operations	$	(6,391,149	)

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 Changes in Net Assets

For the years ended December 31, 2011 and 2010

	2011			2010
Operations:
Net investment income (loss)	$	(458,415	)	$	(330,427	)
Net realized gain		5,213,870			3,962,128
Change in net unrealized appreciation (depreciation)		(11,146,604	)		12,689,878
Net increase (decrease) in net assets resulting from operations		(6,391,149	)		16,321,579
Share transactions–net:
Series I		—			10,000
Series II		(7,991,842	)		17,691,401
Net increase (decrease) in net assets resulting from share transactions		(7,991,842	)		17,701,401
Net increase (decrease) in net assets		(14,382,991	)		34,022,980
Net assets:
Beginning of year		79,473,684			45,450,704
End of year (includes undistributed net investment income (loss) of $(7,352) and $(1,308), respectively)	$	65,090,693		$	79,473,684

Notes to Financial Statements

December 31, 2011

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 twenty-eight 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 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 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. 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 Van Kampen V.I. Mid Cap Growth 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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 Van Kampen V.I. Mid Cap Growth 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 affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

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

Average Net Assets	Rate
First $500 million		0	.75%
Next $500 million		0	.70%
Over $1 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  The Adviser has contractually agreed, through at least June 30, 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 items or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless 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 (excluding investments of cash collateral from securities lending) in such affiliated money market funds.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $103,642.

  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, 2011, Invesco was paid $50,000 for accounting and fund administrative services and reimbursed $149,727 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, 2011, 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. For the year ended December 31, 2011, 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 the Adviser, Invesco Ltd., IIS and/or IDI.

Invesco Van Kampen V.I. Mid Cap Growth Fund

NOTE 3—Additional Valuation Information

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

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

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	66,548,521	$	—	$	—	$	66,548,521

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, 2011, the Fund engaged in securities purchases of $1,769,828 and securities sales of $2,403,007, which resulted in net realized gains of $417,192.

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, 2011, the Fund paid legal fees of $1,215 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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 Van Kampen V.I. Mid Cap Growth Fund

NOTE 7—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, 2011 and 2010.

Tax Components of Net Assets at Period-End:

	2011
Undistributed long-term gain		3,397,791
Net unrealized appreciation — investments		3,082,375
Temporary book/tax differences		(7,352	)
Shares of beneficial interest		58,617,879
Total net assets	$	65,090,693

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund utilized $1,624,949 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund does not have a capital loss carryover at period end.

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, 2011 was $99,815,988 and $108,970,697, 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	6,268,189
Aggregate unrealized (depreciation) of investment securities	(3,185,814	)
Net unrealized appreciation of investment securities	3,082,375
Cost of investments for tax purposes is 63,466,146

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of expired capital loss carryover and net operating losses, on December 31, 2011, undistributed net investment income (loss) was increased by $452,371, undistributed net realized gain was increased by $351,608 and shares of beneficial interest decreased by $803,979. This reclassification had no effect on the net assets of the Fund.

Invesco Van Kampen V.I. Mid Cap Growth Fund

NOTE 10—Share Information

	Summary of Share Activity
	Years ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		—		$	—			3,030		$	10,000
Series II		1,834,465			7,278,754			8,162,383			27,538,493
Reacquired:
Series I		—			—			—			—
Series II		(3,749,212	)		(15,270,596	)		(2,832,428	)		(9,847,092	)
Net increase (decrease) in share activity		(1,914,747	)	$	(7,991,842	)		5,332,985		$	17,701,401

