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: 811-2606
INVESCO Money Market Funds, Inc.
--------------------------------------------------
(Exact name of registrant as specified in charter)
4350 South Monaco Street, Denver, Colorado 80237
----------------------------------------------------------
(Address of principal executive offices) (Zip code)
Glen A. Payne, Esq., 4350 South Monaco Street, Denver, Colorado 80237
---------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 720-624-6300
Date of fiscal year end: May 31, 2003
Date of reporting period: May 31, 2003
ITEM 1. REPORT TO SHAREHOLDERS
MAY 31, 2003
ANNUAL REPORT
INVESCO MONEY MARKET FUNDS, INC.
CASH RESERVES FUND
TAX-FREE MONEY FUND
U.S. GOVERNMENT MONEY FUND
"IN JUNE, THE FED LOWERED THE FEDERAL FUNDS TARGET RATE 25 BASIS POINTS TO A
53-YEAR LOW OF 1%."
SEE PAGE 5
[INVESCO ICON] INVESCO(R)
FELLOW SHAREHOLDER:
[PHOTOGRAPH OF RAYMOND R. CUNNINGHAM OMITTED]
A HAVEN AND SMART CASH MANAGEMENT TOOL IN ONE
The recent period of market volatility has provided challenges for every
investor. Yet it is this kind of environment that underscores the value of
investing at least a portion of your portfolio in money market funds, which
provide both a short-term savings vehicle and a haven against market volatility.
I'd like to reiterate our approach to money market management by providing some
insight into our different investment alternatives.
o CASH RESERVES FUND provides competitive current yields from a diversified
portfolio of short-term obligations, as well as convenient access to your
money through free check writing. (Checks subject to a minimum amount of
$500.)
o TAX-FREE MONEY FUND helps you shelter earnings from federal taxes by
investing in the debt obligations of states and municipalities. (Income may
be subject to state and local taxes, as well as the federal Alternative
Minimum Tax.)
o U.S. GOVERNMENT MONEY FUND is designed for investors who are primarily
concerned with safeguarding their principal, and invests in securities
backed by the federal government and its agencies. This fund offers the
highest credit quality of all INVESCO money market alternatives.
o TREASURER'S MONEY MARKET RESERVE FUND and TREASURER'S TAX-EXEMPT RESERVE
FUND provide potentially low-cost, higher-yield money market options for
institutions and individuals with more than $100,000 to invest ($1 million
as of July 1, 2003, for new investors). The expense ratio of the two
Treasurer's Funds is fixed at 0.25%, which is extremely competitive.
(Treasurer's Tax-Exempt Reserve Fund income may be subject to state and
local taxes, as well as the federal Alternative Minimum Tax.)
Remember, money market funds are not insured or guaranteed by the federal
government, Federal Deposit Insurance Corporation or any other government
agency. And while the funds seek to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the funds.
Nonetheless, we believe these funds provide investors with a low-risk and
increasingly convenient cash management tool that offers both flexibility and
protection against market volatility.
Sincerely,
/s/Ray Cunningham
Ray Cunningham
President and CEO, INVESCO Funds Group, Inc.
"WHILE THE ECONOMY IS BEING STIMULATED ON MANY FRONT, IT REMAINS UP TO THE
CORPORATE SECTOR TO START SPENDING AND HIRING BEFORE A SOLID ECONOMIC RECOVERY
CAN OCCUR."
- -- SEE PAGE 5
TABLE OF CONTENTS
LETTER FROM THE PRESIDENT & CEO........... 1
MARKET HEADLINES.......................... 3
AN INTERVIEW WITH LYMAN MISSIMER.......... 4
INVESTMENT HOLDINGS....................... 6
FINANCIAL STATEMENTS......................14
NOTES TO FINANCIAL STATEMENTS.............21
FINANCIAL HIGHLIGHTS......................25
OTHER INFORMATION.........................31
FOR THE LATEST YIELD INFORMATION, CALL US AT 1-800-525-8085 OR VISIT OUR WEB
SITE AT INVESCOFUNDS.COM.
INVESCO MUTUAL FUNDS PROXY VOTING POLICY
The Boards of Directors of the INVESCO Mutual Funds have expressly delegated to
INVESCO Funds Group, Inc. ("INVESCO") the responsibility to vote proxies related
to the securities held in the funds' portfolios. Under this authority, INVESCO
is required by the Boards of Directors to act solely in the interests of
shareholders of the funds. Other INVESCO clients who have delegated proxy voting
authority to INVESCO similarly require that proxy votes be cast in the best
interests of the clients.
On behalf of the funds and its other clients, INVESCO acquires and holds a
company's securities in the portfolios it manages in the expectation that they
will be a good investment and appreciate in value. As such, INVESCO votes
proxies with a focus on the investment implications of each matter upon which a
vote is solicited.
A copy of the description of the funds' proxy voting policy and procedures, as
administered by INVESCO, is available without charge by calling 1-800-525-8085.
It is also available on the Web site of the Securities and Exchange Commission,
at www.sec.gov, and on the funds' Web site, invescofunds.com.
MARKET HEADLINES
"...INVESTORS FLOCKED TO INVESTMENTS WITH DEFENSIVE REPUTATIONS."
MARKET OVERVIEW:
JUNE 2002 THROUGH MAY 2003
After two years of declines in the stock market, investors had hoped to see an
improvement through 2002 and into 2003. Instead, the market continued downward,
with the major stock indexes registering losses for the 12-month period ended
May 31, 2003.
There were a number of factors responsible for the year's decline. First, a
series of corporate accounting scandals dominated the news well into summer
2002, tainting investors' perceptions of the market. Talk of Enron's collapse
lingered -- and new scandals surrounding companies such as WorldCom Inc, Tyco
International Ltd, and HealthSouth Corp followed. Furthermore, geopolitical
uncertainty persisted throughout the year to varying degrees as threats of
terrorist attacks, a nuclear standoff between India and Pakistan, speculation
regarding the U.S.'s intentions toward Iraq, and North Korea's refusal to obey a
1994 arms agreement all clouded the landscape. In addition, oil prices surged,
as inventories were pressured by strikes in Venezuela, violence in Nigeria, and
concerns over a potential war with Iraq.
In addition, a generally weak economy and disappointing corporate earnings were
ongoing stories. Although a few rallies were ignited by hopes that a recovery
might be forthcoming -- most notably, a two-month surge that began on October
10, 2002, a week-long rally during the first days of January 2003, and a
mini-rebound in mid-March on the heels of the long-awaited start to the war in
Iraq -- they could not be sustained in such an uncertain environment.
Meanwhile, investors flocked to investments with defensive reputations.
Fixed-income securities advanced, benefiting from the flight-to-quality trend as
well as the Federal Reserve's decision to leave interest rates unchanged until
November, when a surprisingly steep 50-basis-point cut was implemented. Gold
stocks and real estate investment trusts were other top performers. Conversely,
high-growth sectors, including technology and telecommunications, declined.
As the fiscal period came to a close, investors seemed to be growing
increasingly optimistic. For one, quick success by the American-led coalition in
the liberation of Iraq muted one source of uncertainty. Additionally, investors
were encouraged by the economic rebound in the weeks following the war, during
which consumer confidence and manufacturing activity improved.
To be sure, risks remained. However, the end of the fiscal year saw investors
focusing on the positive rather than worrying about potential negatives. For
example, the dollar's slide versus the euro could have stirred concerns that
foreign investors might sell dollar-denominated assets. Instead, investors
pointed to the potentially stimulative effects that the weak dollar might have
on exports and manufacturing. Investors' newfound optimism was also reflected in
the market's technical profile at period-end, which saw trading volume spike
higher during rallies, while dropping as stocks slid, reflecting an overall
desire on the part of investors to buy stocks.
While we don't believe equity markets are necessarily out of the woods yet, the
economic progress made since the resolution of the war has made the outlook for
equities at the end of May 2003 brighter than it was this time last year. For
this recovery to find its legs, investors and consumers will likely need to see
a sustained upturn in the employment market before the bear market is officially
pronounced dead.
QUESTIONS & ANSWERS
AN INTERVIEW WITH FUND MANAGER LYMAN MISSIMER
[PHOTOGRAPH OF LYMAN MISSIMER OMITTED]
LYMAN MISSIMER, CFA
TEAM LEADER
VICE PRESIDENT LYMAN MISSIMER III LEADS A TEAM OF MANAGERS FOR THE FUND. HE
JOINED AIM CAPITAL MANAGEMENT, INC, WHICH IS THE SUB-ADVISOR FOR INVESCO'S MONEY
MARKET PORTFOLIOS, IN 1995 AND HAS MORE THAN 20 YEARS OF INVESTING EXPERIENCE.
LYMAN EARNED HIS BACHELOR'S DEGREE FROM DARTMOUTH COLLEGE AND AN M.B.A. FROM THE
UNIVERSITY OF CHICAGO GRADUATE SCHOOL OF BUSINESS. HE IS A CHARTERED FINANCIAL
ANALYST CHARTERHOLDER AND A MEMBER OF THE ASSOCIATION OF INVESTMENT MANAGEMENT
RESEARCH.