^(a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 88% 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 Fund 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) on																to average			to average net			Ratio of net
	Net asset		Net			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)(a)			unrealized)			operations			gains			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/11	$	4.05	$	(0.01	)	$	(0.35	)	$	(0.36	)	$	—		$	3.69		(8.89	)%	$	11		1.00	%(d)		1.14	%(d)		(0.36	)%(d)		137	%
Year ended 12/31/10(e)		3.30		(0.00	)(f)		0.75			0.75			—			4.05		22.73			12		1.01	(g)		1.12	(g)		(0.18	)(g)		105
Series II
Year ended 12/31/11		4.06		(0.02	)		(0.36	)		(0.38	)		—			3.68		(9.36	)		65,080		1.25	(d)		1.39	(d)		(0.61	)(d)		137
Year ended 12/31/10		3.19		(0.02	)		0.89			0.87			—			4.06		27.27			79,461		1.26			1.37			(0.53	)		105
Year ended 12/31/09		2.04		(0.01	)		1.16			1.15			—			3.19		56.37			45,451		1.26			1.52			(0.36	)		42
Year ended 12/31/08		5.72		(0.02	)		(2.01	)		(2.03	)		(1.65	)		2.04		(46.83	)		22,603		1.26			1.61			(0.66	)		42
Year ended 12/31/07		5.24		(0.02	)		0.88			0.86			(0.38	)		5.72		17.60			43,316		1.26			1.39			(0.37	)		201

(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 and is not annualized for periods less than one year, if applicable.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s) of $12 and $74,472 for Series I and Series II shares, respectively.
(e)	Commencement date of June 1, 2010.
(f)	Amount is less than $0.01 per share.
(g)	Annualized.

NOTE 12—Proposed Reorganization

The Board of Trustees of the Fund 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. Capital Development 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 2012. Upon closing of the reorganization, shareholders of the Target Fund will receive a corresponding class of shares of the Fund in exchange for their shares of the Target Fund and the Target Fund will liquidate and cease operations.

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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. 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 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	850.20	$	4.71	$	1,020.11	$	5.14		1.01	%
Series II		1,000.00		847.90		5.87		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, 2011 through December 31, 2011, 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

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco Van Kampen V.I. Mid Cap Growth Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco Van Kampen V.I. Mid Cap Growth Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco Van Kampen V.I. Mid Cap Growth Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco Van Kampen V.I. Mid Cap Growth Fund

Invesco Van Kampen V.I. Mid Cap Value Fund
Annual Report to Shareholders § December 31, 2011

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

Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov.

Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the 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 fiscal year ended December 31, 2011, Invesco Van Kampen V.I. Mid Cap Value Fund outperformed the Russell Midcap Value Index, the Fund’s style-specific benchmark. As the Fund uses a bottom-up stock selection approach, stock selection in various sectors was the primary reason the Fund outperformed its benchmark.

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

Fund vs. Indexes

Total returns, 12/31/10 to 12/31/11, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower.

Series I Shares	0.92	%
Series II Shares	0.83
S&P 500 Index▼ (Broad Market Index)	2.09
Russell Midcap Value Index▼ (Style-Specific Index)	-1.38
Lipper VUF Mid-Cap Value Funds Index▼ (Peer Group Index)	-5.56

Source(s): ^▼Lipper Inc.

As noted in the Fund’s latest semiannual report, the Fund has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures.

How we invest

We call our investment philosophy “value with a catalyst.” We believe 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, under-earning 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 under-valuation. 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 goal 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

The fiscal year began with equity markets fueled on the second round of “quantitative easing” by the U.S. Federal Reserve,

and markets rose through the first quarter of 2011. However, with the spring came increased volatility and significant macroeconomic distortions due to civil unrest in Egypt and Libya, flooding in Australia and a devastating earthquake and tsunami in Japan. Corporate earnings remained strong with largely positive surprises, but were often overshadowed by investor concerns about continuing high unemployment and soft housing data.

     Although markets stabilized and were generally in positive territory through the summer, major equity indexes sold off precipitously in August as the U.S. government struggled to raise the nation’s debt ceiling. Despite an eventual agreement between the White House and Congress, credit rating agency Standard & Poor’s announced the first-ever downgrade to long-term U.S. government debt. Uncertainty created by the downgrade, combined with the continuing saga surrounding the debt crisis in the eurozone, reignited fears of a global recession. Despite evidence of sustained, but muted, growth, these macroeconomic factors continued to weigh on markets through the end of the reporting period.

     Results were mixed among the sectors of the Russell Midcap Value Index, with cyclical sectors such as telecommunication services, financials, materials and information technology (IT) posting negative returns, while defensive sectors such as utilities and consumer staples fared better, posting double-digit positive returns.

     The largest contributor to relative Fund performance versus the Russell Midcap Value Index were holdings in the energy sector. Although the Fund was underweight in this sector, stock selection drove relative performance. El Paso was a top performer as investors welcomed the news that the company will spin off its exploration and production business, while retaining its core pipeline business.

Portfolio Composition

By sector

Financials	18.2	%
Consumer Discretionary	13.3
Information Technology	10.4
Energy	9.6
Consumer Staples	9.3
Materials	8.0
Utilities	7.9
Health Care	6.1
Industrials	6.1
Telecommunication Services	3.3
Money Market Funds Plus
Other Assets Less Liabilities	7.8

Top 10 Equity Holdings*

1. Edison International	3.7	%
2. Fidelity National Information       Services, Inc.	3.4
3. Newell Rubbermaid Inc.	3.4
4. Safeway Inc.	3.3
5. tw telecom inc.	3.3
6. Williams Cos., Inc. (The)	3.2
7. W.R. Grace & Co.	3.2
8. ConAgra Foods, Inc.	3.1
9. Harley-Davidson, Inc.	3.0
10. Marsh & McLennan Cos., Inc.	2.9

Total Net Assets	$292.9 million
Total Number of Holdings*		42

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

Additionally, in October, Kinder Morgan (not a Fund holding) announced it would be acquiring El Paso at a significant premium. Another top performer in the energy sector was The Williams Companies, with its stock price benefiting from strong financials.

     Select holdings in the materials sector also contributed to relative Fund performance, and stock selection helped drive returns. Cyclical stocks performed well in the materials sector, and the economy show signs of strengthening. W.R. Grace & Co., a chemical supplier for refineries, was a top performer due to positive earnings revisions. Valspar, a paint and coatings manufacturer, was also a top performer within this sector.

     In general, financials stocks performed poorly toward the end of the reporting period. The Fund had an underweight exposure to the financials sector relative to the Russell Midcap Value Index. Our financials stocks did not depreciate as much as those of the index, thereby acting as a contributor to relative Fund performance.

     Finally, strong stock selection in the industrials sector helped relative Fund performance. Notably, Goodrich (no longer held by the Fund) was the largest contributor within this sector. The company’s stock rallied on news of a takeover by United Technologies (not a Fund holding), posting double-digit gains for the reporting period.

     In terms of detractors, an underweight exposure to the utilities sector was the largest detractor from overall relative Fund performance for the reporting period. Utilities stocks were the top performing sector of the Russell Midcap Value Index for 2011, posting returns of over 20%.¹

     Weak stock selection in the consumer staples sector also negatively affected relative Fund performance. Avon, the sector’s largest detractor, performed poorly during the reporting period on concerns of its exposure to consumers outside of the U.S., coupled with growing fear of the European debt crisis.

     Stock selection in the consumer discretionary sector also dampened Fund performance versus the style-specific benchmark. Staples, an office supplies distributor, continued to post disappointing earnings and revenues as sales lagged due to high unemployment and a lack of hiring. Whirlpool (no longer a Fund holding as of the end of the reporting period) also detracted from relative Fund performance due to weak demand from consumers.

     Equity markets experienced an increase in market volatility during the period covered by this report. We believe that market volatility, and the market correction that began in the third quarter of 2011, created 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.

     Thank you for investing in Invesco Van Kampen V.I. Mid Cap Value Fund.

1 Source: 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.

Thomas Copper
Chartered Financial Analyst, portfolio manager, is co-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 Tulane University and an M.B.A. from Baylor University.

John Mazanec
Portfolio manager, is co-lead 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.

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.

Invesco Van Kampen V.I. Mid Cap Value Fund

Your Fund’s Long-Term Performance

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

Fund and index data from 12/31/01*

* During the reporting period, Invesco changed its policy regarding growth of $10,000 charts. For funds older than 10 years, we previously showed performance since inception. Going forward, we will show performance for the most recent 10 years, since this more accurately reflects the experience of the typical shareholder. As a result, charts now may include benchmarks that did not appear previously, because the funds’ inception pre-dated the benchmarks’ inception. Also, all charts will now be presented using a linear format.

Past performance cannot guarantee comparable future results.

     As noted earlier in this report, the Fund

has adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer

group market measures. These additional benchmarks will now be included in the chart above.