SPUTTERING RECOVERY MAY LEAD TO LOWER RATES
WHAT CONDITIONS AND EVENTS INFLUENCED MONEY MARKET PERFORMANCE DURING THE PAST
YEAR?
LYMAN MISSIMER: The past year was a tumultuous one for the markets beginning
with corporate scandals, volatile oil and stock market prices, turmoil in the
Middle East, a war with Iraq, the SARS scare, continuing terrorist threats, and
talk of deflation from the Federal Reserve.
The year started with the federal funds target already at an extremely
stimulative 40-year low of 1.75%. But many market participants believed that the
Fed would soon raise rates to bring the target up to a more neutral level.
However, the economy, which had been fairly robust early in 2002, began to slow
and the Fed changed the balance of risks to a better chance of a weakening
economy in August. Expectations for lower rates were fueled further when two
federal open market committee (FOMC) members dissented from the majority and
voted to lower rates. Typically, the FOMC, which is the active arm of the Fed,
presents a unified front to the public, so the dissension was an unusual
occurrence.
As it appeared that fourth quarter growth would slow considerably and
geopolitical uncertainties were starting to increase, the Fed decided to lower
rates by 50 basis points in November 2002. This was the twelfth rate decrease
since January of 2001 and brought the federal funds target rate to 1.25%, the
lowest level since the 1950s.
As the New Year began, the markets focused on Iraq and whether Saddam Hussein
would allow full and complete searches for weapons of mass destruction by the
U.N. weapons inspection team. Oil prices surged as instability in Venezuela and
uncertainty in Iraq had investors considering the potential for a large drop in
oil supplies. This led to further concerns over the health of the U.S. economy.
March was a historic month as the U.S.-led coalition invaded Iraq to remove the
ruthless dictator and his alleged weapons of mass destruction. Once the war
began and it became apparent that the U.S. and its allies would be successful,
the markets looked for a post-war bounce from the stock market and the economy.
Meanwhile, Fed Chairman Alan Greenspan announced to Congress in May that the
risks for disinflation were now greater than the risks for inflation. As a
result, the fixed-income markets assumed that there would be no pre-emptive
tightening in the near future, and the Treasury yield curve flattened, as
10-year yields dropped to 40-year lows of about 3.30%.
"DURING THE PERIOD, THE CORPORATE CREDIT SITUATION CONTINUED TO BE SHAKY, AND WE
EMPHASIZED MAINTAINING HIGH CREDIT QUALITY ACROSS ALL PORTFOLIOS."
Market participants are still debating whether the economy will show a post-war
bounce, whether the Federal Reserve will continue to lower short-term rates, or
whether they will have to resort to unconventional measures, such as buying
longer-term securities to help stimulate the economy.
WHAT IS YOUR CURRENT STRATEGY AND HOW HAVE SPECIFIC DECISIONS INFLUENCED THE
PORTFOLIOS' PERFORMANCE?
LYMAN MISSIMER: At the beginning of the period, the markets were expecting that
the next move from the Fed would be to increase short-term rates. In response,
we had shortened the funds' weighted average maturities (WAMs) to the 30-day
range. As the year progressed, however, it became apparent that the economy was
starting to struggle, and the yield curve flattened out. As that transition
unfolded, we extended the portfolios to lock in the higher yields.
The Fed reduced rates in November to 1.25%. From that time, our goal was to
maintain the portfolios' WAMs in the 40- to 50-day range. Since cash flows
generally remained volatile, we maintained this barbell strategy, with overnight
cash positions held at high levels to provide liquidity. During the period, the
corporate credit situation continued to be shaky, and we emphasized maintaining
high credit quality across all portfolios. As high-quality credits grew
increasingly rare and as spreads narrowed, we utilized more government-sponsored
agencies across the portfolios to extend out along the yield curve.
WHAT IS YOUR OUTLOOK FOR THE REMAINDER OF 2003?
LYMAN MISSIMER: As the second quarter came to a close, the U.S. economy
continued to struggle. Second quarter gross domestic product growth was expected
to be in the 1% to 2% range. Most analysts now expect growth to increase to the
3% to 4% range during the second half of 2003, but many uncertainties remain.
Low interest rates continue to stimulate the consumer and housing sectors, and
it appears that the corporate scandals are largely behind us. All major stock
markets have risen significantly since the end of the war. Hope is that the SARS
situation has been contained and that diplomacy will continue to progress
positively in the Middle East. This will help keep energy prices from rising.
The recently passed tax cut should further stimulate demand, and a declining
dollar should help increase U.S. exports and help push the U.S. manufacturing
sector out of a recession-like environment.
Although the Fed has discussed the potential for deflation, Chairman Greenspan
still maintains that it is a remote possibility. While the economy is being
stimulated on many fronts, it remains up to the corporate sector to start
spending and hiring before a solid economic recovery can occur.
HOW ARE YOU CURRENTLY POSITIONING THE PORTFOLIOS?
LYMAN MISSIMER: In June, the Fed lowered the federal funds target rate 25 basis
points to a 53-year low of 1%. The Fed's statement afterward was very similar to
its announcement after its May meeting, with risks to the economy being balanced
and concerns about disinflation rather than inflation. There is hope that this
will be the last short-term rate decrease in this cycle, but unless the economy
picks up, there is a risk of further rate reductions. In response, we have
extended the portfolios' WAMs into the 50- to 55-day range to lock in yields,
and we are looking to buy yields above the 1% target rate. Assuming that the
economy does start to look healthier, we expect the Fed may begin to raise rates
back up to a more neutral level sometime in 2004.
INVESTMENT HOLDINGS
STATEMENT OF INVESTMENT SECURITIES
INVESCO MONEY MARKET FUNDS, INC.
MAY 31, 2003
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE% AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------
CASH RESERVES FUND
103.53 SHORT-TERM INVESTMENTS
26.90 US Government Agency Obligations
Federal Home Loan Bank, Bonds
4/21/2004 1.42 $ 5,000,000 $ 5,000,000
5/11/2004 1.38 10,000,000 10,000,000
6/4/2004 1.40 4,500,000 4,500,000
6/7/2004 1.30 13,000,000 13,000,000
Federal Home Loan Bank, 6/2/2003 1.28 100,000,000 99,996,500
Overseas Private Investment, Gtd Participation
Certificates, F/VR, Series 497-2002-333-IG(a)
6/15/2009 1.23 28,300,000 28,300,000
========================================================================================================
TOTAL US GOVERNMENT AGENCY OBLIGATIONS
(Amortized Cost $160,796,500) 160,796,500
========================================================================================================
2.51 CORPORATE BONDS
2.51 ASSET-BACKED SECURITIES --
MULTI-PURPOSE
Beta Finance, Medium-Term Notes(b), 6/2/2003
(Amortized Cost $15,000,400) 1.61 15,000,000 15,000,400
========================================================================================================
42.59 COMMERCIAL PAPER
5.84 ASSET-BACKED SECURITIES --
COMMERCIAL LOANS & LEASES
Atlantis One Funding
8/27/2003 1.27 30,000,000 29,909,268
8/28/2003 1.23 5,000,000 4,985,205
========================================================================================================
34,894,473
4.18 ASSET-BACKED SECURITIES --
CONSUMER RECEIVABLES
New Center Asset Trust, Series 1, 6/26/2003 1.29 25,000,000 24,977,861
========================================================================================================
17.54 ASSET-BACKED SECURITIES --
MULTI-PURPOSE
Asset Securitization, 6/3/2003 1.25 35,000,000 34,997,604
Charta Corp, 7/7/2003 1.25 30,000,000 29,963,033
Edison Asset Securitization LLC, 11/10/2003 1.21 20,000,000 19,892,843
Mont Blanc Capital, 6/9/2003 1.29 20,000,000 19,994,348
========================================================================================================
104,847,828
5.01 ASSET BACKED SECURITIES --
TRADE RECEIVABLES
Bills Securitisation Ltd, 6/10/2003 1.29 20,000,000 19,993,625
Eureka Securitization, 7/22/2003 1.28 10,000,000 9,982,125
========================================================================================================
29,975,750
5.01 BANKS
Wachovia Corp, 8/6/2003 1.30 30,000,000 29,929,868
========================================================================================================