Average Annual Total Returns

As of 12/31/11

Series I Shares
Inception (1/2/97)			8.96	%
	10	Years	5.58
	5	Years	1.69
	1	Year	0.92
Series II Shares
Inception (5/5/03)			9.65	%
	5	Years	1.59
	1	Year	0.83

Effective June 1, 2010, Class I and Class II shares of the predecessor fund, Universal Institutional Funds Mid Cap Value Portfolio, 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 1.04% and 1.14%, 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 1.04% and 1.29%, 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 by the distributor 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.

n	Unless otherwise stated, information presented in this report is as of December 31, 2011, 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. 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 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.

     Medium capitalization companies risk. 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.

     Value investing style risk. 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.

     Foreign securities risk. 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) risk. Investing in 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.

     Derivatives risk. 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. Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss.

     Depositary receipts risk. 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.

     Futures risk. 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.

     Options risk. 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.

     Swaps risk. 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. Swaps are subject to credit risk and counterparty risk.

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^® 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 Lipper VUF Mid-Cap Value Funds Index is an unmanaged index considered representative of mid-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.

Invesco Van Kampen V.I. Mid Cap Value Fund

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, 2011

	Shares		Value
Common Stocks & Other Equity Interests–91.32%
Alternative Carriers–3.28%
tw telecom inc.(b)		495,045	$	9,593,972
Asset Management & Custody Banks–2.17%
Northern Trust Corp.		160,123		6,350,478
Computer Hardware–2.11%
Diebold, Inc.		205,863		6,190,300
Data Processing & Outsourced Services–3.40%
Fidelity National Information Services, Inc.		374,080		9,946,787
Diversified Banks–1.81%
Comerica Inc.		205,527		5,302,597
Electric Utilities–4.16%
Edison International		258,118		10,686,085
Great Plains Energy Inc.		68,307		1,487,727
				12,173,812
Electronic Manufacturing Services–1.27%
Flextronics International Ltd. (Singapore)(b)		655,408		3,709,609
Food Distributors–1.77%
Sysco Corp.		176,752		5,184,136
Food Retail–3.28%
Safeway Inc.		456,214		9,598,743
Health Care Facilities–4.50%
Brookdale Senior Living Inc.(b)		387,091		6,731,512
HealthSouth Corp.(b)		365,546		6,459,198
				13,190,710
Heavy Electrical Equipment–2.41%
Babcock & Wilcox Co. (The)(b)		292,388		7,058,246
Home Furnishings–2.80%
Mohawk Industries, Inc.(b)		136,956		8,196,817
Housewares & Specialties–3.35%
Newell Rubbermaid Inc.		608,194		9,822,333
Industrial Machinery–2.89%
Snap-on Inc.		167,291		8,468,270
Insurance Brokers–5.32%
Marsh & McLennan Cos., Inc.		272,137		8,604,972
Willis Group Holdings PLC (Ireland)		179,928		6,981,206
				15,586,178
Integrated Oil & Gas–2.01%
Murphy Oil Corp.		105,714		5,892,498
Investment Banking & Brokerage–0.43%
Charles Schwab Corp. (The)		112,431		1,265,973
Life Sciences Tools & Services–0.78%
PerkinElmer, Inc.		114,238		2,284,760
Motorcycle Manufacturers–2.95%
Harley-Davidson, Inc.		221,987		8,628,635
Multi-Utilities–3.74%
CenterPoint Energy, Inc.		280,861		5,642,497
Wisconsin Energy Corp.		151,776		5,306,089
				10,948,586
Office Electronics–2.82%
Zebra Technologies Corp.–Class A(b)		231,015		8,265,717
Oil & Gas Exploration & Production–2.25%
Pioneer Natural Resources Co.		73,593		6,585,102
Oil & Gas Storage & Transportation–5.35%
El Paso Corp.		232,922		6,188,737
Williams Cos., Inc. (The)		287,083		9,479,481
				15,668,218
Packaged Foods & Meats–3.07%
ConAgra Foods, Inc.		340,048		8,977,267
Paper Packaging–2.15%
Sonoco Products Co.		190,876		6,291,273
Personal Products–1.18%
Avon Products, Inc.		197,665		3,453,208
Property & Casualty Insurance–2.80%
ACE Ltd. (Switzerland)		116,775		8,188,263
Regional Banks–4.12%
BB&T Corp.		247,764		6,236,220
Wintrust Financial Corp.		208,255		5,841,553
				12,077,773
Restaurants–2.20%
Darden Restaurants, Inc.		141,424		6,446,106
Retail REIT’s–1.57%
Weingarten Realty Investors		210,500		4,593,110
Specialty Chemicals–5.80%
Valspar Corp. (The)		197,730		7,705,538
W.R. Grace & Co.(b)		202,332		9,291,086
				16,996,624