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE% AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------
1.66 CONSUMER FINANCE
General Electric Capital International
Funding, Series A, 10/20/2003 1.29 $ 10,000,000 $ 9,950,582
========================================================================================================
3.35 DIVERSIFIED FINANCIAL SERVICES
Morgan Stanley Dean Witter & Co
F/VR, 8/21/2003 1.46 20,000,000 20,000,000
========================================================================================================
TOTAL COMMERCIAL PAPER
(Amortized Cost $254,576,362) 254,576,362
========================================================================================================
2.07 ASSET-BACKED NOTES
0.40 FULLY BACKED
Capital One Auto Finance Trust, Notes
Series 2002-B, Class A1, 9/15/2003 1.76 2,411,784 2,411,784
========================================================================================================
1.67 RESIDENTIAL MORTGAGE LOANS
Holmes Financing PLC, Notes, F/VR, Series 1
Class A, 4/15/2004 1.27 10,000,000 10,000,000
========================================================================================================
TOTAL ASSET-BACKED NOTES
(Amortized Cost $12,411,784) 12,411,784
========================================================================================================
5.02 CERTIFICATES OF DEPOSIT -- BANKS
Credit Agricole Indosuez, 7/9/2003
(Cost $30,000,000) 1.23 30,000,000 30,000,000
========================================================================================================
5.69 PROMISSORY NOTES -- DIVERSIFIED
FINANCIAL SERVICES
Goldman Sachs Group, F/VR(e)
9/17/2003 1.51 14,000,000 14,000,000
10/2/2003 1.58 20,000,000 20,000,000
========================================================================================================
TOTAL PROMISSORY NOTES (Cost $34,000,000) 34,000,000
========================================================================================================
1.17 FUNDING AGREEMENTS --
LIFE & HEALTH INSURANCE
New York Life Insurance(e), 4/7/2004
(Cost $7,000,000) 1.38 7,000,000 7,000,000
========================================================================================================
17.58 REPURCHASE AGREEMENTS
Repurchase Agreement with State Street dated
5/30/2003 due 6/2/2003 at 1.260%, repurchased
at $105,123,227 (Collateralized by: Fannie Mae,
Bonds, due 3/24/2005 at 1.720%, value $48,459,333,
Fannie Mae, Notes, due 5/14/2003 at 1.450%,
value $47,996,332 and Federal Farm Credit Bank ,
Bonds, due 10/1/2003 at 3.125%, value $11,342,076)
(Cost $105,112,190) 105,112,190 105,112,190
========================================================================================================
103.53 TOTAL INVESTMENTS AT VALUE
(AMORTIZED COST $618,897,236)(c) 618,897,236
========================================================================================================
(3.53) OTHER ASSETS LESS LIABILITIES (21,113,102)
========================================================================================================
100.00 NET ASSETS AT VALUE $ 597,784,134
========================================================================================================
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE% AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------
TAX-FREE MONEY FUND
101.23 SHORT-TERM INVESTMENTS
99.40 Municipal Notes(a)
4.88 ALABAMA
Birmingham Med Clinic Brd, Alabama
(LOC - AmSouth Bank), AR, Med Clinic Rev,
UAHSF Series 1991, 12/1/2026 1.35 $ 1,300,000 $ 1,300,000
========================================================================================================
5.86 FLORIDA
Lee Cnty School Brd, Florida (FSA Insured), FR,
Ctfs of Participation, Series 1993A, 8/1/2004 1.10 200,000 205,299
Seminole Cnty Indl Dev Auth, Florida (Florida Living
Nursing Ctr Proj) (LOC - Bank of America), VR,
Hlth Facil Rev, Series 1991, 2/1/2011 1.39 1,200,000 1,200,000
South Indian River Wtr Ctl Dist, Florida (Egret
Landing - Phase I), FR, Sect 15 Impt Bds,
Special Assmt, 11/1/2018 1.05 150,000 156,988
========================================================================================================
1,562,287
2.44 GEORGIA
Floyd Cnty Dev Auth, Georgia (Shorter College Proj)
(LOC - SunTrust Bank), AR, Rev, Series 1998,
6/1/2017 1.34 500,000 500,000
Newnan Hosp Auth, Georgia (Newnan Hosp Proj)
(MBIA Insured), FR, Rev Anticipation Ctfs,
Series 2002, 1/1/2004 1.29 150,000 151,051
========================================================================================================
651,051
9.70 ILLINOIS
Hoffman Estates, Illinois (Hoffman Estates
Econ Dev Proj Area) (AMBAC Insured), FR, Tax
Increment Rev Ref, Series 1997, 11/15/2003 1.11 250,000 254,426
Illinois Dev Fin Auth (6 West Hubbard Street Proj)
(LOC - LaSalle Natl Bank), F/FR, IDR,
Series 1986, 12/1/2016 1.25 765,000 765,000
Illinois Hlth Facils Auth (Blessing Hosp) (FSA
Insured), VRD, Rev, Series 1999B, 11/15/2029 1.20 200,000 200,000
Peoria, Illinois (Easter Seal Ctr Proj)
(LOC - Bank One), AR, Hlth Care Facil Rev,
Series 1997, 5/1/2007 1.30 1,050,000 1,050,000
Schillar Park School Dist #81, Illinois (Cook Cnty)
(FSA Insured), FR, School Ref, Series 2002A,
12/1/2003 1.63 115,000 115,210
School Dist #U-46, Illinois (Kane, Cook & DuPage
Cntys) (AMBAC Insured), FR, Gen Oblig
School Bds, Series 2003A, 1/1/2004 1.10 200,000 201,038
========================================================================================================
2,585,674
2.63 INDIANA
Newton Cnty, Indiana (Intec Group Proj)
(LOC - LaSalle Natl Bank), A/FR, Econ Dev Rev,
Series 1994, 9/1/2010 1.29 500,000 500,000
Purdue Univ Trustees, Indiana, FR, Purdue Univ
Student Fee, Rev, Series R, 7/1/2003 1.67 200,000 200,379
========================================================================================================
700,379
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE% AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------
3.75 IOWA
Iowa Fin Auth (YMCA Proj) (LOC - Wells Fargo & Co),
VR, Econ Dev Rev, Series 2000, 6/1/2010 1.30 $ 1,000,000 $ 1,000,000
========================================================================================================
1.13 KANSAS
Unified Govt of Wyandotte Cnty/Kansas City, Kansas
(MBIA Insured), FR, Gen Oblig Impt,
Series 2002-A, 8/1/2003 1.50 300,000 300,247
========================================================================================================
0.94 KENTUCKY
Kentucky Asset/Liability Commn, FR,
Gen Fund, TRAN, 2002 Series A, 6/26/2003 1.67 250,000 250,184
========================================================================================================
6.69 MARYLAND
Frederick Cnty, Maryland (Buckingham's
Choice Facil) (LOC - Branch Banking & Trust),
EXTRAS, Retirement Cmnty Rev, Series 1997 C,
1/1/2027 1.25 1,500,000 1,500,000
Mayor & City Council of Baltimore, Maryland
(FGIC Insured), FR, Tax-Exempt
Gen Oblig Cons Pub Impt, Series A, 10/15/2003 1.08 275,000 281,442
========================================================================================================
1,781,442
1.92 MICHIGAN
Lowell, Michigan (Kent Cnty) (MBIA Insured), FR,
Elec Supply System Rev, Series 2002, 8/1/2003 1.50 130,000 130,322
Muskegon, Michigan (Muskegon Cnty), FR, Michigan
Transn Fund Ref, Series 2002, 6/1/2003 1.40 150,000 150,000
Ottawa Cnty, Michigan (Holland Area Sewage
Disp System), FR, Gen Oblig, Ottawa Cnty 2001
Ref, 6/1/2004 1.10 225,000 230,230
========================================================================================================
510,552
1.13 MONTANA
Havre, Montana (Safeway Inc Proj)
(LOC - Duetsche Bank), VR, IDR, Ref,
Series 1991, 6/1/2006 1.30 300,000 300,000
========================================================================================================
0.75 NEVADA
Clark Cnty School Dist, Nevada (FGIC Insured), FR,
Gen Oblig Bldg, Series July 1, 1999A, 6/15/2003 1.37 200,000 200,276
========================================================================================================
1.50 NEW JERSEY
Gloucester Cnty, New Jersey (FGIC Insured), FR,
Gen Oblig, Series 2001, 7/1/2003 1.45 400,000 400,991
========================================================================================================
4.20 NEW MEXICO
New Mexico Hosp Equip Ln Council
(Dialysis Clinic Proj) (LOC - SunTrust Bank),
AR, Rev, Series 2000, 7/1/2025 1.34 1,120,000 1,120,000
========================================================================================================
0.57 NEW YORK
Westchester Cnty, New York, FR, Gen Oblig,
Series 1991B, 9/15/2003 1.00 150,000 152,042
========================================================================================================
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE% AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------