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
Specialty Stores–2.04%
Staples, Inc.		429,616	$	5,967,366
Systems Software–0.75%
BMC Software, Inc.(b)		67,285		2,205,602
Trucking–0.79%
Swift Transportation Co.(b)		280,319		2,309,829
Total Common Stocks & Other Equity Interests (Cost $246,162,461)				267,418,898
Preferred Stocks–0.85%
Health Care Facilities–0.85%
HealthSouth Corp., Series A, $65.00 Conv. Pfd. (Cost $2,375,148)		2,851		2,502,465
Money Market Funds–8.54%
Liquid Assets Portfolio–Institutional Class(c)		12,499,280		12,499,280
Premier Portfolio–Institutional Class(c)		12,499,279		12,499,279
Total Money Market Funds (Cost $24,998,559)				24,998,559
TOTAL INVESTMENTS–100.71% (Cost $273,536,168)				294,919,922
OTHER ASSETS LESS LIABILITIES–(0.71)%				(2,068,529	)
NET ASSETS–100.00%			$	292,851,393

Investment Abbreviations:

Conv.	– Convertible
Pfd.	– Preferred
REIT	– Real Estate Investment Trust

Notes to Schedule of Investments:

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

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

Invesco Van Kampen V.I. Mid Cap Value Fund

Statement of Assets and Liabilities

December 31, 2011

Assets:
Investments, at value (Cost $248,537,609)	$	269,921,363
Investments in affiliated money market funds, at value and cost		24,998,559
Total investments, at value (Cost $273,536,168)		294,919,922
Receivable for:
Fund shares sold		261,091
Dividends		394,942
Fund expenses absorbed		58,650
Investment for trustee deferred compensation and retirement plans		6,340
Total assets		295,640,945
Liabilities:
Payable for:
Investments purchased		436,695
Fund shares reacquired		1,743,404
Accrued fees to affiliates		559,173
Accrued other operating expenses		34,730
Trustee deferred compensation and retirement plans		15,550
Total liabilities		2,789,552
Net assets applicable to shares outstanding	$	292,851,393
Net assets consist of:
Shares of beneficial interest	$	304,720,060
Undistributed net investment income		2,221,986
Undistributed net realized gain (loss)		(35,474,407	)
Unrealized appreciation		21,383,754
	$	292,851,393
Net Assets:
Series I	$	129,657,839
Series II	$	163,193,554
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Series I		10,122,503
Series II		12,813,562
Series I:
Net asset value per share	$	12.81
Series II:
Net asset value per share	$	12.74

Statement of Operations

For the year ended December 31, 2011

Investment income:
Dividends	$	5,316,000
Dividends from affiliated money market funds (includes securities lending income of $840)		21,453
Total investment income		5,337,453
Expenses:
Advisory fees		2,188,533
Administrative services fees		627,203
Custodian fees		11,444
Distribution fees — Series II		395,145
Transfer agent fees		17,349
Trustees’ and officers’ fees and benefits		29,463
Other		61,201
Total expenses		3,330,338
Less: Fees waived		(263,131	)
Net expenses		3,067,207
Net investment income		2,270,246
Realized and unrealized gain (loss) from:
Net realized gain from:
Investment securities (includes net gains from securities sold to affiliates of $242,971)		18,429,421
Option contracts written		235,366
		18,664,787
Change in net unrealized appreciation (depreciation) of:
Investment securities		(17,445,006	)
Option contracts written		24,255
		(17,420,751	)
Net realized and unrealized gain		1,244,036
Net increase in net assets resulting from operations	$	3,514,282