8.65 NORTH CAROLINA
Carolinas HlthCare System (North Carolina)
(Charlotte-Mecklenberg Hosp Auth), FR, Hlth
Care Rev, Series 2003A, 1/15/2004 1.15 $ 150,000 $ 150,786
Carteret Cnty Indl Facils & Pollution Ctl Fing Auth,
North Carolina (Texasgulf Proj)
(LOC - BNP-Paribas), VR, PCR,
Series 1985, 10/1/2005 1.33 2,000,000 2,000,000
North Carolina Eastern Muni Pwr Agency
(MBIA Insured), FR, Pwr System Rev,
Series 1996A, 1/1/2004 1.65 150,000 153,336
========================================================================================================
2,304,122
0.02 OHIO
Univ of Toledo, Ohio (State Univ of Ohio)
(FGIC Insured), VR, Gen Rcpts, Rev, Series 2002,
6/1/2032 1.25 5,000 5,000
========================================================================================================
2.00 OREGON
Cent Lincoln People's Util Dist, Oregon
(AMBAC Insured) , FR, Elec System Rev Ref,
Series 2002, 12/1/2003 1.50 330,000 330,818
Emerald People's Util Dist, Oregon (Lane Cnty)
(FSA Insured), FR, Elec System Ref Rev,
2003 Series A, 11/1/2003 1.10 200,000 200,744
========================================================================================================
531,562
3.21 PENNSYLVANIA
Canon-McMillan School Dist, Pennsylvania
(Washington Cnty) (FSA Insured), FR, Gen
Oblig, Series C of 2002, 9/1/2003 1.55 250,000 250,279
Pennsylvania (AMBAC Insured),
FR, Gen Oblig, Ref, Series of 1997, 9/15/2003 1.15 200,000 202,295
Pennsylvania Infrastructure Invt Auth (Pennvest Ln
Pool Proj), A/FR, Series 1991A
9/1/2009 1.75 200,000 206,043
9/1/2010 1.65 190,000 195,790
========================================================================================================
854,407
0.94 SOUTH CAROLINA
Anderson Cnty, South Carolina (Belton Inds Proj)
(LOC - Bank of America), AR, Indl Rev,
Series 1991A, 7/1/2004 1.35 100,000 100,000
Rock Hill, South Carolina (FSA Insured), FR,
Combined Util System Rev Impt, Ref,
Series 2003A, 1/1/2004 1.30 150,000 150,609
========================================================================================================
250,609
0.53 SOUTH DAKOTA
South Dakota Brd of Regts (MBIA Insured), FR,
Univ of South Dakota Hsg & Auxiliary Facils Rev,
Series 2003, 4/1/2004 1.18 140,000 140,941
========================================================================================================
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE% AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------
23.07 TENNESSEE
Hamilton Cnty Indl Dev Brd, Tennessee
(LOC - Mellon Bank), AR, IDR, Ref,
(Trade Ctr Hotel Assoc #1 Ltd
Partnership Proj), Series 1998A,
9/1/2016 1.30 $ 1,400,000 $ 1,400,000
(Trade Ctr Hotel Assoc #3 Ltd
Partnership Proj), Series 1998C,
9/1/2016 1.30 1,797,250 1,797,250
Hawkins Cnty Indl Dev Brd, Tennessee
(LOC - Wachovia Bank), AR, IDR, Ref,
1998 Series B, 10/1/2027 1.30 1,450,000 1,450,000
Tullahoma Indl Dev Brd, Tennessee
(Marine Master Project) (LOC - AmSouth Bank),
AR, Rev, Series 2002, 10/1/2017 1.54 1,500,000 1,500,000
========================================================================================================
6,147,250
7.53 TEXAS
Corpus Christi, Texas (FSA Insured), FR,
Combination Tax & Muni Hotel Occupancy Tax,
Rev, Ctfs of Oblig, Series 2002, 9/1/2003 1.40 200,000 200,000
Dallas, Texas, FR, Gen Oblig, Series 1994, 2/15/2011 1.20 250,000 257,733
Donna Indpt School Dist, Texas (Hidalgo Cnty)
(PSFG Insured), FR, Unltd Tax School Bldg Bds,
Series 1998, 2/15/2004 1.25 200,000 205,232
Grapevine-Colleyville Indpt School Dist, Texas
(Tarrant & Dallas Cntys) (PSFG Insured), FR,
Unltd Tax School Bldg & Ref, Series 1995,
8/15/2003 1.10 335,000 337,826
Houston Cmnty College System, Texas
(Harris & Fort Bend Cntys) (AMBAC Insured), FR,
Student Fee Rev, Series 1999, 4/15/2004 1.20 100,000 103,063
North East Indpt School Dist, Texas (Bexar Cnty)
(PSFG Insured), FR, Unltd Tax School Bldg Bds,
Series 1999, 10/1/2003 1.58 100,000 101,628
Northside Indpt School Dist, Texas (Bexar Cnty)
(PSFG Insured), A/FR, Unltd Tax School Bldg
Bds, Series 2001-A, 8/1/2003 1.60 200,000 200,132
Texas, FR, TRAN, Series 2002, 8/29/2003 1.48 600,000 601,829
========================================================================================================
2,007,443
1.13 UTAH
Tremonton City, Utah (Box Elder Cnty)
(La-Z-Boy Chair Proj) (LOC - Bank One), VRD,
IDR, Series 1990, 6/1/2026 1.30 300,000 300,000
========================================================================================================
1.41 VIRGINIA
Stafford Cnty Indl Dev Auth, Virginia
(Safeway Inc Proj) (LOC - Duetsche Bank & Trust),
AR, IDR, Ref, Series 1993, 6/1/2003 1.45 375,000 375,000
========================================================================================================
2.82 WISCONSIN
Neenah-Menasha Sewerage Commn, Wisconsin
(Winnebago Cnty) (MBIA Insured), FR,
Sewerage System Rev, Series 2003A, 12/1/2003 1.20 200,000 200,797
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE% AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------
Wisconsin Hlth & Edl Facils Auth
(Riverview Hosp Assn) (LOC - Firstar Bank),
VRD, Rev, Series 2001, 10/1/2030 1.35 $ 550,000 $ 550,000
========================================================================================================
750,797
TOTAL MUNICIPAL NOTES
(Amortized Cost $26,482,256) 26,482,256
========================================================================================================
1.83 REPURCHASE AGREEMENTS
Repurchase Agreement with State Street dated
5/30/2003 due 6/2/2003 at 1.260% repurchased
at $488,547 (Collateralized by Freddie Mac,
Medium-Term Notes, due 1/21/2005 at
2.150%, value $501,694) (Cost $488,496) 488,496 488,496
========================================================================================================
101.23 TOTAL INVESTMENTS AT VALUE
(AMORTIZED COST $26,970,752)(c) 26,970,752
========================================================================================================
(1.23) OTHER ASSETS LESS LIABILITIES (327,325)
========================================================================================================
100.00 NET ASSETS AT VALUE $ 26,643,427
========================================================================================================
U.S. GOVERNMENT MONEY FUND
99.58 SHORT-TERM INVESTMENTS
85.34 US GOVERNMENT AGENCY OBLIGATIONS
Fannie Mae
10/27/2003 1.20 $ 500,000 $ 507,739
11/15/2003 1.35 500,000 504,033
12/1/2003 1.22 500,000 510,558
Federal Farm Credit Bank
9/2/2003 1.85 1,610,000 1,625,228
11/6/2003 1.50 300,000 304,242
Federal Home Loan Bank
6/2/2003 1.28 17,000,000 16,999,405
6/11/2003 1.77 500,000 500,542
6/23/2003 1.75 500,000 501,281
6/24/2003 2.04 1,000,000 1,002,306
7/25/2003 2.24 2,000,000 2,000,000
8/15/2003 1.20 750,000 754,449
9/2/2003 1.85 1,000,000 1,009,463
11/4/2003 1.50 250,000 254,055
11/14/2003 1.50 2,545,000 2,591,252
4/12/2004 1.34 1,500,000 1,499,445
5/7/2004 1.40 1,000,000 1,000,000
6/18/2004 1.25 2,000,000 2,000,000
Federal Home Loan Bank, F/VR
Series 300, 9/15/2003 1.15 5,000,000 4,999,277
Overseas Private Investment, Gtd Participation
Certificates, VR
Series 2000-044A, 5/15/2015(a) 1.18 5,700,000 5,700,000
Series 2000-044A3, 4/1/2014(a) 1.18 3,000,000 3,000,000
Sallie Mae, F/VR, 6/19/2003 1.27 10,000,000 10,000,000
========================================================================================================
TOTAL US GOVERNMENT AGENCY OBLIGATIONS
(Amortized Cost $57,263,275) 57,263,275
========================================================================================================
EFFECTIVE
INTEREST PRINCIPAL
% DESCRIPTION RATE% AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------
14.24 REPURCHASE AGREEMENTS
Repurchase Agreement with State Street dated
5/30/2003 due 6/2/2003 at 1.260% repurchased
at $9,556,810 (Collateralized by Federal Home
Loan Bank, Bonds, due 4/12/2004 at 1.300%,
value $9,755,649) (Cost $9,555,807) $ 9,555,807 $ 9,555,807
========================================================================================================
99.58 TOTAL INVESTMENTS AT VALUE
(AMORTIZED COST $66,819,082)(c) 66,819,082
========================================================================================================
0.42 OTHER ASSETS LESS LIABILITIES 278,265
========================================================================================================
100.00 NET ASSETS AT VALUE $ 67,097,347
========================================================================================================
(a) All securities with a maturity date greater than one year have either a variable rate, demand
feature, prerefunded, optional or mandatory put resulting in an effective maturity of one year
or less.
(b) Securities acquired pursuant to Rule 144A. The fund deems such securities to be "liquid" because
an institutional market exists.
(c) Also represents cost of investments for income tax purposes.
The following acronyms may be used in portfolio descriptions:
A/FR(d) -- Adjustable/Fixed Rate
AMBAC -- American Municipal Bond Assurance Corporation
AR(d) -- Adjustable Rate
EXTRAS -- Extendable Rate Adjustable Securities
FGIC -- Financial Guaranty Insurance Company
F/FR(d) -- Floating/Fixed Rate
FR -- Fixed Rate
FSA -- Financial Security Assurance
F/VR(d) -- Floating/Variable Rate
IDR -- Industrial Development Revenue
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
PCR -- Pollution Control Revenue
PSFG -- Permanent School Fund Guarantee Program
TRAN -- Tax & Revenue Anticipation Notes
UAHSF -- University of Alabama Health Services Foundation
VR(d) -- Variable Rate
VRD(d) -- Variable Rate Demand
(d) Rate is subject to change. Rate shown reflects current rate.
(e) The following are restricted and illiquid securities at May 31, 2003:
SCHEDULE OF RESTRICTED AND ILLIQUID SECURITIES
VALUE AS
ACQUISITION ACQUISITION % OF
DESCRIPTION DATE COST NET ASSETS
- --------------------------------------------------------------------------------
CASH RESERVES FUND
Goldman Sachs Group, F/VR
9/17/2003 3/21/2003 $ 14,000,000 2.34%
10/2/2003 3/13/2003 20,000,000 3.35
New York Life Insurance, 4/7/2004 4/3/2003 7,000,000 1.17
================================================================================
6.86%
================================================================================
See Notes to Financial Statements
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
INVESCO MONEY MARKET FUNDS, INC.
MAY 31, 2003
CASH TAX-FREE
RESERVES MONEY
FUND FUND
- --------------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost(a) $ 618,897,236 $ 26,970,752
================================================================================
At Value(a) $ 618,897,236 $ 26,970,752
Cash 0 54
Receivables:
Fund Shares Sold 4,212,973 79,615
Interest 596,021 123,705
Prepaid Expenses and Other Assets 122,494 27,137
================================================================================
TOTAL ASSETS 623,828,724 27,201,263
================================================================================
LIABILITIES
Payables:
Custodian 1,472 0
Distributions to Shareholders 8,466 675
Investment Securities Purchased 0 440,967
Fund Shares Repurchased 25,882,975 99,641
Accrued Distribution Expenses
Class A 3,367 --
Class B 462 --
Class C 21,476 --
Accrued Expenses and Other Payables 126,372 16,553
================================================================================
TOTAL LIABILITIES 26,044,590 557,836
================================================================================
NET ASSETS AT VALUE, Applicable to
Shares Outstanding $ 597,784,134 $ 26,643,427
================================================================================
NET ASSETS AT VALUE:
Investor Class $ 570,867,083 $ 26,643,427
================================================================================
Class A $ 8,915,545 --
================================================================================
Class B $ 599,070 --
================================================================================
Class C $ 17,402,436 --
================================================================================
Shares Outstanding(b)
Investor Class 570,867,083 26,643,427
Class A 8,915,545 --
Class B 599,070 --
Class C 17,402,436 --
================================================================================
NET ASSET VALUE, Offering and Redemption
Price per Share
Investor Class $ 1.00 $ 1.00
Class A $ 1.00 --
Class B $ 1.00 --
Class C $ 1.00 --
================================================================================
(a) Investment securities at cost and value at May 31, 2003 include repurchase
agreements of $105,112,190 and $488,496 for Cash Reserves and Tax-Free
Money Funds, respectively.
(b) The INVESCO Money Market Funds, Inc. have 20 billion authorized shares of
common stock, par value of $0.01 per share. Of such shares, 18.8 billion
have been allocated to Cash Reserves Fund and 500 million to Tax-Free Money
Fund: 4.7 billion to each class of Cash Reserves Fund and 500 million to
Tax-Free Money - Investor Class. Paid-in capital was $597,784,134 and
$26,643,427 for Cash Reserves and Tax-Free Money Fund, respectively.
See Notes to Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
(CONTINUED)
INVESCO MONEY MARKET FUNDS, INC.
MAY 31, 2003
U.S. GOVERNMENT
MONEY
FUND
- --------------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost(a) $ 66,819,082
================================================================================
At Value(a) $ 66,819,082
Receivables:
Fund Shares Sold 264,765
Interest 221,960
Prepaid Expenses and Other Assets 33,046
================================================================================
TOTAL ASSETS 67,338,853
================================================================================
LIABILITIES
Payables:
Custodian 38
Distributions to Shareholders 329
Fund Shares Repurchased 220,132
Accrued Expenses and Other Payables 21,007
================================================================================
TOTAL LIABILITIES 241,506
================================================================================
NET ASSETS AT VALUE, Applicable to Shares Outstanding $ 67,097,347
================================================================================
Shares Outstanding(b) 67,097,347
================================================================================
NET ASSET VALUE, Offering and Redemption Price per Share $ 1.00
================================================================================
(a) Investment securities at cost and value at May 31, 2003 includes a
repurchase agreement of $9,555,807 .
(b) The INVESCO Money Market Funds, Inc. have 20 billion authorized shares of
common stock, par value of $0.01 per share. Of such shares, 500 million has
been allocated to U.S. Government Money Fund - Investor Class.
Paid-in-capital for U.S. Government Money Fund was $67,097,347.
See Notes to Financial Statements
STATEMENT OF OPERATIONS
INVESCO MONEY MARKET FUNDS, INC.
YEAR ENDED MAY 31, 2003
CASH TAX-FREE
RESERVES MONEY
FUND FUND
- --------------------------------------------------------------------------------
INVESTMENT INCOME
INTEREST INCOME $ 14,112,098 $ 445,552
================================================================================
EXPENSES
Investment Advisory Fees 3,445,659 156,418
Distribution Expenses
Class A 15,627 --
Class B 5,535 --
Class C 342,484 --
Transfer Agent Fees
Investor Class 2,865,888 96,636
Class A 4,446 --
Class B 1,192 --
Class C 171,315 --
Administrative Services Fees 406,849 24,078
Custodian Fees and Expenses 125,599 8,723
Directors' Fees and Expenses 80,566 10,586
Professional Fees and Expenses 89,697 27,154
Registration Fees and Expenses
Investor Class 109,014 17,064
Class A 252 --
Class B 186 --
Class C 5,102 --
Reports to Shareholders 315,206 10,029
Other Expenses 35,563 5,718
================================================================================
TOTAL EXPENSES 8,020,180 356,406
Fees and Expenses Absorbed/Reimbursed
by Investment Adviser
Investor Class 0 (89,606)
Class B (4,102) --
Class C (268,032) --
Fees and Expenses Paid Indirectly (524) 0
================================================================================
NET EXPENSES 7,747,522 266,800
================================================================================
NET INVESTMENT INCOME AND NET INCREASE IN
NET ASSETS FROM OPERATIONS $ 6,364,576 $ 178,752
================================================================================
See Notes to Financial Statements
STATEMENT OF OPERATIONS (CONTINUED)
INVESCO MONEY MARKET FUNDS, INC.