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, 2011 and 2010

	2011			2010
Operations:
Net investment income	$	2,270,246		$	1,977,012
Net realized gain		18,664,787			15,581,654
Change in net unrealized appreciation (depreciation)		(17,420,751	)		42,000,250
Net increase in net assets resulting from operations		3,514,282			59,558,916
Distributions to shareholders from net investment income:
Series I		(979,194	)		(1,468,515	)
Series II		(992,806	)		(1,117,364	)
Total distributions from net investment income		(1,972,000	)		(2,585,879	)
Share transactions–net:
Series I		(33,633,456	)		(26,790,802	)
Series II		10,486,103			4,375,683
Net increase (decrease) in net assets resulting from share transactions		(23,147,353	)		(22,415,119	)
Net increase (decrease) in net assets		(21,605,071	)		34,557,918
Net assets:
Beginning of year		314,456,464			279,898,546
End of year (includes undistributed net investment income of $2,221,986 and $1,955,705, respectively)	$	292,851,393		$	314,456,464

Notes to Financial Statements

December 31, 2011

NOTE 1—Significant Accounting Policies

Invesco Van Kampen V.I. Mid Cap 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 twenty-eight 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 above-average total return over a market cycle of three to five years by investing in 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”).
	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. Mid Cap Value 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. 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 trade 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 economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
	Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans.
	Securities for which market quotations are not readily available or 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. Mid Cap Value 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 affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any.
J.	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.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

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

Average Daily Net Assets	Rate
First $1 billion		0	.72%
Over $1 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 Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such

Invesco Van Kampen V.I. Mid Cap Value 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 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% (after 12b-1 fee waivers) of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless 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.

  For the year ended December 31, 2011, the Adviser waived advisory fees of $26,056.

  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, 2011, Invesco was paid $79,911 for accounting and fund administrative services and reimbursed $547,292 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, 2011, 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. IDI has contractually agreed to waiver 0.15% of Rule 12b-1 plan fees on Series II shares through at least June 30, 2012. 12b-1 fees before fee waivers incurred under the Plan are detailed in the Statement of Operations of distribution fees. For the year ended December 31, 2011, 12b-1 fees incurred for Series II shares were $158,070 after fee waivers of $237,075.

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

NOTE 3—Additional Valuation Information

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

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

  The following is a summary of the tiered valuation input levels, as of December 31, 2011. 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, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Equity Securities	$	292,417,457	$	2,502,465	$	—	$	294,919,922

Invesco Van Kampen V.I. Mid Cap Value Fund

NOTE 4—Derivative Investments

Effect of Derivative Instruments for the year ended December 31, 2011

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
	Options*
Realized Gain
Equity Risk	$	235,366
Change in Unrealized Appreciation
Equity Risk		24,255
Total	$	259,621

*  The average notional value of options outstanding during the period was $136,257.

Transactions During the Period
	Call Option Contracts
	Number of			Premiums
	Contracts			Received
Beginning of period		215		$	67,120
Written		4,525			763,280
Closed		(3,825	)		(665,848	)
Expired		(915	)		(164,552	)
End of period		—		$	—

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, 2011, the Fund engaged in securities purchases of $343,989 and securities sales of $1,335,213, which resulted in net realized gains of $242,971.

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, 2011, the Fund paid legal fees of $1,506 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner 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 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, 2011 and 2010:

	2011		2010
Ordinary income	$	1,972,000	$	2,585,879

Invesco Van Kampen V.I. Mid Cap Value Fund

Tax Components of Net Assets at Period-End:

	2011
Undistributed ordinary income	$	2,237,334
Net unrealized appreciation — investments		20,407,991
Temporary book/tax differences		(15,348	)
Capital loss carryforward		(34,498,644	)
Shares of beneficial interest		304,720,060
Total net assets	$	292,851,393

  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 and straddle loss deferrals.

  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 Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund utilized $18,721,035 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, 2011, which expires as follows:

Capital Loss Carryforward
Expiration	Short-Term		Long-Term		Total
December 31, 2017	$	34,498,644	$	—	$	34,498,644

*  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, 2011 was $87,718,714 and $117,801,486, 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	$	38,283,654
Aggregate unrealized (depreciation) of investment securities		(17,875,663	)
Net unrealized appreciation of investment securities	$	20,407,991
Cost of investments for tax purposes is $274,511,931.