YEAR ENDED MAY 31, 2003
U.S. GOVERNMENT
MONEY
FUND
- --------------------------------------------------------------------------------
INVESTMENT INCOME
INTEREST INCOME $ 1,162,651
================================================================================
EXPENSES
Investment Advisory Fees 368,428
Transfer Agent Fees 299,092
Administrative Services Fees 43,159
Custodian Fees and Expenses 11,788
Directors' Fees and Expenses 14,784
Professional Fees and Expenses 21,483
Registration Fees and Expenses 24,369
Reports to Shareholders 32,617
Other Expenses 4,677
================================================================================
TOTAL EXPENSES 820,397
Fees and Expenses Absorbed by Investment Adviser (191,120)
================================================================================
NET EXPENSES 629,277
================================================================================
NET INVESTMENT INCOME AND NET INCREASE IN
NET ASSETS FROM OPERATIONS $ 533,374
================================================================================
See Notes to Financial Statements
STATEMENT OF CHANGES IN NET ASSETS
CASH RESERVES FUND
YEAR ENDED MAY 31
- ------------------------------------------------------------------------------------
2003 2002
OPERATIONS AND DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income Earned and
Distributed to Shareholders
Investor Class $ 6,227,342 $ 17,796,534
Class A 20,915 4,839
Class B 1,845 3,283
Class C 114,474 420,688
======================================================================================
$ 6,364,576 $ 18,225,344
======================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares
Investor Class $ 19,488,956,950 $ 23,212,451,413
Class A 165,682,044 3,356,987
Class B 1,075,652 594,915
Class C 1,572,492,634 2,598,809,105
Reinvestment of Distributions
Investor Class 5,434,912 14,770,191
Class A 9,588 4,551
Class B 1,327 3,065
Class C 62,702 162,324
======================================================================================
21,233,715,809 25,830,152,551
Amounts Paid for Repurchases of Shares
Investor Class (20,045,506,084) (22,985,728,920)
Class A (158,339,989) (1,798,690)
Class B (886,595) (252,742)
Class C (1,607,385,823) (2,561,512,041)
=======================================================================================
(21,812,118,491) (25,549,292,393)
NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS (578,402,682) 280,860,158
NET ASSETS
Beginning of Period 1,176,186,816 895,326,658
=======================================================================================
End of Period $ 597,784,134 $ 1,176,186,816
=======================================================================================
--------------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold
Investor Class 19,488,956,950 23,212,451,413
Class A 165,682,044 3,356,987
Class B 1,075,652 594,915
Class C 1,572,492,634 2,598,809,105
Shares Issued from Reinvestment of Distributions
Investor Class 5,434,912 14,770,191
Class A 9,588 4,551
Class B 1,327 3,065
Class C 62,702 162,324
======================================================================================
21,233,715,809 25,830,152,551
Shares Repurchased
Investor Class (20,045,506,084) (22,985,728,920)
Class A (158,339,989) (1,798,690)
Class B (886,595) (252,742)
Class C (1,607,385,823) (2,561,512,041)
=======================================================================================
(21,812,118,491) (25,549,292,393)
NET INCREASE (DECREASE) IN FUND SHARES (578,402,682) 280,860,158
=======================================================================================
See Notes to Financial Statements
STATEMENT OF CHANGES IN NET ASSETS
(CONTINUED)
TAX-FREE MONEY FUND
YEAR ENDED MAY 31
- ------------------------------------------------------------------------------------
2003 2002
OPERATIONS AND DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income Earned and
Distributed to Shareholders $ 178,752 $ 415,165
=====================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares $ 36,281,861 $ 75,518,443
Reinvestment of Distributions 157,851 380,240
=====================================================================================
36,439,712 75,898,683
Amounts Paid for Repurchases of Shares (41,933,785) (79,815,841)
=====================================================================================
NET DECREASE IN NET ASSETS
FROM FUND SHARE TRANSACTIONS (5,494,073) (3,917,158)
NET ASSETS
Beginning of Period 32,137,500 36,054,658
=====================================================================================
End of Period $ 26,643,427 $ 32,137,500
=====================================================================================
--------------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 36,281,861 75,518,443
Shares Issued from Reinvestment of Distributions 157,851 380,240
=====================================================================================
36,439,712 75,898,683
Shares Repurchased (41,933,785) (79,815,841)
=====================================================================================
NET DECREASE IN FUND SHARES (5,494,073) (3,917,158)
=====================================================================================
See Notes to Financial Statements
STATEMENT OF CHANGES IN NET ASSETS
(CONTINUED)
U.S. GOVERNMENT MONEY FUND
YEAR ENDED MAY 31
- ------------------------------------------------------------------------------------
2003 2002
OPERATIONS AND DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income Earned and
Distributed to Shareholders $ 533,374 $ 1,540,454
=====================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares $ 231,418,527 $ 1,448,716,464
Reinvestment of Distributions 502,735 1,454,825
=====================================================================================
231,921,262 1,450,171,289
Amounts Paid for Repurchases of Shares (240,544,136) (1,449,830,999)
=====================================================================================
NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS (8,622,874) 340,290
NET ASSETS
Beginning of Period 75,720,221 75,379,931
=====================================================================================
End of Period $ 67,097,347 $ 75,720,221
=====================================================================================
--------------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 231,418,527 1,448,716,464
Shares Issued from Reinvestment of Distributions 502,735 1,454,825
=====================================================================================
231,921,262 1,450,171,289
Shares Repurchased (240,544,136) (1,449,830,999)
=====================================================================================
NET INCREASE (DECREASE) IN FUND SHARES (8,622,874) 340,290
=====================================================================================
See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS
INVESCO MONEY MARKET FUNDS, INC.
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Money Market
Funds, Inc. is incorporated in Maryland and presently consists of three separate
funds: Cash Reserves Fund, Tax-Free Money Fund and U.S. Government Money Fund
(individually the "Fund" and collectively, the "Funds"). The investment
objectives of the Funds are: to seek a high level of current income for Cash
Reserves Fund; to seek a high level of current income exempt from federal income
taxation for Tax-Free Money Fund; and to seek current income by investing only
in debt obligations issued or guaranteed by the U.S. Government or its agencies
for U.S. Government Money Fund. INVESCO Money Market Funds, Inc. is registered
under the Investment Company Act of 1940 (the "Act") as a diversified, open-end
management investment company.
Income, expenses (other than those attributable to a specific class) and
realized and unrealized gains and losses are allocated daily to each class of
shares based on the relative proportion of net assets represented by such class.
Operating expenses directly attributable to a specific class are charged against
operations of that class. Cash Reserves Fund also offers Class A, Class B and
Class C shares, which are subject to a contingent deferred sales charge paid by
the redeeming shareholder. Class A and Class B shares are not appropriate for
direct investment and are for exchange only from other INVESCO Funds' Class A
and Class B shares. Class B shares convert to Class A shares after eight years
along with a pro rata portion of its reinvested dividends and distributions.
Effective April 1, 2002, the Investor Class shares are offered only to
grandfathered investors who have established and maintained an account in any of
the funds managed and distributed by INVESCO Funds Group, Inc. ("IFG") in
Investor Class shares prior to April 1, 2002.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
A. SECURITY VALUATION -- Securities held by the Funds are valued at their market
value determined by the amortized cost method of valuation. If management
believes that such valuation does not reflect the securities' fair value, or
events or circumstances that may affect the value of portfolio securities are
identified by the time that the net asset value per share is determined, these
securities are valued at fair value as determined in good faith under procedures
established by the Fund's board of directors. Restricted and illiquid securities
are valued in accordance with procedures established by the Fund's board of
directors.
B. REPURCHASE AGREEMENTS -- Repurchase agreements held by the Fund are fully
collateralized by securities issued by the U.S. Government, its agencies or
instrumentalities and such collateral is in the possession of the Fund's
custodian. The collateral is evaluated daily to ensure its market value exceeds
the current market value of the repurchase agreements including accrued
interest. In the event of default on the obligation to repurchase, the Fund has
the right to liquidate the collateral and apply the proceeds in satisfaction of
the obligation. In the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral or proceeds may be
subject to legal proceedings.
C. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Security transactions
are accounted for on the trade date. Interest income, which may be comprised of
stated coupon rate, market discount, original issue discount or amortized
premium, is recorded on the accrual basis. The Fund amortizes discounts or
premiums paid on purchases of securities to the earliest put, call or maturity
date. Cost is determined on the specific identification basis.
Restricted securities held by a Fund may not be sold except in exempt
transactions or in a public offering registered under the Securities Act of
1933. The risk of investing in such securities is generally greater than the
risk of investing in the securities of widely held, publicly traded companies.
Lack of a secondary market and resale restrictions may result in the inability
of a Fund to sell a security at a fair price and may substantially delay the
sale of the security which each Fund seeks to sell. In addition, these
securities may exhibit greater price volatility than securities for which
secondary markets exist.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- All of the Fund's net
investment income is distributed to shareholders by dividends declared daily and
paid monthly. Such dividends are automatically reinvested at the month-end net
asset value, unless the shareholder requests a cash payment.
E. TAX INFORMATION -- The Fund has complied, and continues to comply, with the
provisions of the Internal Revenue Code applicable to regulated investment
companies and, accordingly, has made or intends to make sufficient distributions
of net investment income and net realized capital gains, if any, to relieve it
from all federal and state income taxes and federal excise taxes. Dividends paid
by the Fund from net investment income are, for federal income tax purposes,
taxable as ordinary income to shareholders. Of the distributions paid by
Tax-Free Money Fund for the year ended May 31, 2003, 99.19% were exempt from
federal income taxes.
F. EXPENSES -- Each Fund or Class bears expenses incurred specifically on its
behalf and, in addition, each Fund or Class bears a portion of general expenses,
based on the relative net assets of each Fund or Class.
Under an agreement between each Fund and the Fund's Custodian, certain Custodian
Fees and Expenses are reduced by credits granted by the Custodian from any
temporarily uninvested cash. Such credits are included in Fees and Expenses Paid
Indirectly in the Statement of Operations.