NOTE 10—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of real estate investment trust distributions, on December 31, 2011, undistributed net investment income was decreased by $31,965 and undistributed net realized gain (loss) was increased by $31,965. The reclassification had no effect on the net assets of the Fund.

Invesco Van Kampen V.I. Mid Cap Value Fund

NOTE 11—Share Information

	Summary of Share Activity
	Years ended December 31,
	2011(a)						2010
	Shares			Amount			Shares			Amount
Sold:
Series I		487,789		$	6,244,179			735,988		$	8,422,816
Series II		3,734,030			47,368,062			2,861,100			32,148,812
Issued as reinvestment of dividends:
Series I		89,752			979,194			130,767			1,468,515
Series II		91,503			992,806			100,033			1,117,364
Reacquired:
Series I		(3,155,419	)		(40,856,829	)		(3,211,388	)		(36,682,133	)
Series II		(2,959,998	)		(37,874,765	)		(2,538,804	)		(28,890,493	)
Net increase (decrease) in share activity		(1,712,343	)	$	(23,147,353	)		(1,922,304	)	$	(22,415,119	)

^(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 Fund 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(a)		unrealized)			operations			income			gains			Distributions			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Series I
Year ended 12/31/11	$	12.79	$	0.10	$	0.01		$	0.11		$	(0.09	)	$	—		$	(0.09	)	$	12.81		1.00	%	$	129,658		0.96	%(d)		0.97	%(d)		0.80	%(d)		30	%
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			1.03			0.72			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
Series II
Year ended 12/31/11		12.72		0.09		0.01			0.10			(0.08	)		—			(0.08	)		12.74		0.91			163,194		1.06	(d)		1.22	(d)		0.70	(d)		30
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			1.32			0.62			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

(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 $145,913 and $158,050 for Series I and Series II shares, respectively.

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 (one of the funds constituting AIM Variable Insurance Funds (Invesco Variable Insurance Funds), hereafter referred to as the “Fund”) at December 31, 2011, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for each of the two 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 audits 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, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. 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 14, 2012

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, 2011 through December 31, 2011.

  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	(07/01/11)		(12/31/11)1		Period2		(12/31/11)		Period2		Ratio
Series I	$	1,000.00	$	940.10	$	4.30	$	1,020.77	$	4.48		0.88	%
Series II		1,000.00		940.30		4.79		1,020.27		4.99		0.98

1	The actual ending account value is based on the actual total return of the Fund for the period July 1, 2011 through December 31, 2011, 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, 2011:

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by 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)	140	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, 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); 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 Corporate Class Inc. (corporate mutual fund company) and Invesco Canada Fund Inc. (corporate mutual fund company); Director, Chairman and Chief Executive Officer, Invesco Canada Ltd. (formerly known as Invesco Trimark Ltd./Invesco Trimark Ltèe) (registered investment adviser and registered transfer agent); 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); Director, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Director, Chief Executive Officer and President, Van Kampen Exchange Corp.	140	None
		Formerly: Director and Chairman, Van Kampen Investor Services Inc.: Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); and Van Kampen Investments Inc.; Director and President, AIM GP Canada Inc. (general partner for limited partnerships); and Van Kampen Advisors, Inc.; Director and Chief Executive Officer, Invesco Trimark Dealer Inc. (registered broker dealer); 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.
Wayne W. 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	158	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)	140	ACE Limited (insurance company); and Investment Company Institute
		Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)

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.

Invesco Van Kampen V.I. Mid Cap Value Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
Independent Trustees—(continued)
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	158	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
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	140	Director and Chairman, C.D. Stimson Company (a real estate investment company)
James T. Bunch — 1942 Trustee	2004	Managing Member, Grumman Hill Group LLC (family office private equity management) Formerly: Founder, Green, Manning & Bunch Ltd. (investment banking firm)(1988-2010); Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	140	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney F. 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.	158	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)	140	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	140	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	140	Director, Reich & Tang Funds (16 portfolios)