NOTE 2 -- INVESTMENT ADVISORY AND OTHER AGREEMENTS. IFG serves as the Funds'
investment adviser. As compensation for its services to the Funds, IFG receives
an investment advisory fee which is accrued daily at the applicable rate and
paid monthly. The fee is based on the annual rate of each Funds' average net
assets as follows: 0.50% on the first $300 million of average net assets;
reduced to 0.40% on the next $200 million of average net assets; and 0.30% on
average net assets in excess of $500 million.
A Sub-Advisory Agreement between IFG and AIM Capital Management, Inc. ("AIM"),
affiliated with IFG, provides that investment decisions of the Funds are made by
AIM. Fees for such sub-advisory services are paid by IFG.
A master distribution plan and agreement for Cash Reserves Fund Class A, Class B
& Class C shares pursuant to Rule 12b-1 of the Act (the "Plans") provides for
compensation of certain promotional and other sales related costs to INVESCO
Distributors, Inc. ("IDI" or the "Distributor"), a wholly owned subsidiary of
IFG. Class A shares of the Fund pay compensation to IDI at a rate of 0.35% of
annual average net assets. Class B and Class C shares of the Fund pay
compensation to IDI at a rate of 1.00% of annual average net assets. Of these
amounts, IDI may pay a service fee of 0.25% of the average net assets of the
Class A, Class B or Class C shares to selected dealers and financial
institutions who furnish continuing personal shareholder services to their
customers who purchase and own the applicable class of shares of the Fund. Any
amounts not paid as a service fee under the Plans would constitute an
asset-based sales charge. The Plans also impose caps on the total sales charges,
including asset-based sales charges, that may be paid by the respective class.
Any unreimbursed expenses IDI incurs with respect to Class A and Class C shares
in any fiscal year can not be recovered in subsequent years. Effective July 1,
2003, the Distributor will change to AIM Distributors, Inc., an affiliate of
IFG. For the year ended May 31, 2003, amounts paid to the Distributor were as
follows:
CLASS CLASS CLASS
FUND A B C
- --------------------------------------------------------------------------------
Cash Reserves Fund $ 12,456 $ 5,420 $ 355,481
If the Class B Plan is terminated, the board of directors may allow the Class B
shares to continue payments of the asset-based sales charge to the Distributor
for allowable unreimbursed expenses incurred for distributing shares before the
Class B Plan was terminated. The Class B Plan allows for the carry-forward of
distribution expenses, to be recovered from asset-based sales charges in
subsequent fiscal periods. Distribution fees related to the Distributor for the
year ended May 31, 2003, for Class B were as follows:
DISTRIBUTOR'S DISTRIBUTOR'S
AGGREGATE UNREIMBURSED
UNREIMBURSED EXPENSES AS %
AMOUNT RETAINED EXPENSES OF NET ASSETS
FUND BY DISTRIBUTOR UNDER PLAN OF CLASS
- -----------------------------------------------------------------------------------------------
Cash Reserves Fund - Class B Plan $ 4,405 $ 0 0.00%
IFG receives a transfer agent fee from each Class at an annual rate of $29.50
per shareholder account, or, where applicable, per participant in an omnibus
account, per year. IFG may pay such fee for participants in omnibus accounts to
affiliates or third parties. Aggregate fees collected for such omnibus accounts
for the year ended May 31, 2003 amounted to $226,250 for Cash Reserves Fund,
$226 for Tax-Free Money Fund and $23,558 for U.S. Government Money Fund, of
which $490, $127 and $1,839, respectively, were retained by IFG. The fee is paid
monthly at one-twelfth of the annual fee and is based upon the actual number of
accounts in existence during each month.
In accordance with an Administrative Services Agreement, each Fund pays IFG an
annual fee of $10,000, plus an additional amount computed at an annual rate of
0.045% of average net assets to provide administrative, accounting and clerical
services. The fee is accrued daily and paid monthly.
IFG has voluntarily agreed to absorb and assume certain fees and expenses
incurred by the Funds for the year ended May 31, 2003. IFG is entitled to
reimbursement from a Fund share class that has fees and expenses voluntarily
absorbed pursuant to this arrangement if such reimbursements do not cause a
share class to exceed voluntary expense limitations and the reimbursement is
made within three years after IFG incurred the expense.
At May 31, 2003, the reimbursement that may be potentially made by the Funds to
IFG that will expire during the years ended May 31, 2005 and 2006, are as
follows:
INVESTOR CLASS CLASS CLASS
FUND CLASS A B C
- -------------------------------------------------------------------------------------------
YEAR ENDED MAY 31, 2005
Cash Reserves Fund $ 0 $ 0 $ 176 $28,335
Tax-Free Money Fund 7,390 -- -- --
U.S. Government Money Fund 15,663 -- -- --
INVESTOR CLASS CLASS CLASS
FUND CLASS A B C
- -------------------------------------------------------------------------------------------
YEAR ENDED MAY 31, 2006
Cash Reserves Fund $ 0 $ 0 $ 3,926 $239,697
Tax-Free Money Fund 82,216 -- -- --
U.S. Government Money Fund 175,457 -- -- --
NOTE 3 -- TRANSACTIONS WITH AFFILIATES. Certain of the Funds' officers and
directors are also officers and directors of IFG, AIM or IDI.
Each Fund has adopted a retirement plan covering all independent directors of
the Fund who will have served as an independent director for at least five years
at the time of retirement. Benefits under this plan are based on an annual rate
as defined in the plan agreement, as amended March 1, 2001. Effective November
8, 2002, the plan provides that a director, prior to retirement, may elect to
convert amounts accrued under this plan into a new deferred retirement plan.
Pension expenses for the year ended May 31, 2003 included in Directors' Fees and
Expenses in the Statement of Operations, and pension liability included in
Accrued Expenses, in the Statement of Assets and Liabilities were as follows:
PENSION PENSION
FUND EXPENSES LIABILITY
- --------------------------------------------------------------------------------
Cash Reserves Fund $ 32,418 $ 65,406
Tax-Free Money Fund 977 3,701
U.S. Government Money Fund 3,375 7,181
The independent directors have contributed to a deferred fee agreement plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as directors of the INVESCO Funds. The
deferred amounts may be invested in the shares of any of the INVESCO Funds,
excluding the INVESCO Variable Investment Funds.
NOTE 4 -- CONTINGENT DEFERRED SALES CHARGE ("CDSC"). Class A shares may charge a
1.00% CDSC if a shareholder purchased $1,000,000 or more and redeemed these
shares within 18 months from the date of purchase. Effective November 15, 2002,
qualified plans investing in Class A shares may pay a 1.00% CDSC if a
shareholder redeemed these shares within 12 months from the date of purchase. A
CDSC is charged by Class B shares on redemptions or exchanges of shares at a
maximum of 5.00% beginning at the time of purchase to 0.00% at the beginning of
the seventh year. A 1.00% CDSC is charged by Class C shares on redemptions or
exchanges held thirteen months or less. Shares acquired through reinvestment of
dividends or other distributions are not charged a CDSC. The CDSC may be reduced
or certain sales charge exceptions may apply. The CDSC is paid by the redeeming
shareholder and therefore it is not an expense of the Fund. For the year ended
May 31, 2003, the Distributor received the following CDSC from Class A, Class B
and Class C shareholders:
FUND CLASS A CLASS B CLASS C
- ------------------------------------------------------------------------------------------
Cash Reserves Fund $ 15,024 $ 4,141 $ 67,864
NOTE 5 -- SUBSEQUENT EVENTS. On June 9, 2003, the Board of Directors for the
INVESCO Cash Reserves Fund and INVESCO Tax-Free Money Fund ("Selling Funds")
unanimously approved an Agreement and Plan of Reorganization ("the Plan")
pursuant to which the Selling Funds, would transfer all of its assets and
liabilities to AIM Money Market Fund and AIM Tax-Exempt Cash Fund, a series of
AIM Investment Securities Funds and AIM Tax-Exempt Funds, respectively. The Plan
is more fully described in a proxy statement to be presented for shareholder
consideration on or around August 25, 2003.
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders of
INVESCO Money Market Funds, Inc.
In our opinion, the accompanying statements of assets and liabilities, including
the statement of investment securities, 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 Cash Reserves Fund, INVESCO
Tax-Free Money Fund and INVESCO U.S. Government Money Fund (constituting INVESCO
Money Market Funds, Inc., hereafter referred to as the "Fund") at May 31, 2003,
the results of each of their operations for the year then ended, the changes in
each of their net assets for each of the two years in the period then ended and
the financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which 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 May 31, 2003 by correspondence with the custodian
and the application of alternative auditing procedures where securities
purchased had not been received, provide a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
Denver, Colorado
June 27, 2003
FINANCIAL HIGHLIGHTS
CASH RESERVES FUND -- INVESTOR CLASS
- --------------------------------------------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
YEAR ENDED MAY 31
- --------------------------------------------------------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE DATA
Net Asset Value -- Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====================================================================================================================
INCOME AND DISTRIBUTIONS FROM
INVESTMENT OPERATIONS
NET INVESTMENT INCOME EARNED AND
DISTRIBUTED TO SHAREHOLDERS 0.01 0.02 0.05 0.05 0.04
====================================================================================================================
Net Asset Value -- End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====================================================================================================================
TOTAL RETURN 0.68% 1.76% 5.34% 4.87% 4.45%
RATIOS
Net Assets -- End of Period ($000 Omitted) $ 570,867 $ 1,121,981 $ 880,489 $ 912,135 $ 814,158
Ratio of Expenses to Average Net Assets(a)(b) 0.86% 0.82% 0.90% 0.91% 0.90%
Ratio of Net Investment Income to Average
Net Assets(b) 0.74% 1.76% 5.14% 4.75% 4.36%
(a) Ratio is based on Total Expenses of the Class, less Expenses Absorbed by Investment Adviser, if applicable,
which is before any expense offset arrangements (which may include custodian fees).