Invesco Van Kampen V.I. Mid Cap Value Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Independent Trustees—(continued)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	140	None
Larry Soll — 1942 Trustee	2004	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	140	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.	158	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	140	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer, The 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.) 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, Invesco Investment Advisers LLC (formerly known as Van Kampen Asset Management); Secretary and General Counsel, Van Kampen Funds 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 and Secretary, Van Kampen Advisors Inc.; Director Vice President, Secretary and General Counsel Van Kampen Investor Services Inc.; Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; and Van Kampen Investments Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; 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 Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.); and Vice President, The Invesco Funds Formerly: Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) and Van Kampen Investor Services Inc.; 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

Invesco Van Kampen V.I. Mid Cap Value Fund

Trustees and Officers—(continued)

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
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	in Fund Complex	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Overseen by Trustee	Held by Trustee
	Other Officers—(continued)
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser). Formerly: Treasurer, 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, 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 Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.) and Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); 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); and 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: Senior Vice President, Van Kampen Investments Inc.; 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
Yinka Akinsola — 1977 Anti-Money Laundering Compliance Officer	2011	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.), Invesco Management Group, Inc., The Invesco Funds, Invesco Van Kampen Closed-End Funds, Van Kampen Exchange Corp. and Van Kampen Funds 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.) 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, 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.) and Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.). Formerly: Chief Compliance Officer, Invesco Van Kampen Closed-End Funds 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; Senior Vice President, Van Kampen Investments Inc.; 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., Invesco Senior Secured Management, Inc. (registered investment adviser) and Van Kampen Investor Services Inc.; 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	Investment Adviser Invesco Advisers, Inc. 1555 Peachtree Street, N.E. Atlanta, GA 30309	Distributor Invesco Distributors, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX 77046-1173	Auditors PricewaterhouseCoopers LLP 1201 Louisiana Street, Suite 2900 Houston, TX 77002-5678
Counsel to the Fund Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103	Counsel to the Independent Trustees Kramer, Levin, Naftalis & Frankel LLP 1177 Avenue of the Americas New York, NY 10036-2714	Transfer Agent Invesco Investment Services, Inc. 11 Greenway Plaza, Suite 2500 Houston, TX77046-1173	Custodian State Street Bank and Trust Company 225 Franklin Boston, MA 02110-2801

Invesco Van Kampen V.I. Mid Cap Value Fund

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”). There were no amendments to the Code during the period covered by the report. The Registrant did not grant any waivers, including implicit waivers, from any provisions of the Code to the PEO or PFO during the period covered by this report.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The Board of Trustees has determined that the Registrant has at least one audit committee financial expert serving on its Audit Committee. The Audit Committee financial 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 2011	Fees Billed for		year end 2010
	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 2011		Requirement(1)	fiscal year end 2010		Requirement(1)
Audit Fees	$	665,525	N/A	$	972,550	N/A
Audit-Related Fees(2)	$	42,500	0%	$	0	0%
Tax Fees(3)	$	162,500	0%	$	99,500	0%
All Other Fees	$	0	0%	$	0	0%
Total Fees	$	870,525	0%	$	1,072,050	0%

PWC billed the Registrant aggregate non-audit fees of $205,000 for the fiscal year ended 2011, and $99,500 for the fiscal year ended 2010, 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)	Audit-Related fees for the fiscal year end December 31, 2011 includes fees billed for agreed upon procedures related to fund mergers.
(3)	Tax fees for the fiscal year end December 31, 2011 includes fees billed for reviewing tax returns. Tax fees for the fiscal year end December 31, 2010 includes fees billed for reviewing tax returns.

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
	2011 That Were		Provided for fiscal year	2010 That Were		Provided for fiscal year
	Required		end 2011 Pursuant to	Required		end 2010 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 2011, and $0 for the fiscal year ended 2010, 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 February 21, 2012, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the PEO and PFO, to assess the effectiveness of the Registrant’s disclosure controls and procedures, as that term is defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”), as amended. Based on that evaluation, the Registrant’s officers, including the PEO and PFO, concluded that, as of February 21, 2012, 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. TAYLORPhilip A. Taylor
	Principal Executive Officer
Date:	February 27, 2012

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. TAYLORPhilip A. Taylor
	Principal Executive Officer
Date:	February 27, 2012
By:	/s/ Sheri MorrisSheri Morris
	Principal Financial Officer
Date:	February 27, 2012

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.