(b) Various expenses of the Class were voluntarily absorbed by IFG for the years ended May 31, 2001, 2000
and 1999. If such expenses had not been voluntarily absorbed, ratio of expenses to average net assets
would have been 0.90%, 0.94% and 0.91%, respectively, and ratio of net investment income to average
net assets would have been 5.14%, 4.72% and 4.35%, respectively.
FINANCIAL HIGHLIGHTS
CASH RESERVES FUND -- CLASS A
- -----------------------------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
PERIOD
ENDED
YEAR ENDED MAY 31 MAY 31
- -----------------------------------------------------------------------------------------------------
2003 2002 2001(a)
PER SHARE DATA
Net Asset Value -- Beginning of Period $ 1.00 $ 1.00 $ 1.00
=====================================================================================================
INCOME AND DISTRIBUTIONS FROM
INVESTMENT OPERATIONS
NET INVESTMENT INCOME EARNED AND
DISTRIBUTED TO SHAREHOLDERS 0.01 0.01 0.02
=====================================================================================================
Net Asset Value -- End of Period $ 1.00 $ 1.00 $ 1.00
=====================================================================================================
TOTAL RETURN 0.51% 1.32% 2.43%(b)
RATIOS
Net Assets -- End of Period ($000 Omitted) $ 8,916 $ 1,564 $ 1
Ratio of Expenses to Average Net Assets(c)(d) 0.96% 1.06% 1.32%(e)
Ratio of Net Investment Income to Average Net
Assets(d) 0.47% 1.40% 5.41%(e)
(a) From August 25, 2000, inception of Class, to May 31, 2001.
(b) Based on operations for the period shown and, accordingly, is not representative of a
full year.
(c) Ratio is based on Total Expenses of the Class, less Expenses Absorbed by Investment Adviser,
if applicable, which is before any expense offset arrangements (which may include custodian
fees).
(d) Various expenses of the Class were voluntarily absorbed by IFG for the year ended May 31, 2002 and
the period ended May 31, 2001. If such expenses had not been voluntarily absorbed, ratio of
expenses to average net assets would have been 1.12% and 1.67%(annualized), respectively, and
ratio of net investment income to average net assets would have been 1.34% and 5.06%
(annualized), respectively.
(e) Annualized
FINANCIAL HIGHLIGHTS
CASH RESERVES FUND -- CLASS B
- -----------------------------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
PERIOD
ENDED
YEAR ENDED MAY 31 MAY 31
- -----------------------------------------------------------------------------------------------------
2003 2002 2001(a)
PER SHARE DATA
Net Asset Value -- Beginning of Period $ 1.00 $ 1.00 $ 1.00
=====================================================================================================
INCOME AND DISTRIBUTIONS FROM
INVESTMENT OPERATIONS
NET INVESTMENT INCOME EARNED AND
DISTRIBUTED TO SHAREHOLDERS(B) 0.00 0.01 0.03
=====================================================================================================
Net Asset Value -- End of Period $ 1.00 $ 1.00 $ 1.00
=====================================================================================================
TOTAL RETURN(c) 0.36% 1.07% 2.96%(d)
RATIOS
Net Assets -- End of Period ($000 Omitted) $ 599 $ 409 $ 63
Ratio of Expenses to Average Net Assets(e)(f) 1.21% 1.52% 1.82%(g)
Ratio of Net Investment Income to Average Net
Assets(f) 0.33% 0.87% 2.99%(g)
(a) From August 25, 2000, inception of Class, to May 31, 2001.
(b) Net Investment Income Earned and Distributed to Shareholders aggregated less than $0.01 on
a per share basis for the year ended May 31, 2003.
(c) The applicable CDSC is not included in the Total Return calculation.
(d) Based on operations for the period shown and, accordingly, is not representative of
a full year.
(e) Ratio is based on Total Expenses of the Class, less Expenses Absorbed by Investment Adviser,
which is before any expense offset arrangements (which may include custodian fees).
(f) Various expenses of the Class were voluntarily absorbed by IFG for the years ended May 31,
2003 and 2002 and the period ended May 31, 2001. If such expenses had not been voluntarily
absorbed, ratio of expenses to average net assets would have been 1.95%, 1.65% and 1.89%
(annualized), respectively, and ratio of net investment income (loss) to average net
assets would have been (0.41%), 0.74% and 2.92% (annualized), respectively.
(g) Annualized
FINANCIAL HIGHLIGHTS
CASH RESERVES FUND -- CLASS C
- -----------------------------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
PERIOD
ENDED
YEAR ENDED MAY 31 MAY 31
- -----------------------------------------------------------------------------------------------------
2003 2002 2001 2000(a)
PER SHARE DATA
Net Asset Value -- Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
=====================================================================================================
INCOME AND DISTRIBUTIONS FROM
INVESTMENT OPERATIONS
NET INVESTMENT INCOME EARNED
AND DISTRIBUTED TO SHAREHOLDERS(B) 0.00 0.01 0.04 0.01
=====================================================================================================
Net Asset Value -- End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
=====================================================================================================
TOTAL RETURN(c) 0.29% 0.96% 4.43% 1.36%(d)
RATIOS
Net Assets -- End of Period ($000 Omitted) $ 17,402 $ 52,233 $ 14,774 $ 4,186
Ratio of Expenses to Average Net
Assets(e)(f) 1.27% 1.44% 1.64% 1.54%(g)
Ratio of Net Investment Income to Average
Net Assets(f) 0.33% 1.03% 4.07% 4.73%(g)
(a) From February 15, 2000, inception of Class, to May 31, 2000.
(b) Net Investment Income Earned and Distributed to Shareholders aggregated less than $0.01 on
a per share basis for the year ended May 31, 2003.
(c) The applicable CDSC is not included in the Total Return calculation.
(d) Based on operations for the period shown and, accordingly, is not representative of a
full year.
(e) Ratio is based on Total Expenses of the Class, less Expenses Absorbed by Investment Adviser,
if applicable, which is before any expense offset arrangements (which may include custodian
fees).
(f) Various expenses of the Class were voluntarily absorbed by IFG for the years ended May 31,
2003 and 2002. If such expenses had not been absorbed, ratio of expenses to average net assets
would have been 2.05% and 1.77%, respectively, and ratio of net investment income (loss) to
average net assets would have been (0.45%) and 0.70%, respectively.
(g) Annualized
FINANCIAL HIGHLIGHTS
TAX-FREE MONEY FUND -- INVESTOR CLASS
- --------------------------------------------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
YEAR ENDED MAY 31
- --------------------------------------------------------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE DATA
Net Asset Value -- Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====================================================================================================================
INCOME AND DISTRIBUTIONS FROM
INVESTMENT OPERATIONS
NET INVESTMENT INCOME EARNED AND
DISTRIBUTED TO SHAREHOLDERS 0.01 0.01 0.03 0.03 0.03
====================================================================================================================
Net Asset Value -- End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====================================================================================================================
TOTAL RETURN 0.57% 1.22% 3.22% 2.86% 2.63%
RATIOS
Net Assets -- End of Period ($000 Omitted) $ 26,643 $ 32,138 $ 36,055 $ 40,396 $ 50,697
Ratio of Expenses to Average Net Assets(a)(b) 0.85% 0.85% 0.86% 0.87% 0.77%
Ratio of Net Investment Income to Average
Net Assets(b) 0.57% 1.21% 3.16% 2.82% 2.61%
(a) Ratio is based on Total Expenses of the Class, less Expenses Absorbed by Investment Adviser, which is
before any expense offset arrangements (which may include custodian fees).
(b) Various expenses of the Fund were voluntarily absorbed by IFG for the years ended May 31, 2003, 2002,
2001, 2000 and 1999. If such expenses had not been voluntarily absorbed, ratio of expenses to
average net assets would have been 1.14%, 1.14%, 1.17%, 1.11% and 1.02%, respectively, and ratio of
net investment income to average net assets would have been 0.28%, 0.92%, 2.85%, 2.58% and 2.36%,
respectively.
FINANCIAL HIGHLIGHTS
U.S. GOVERNMENT MONEY FUND -- INVESTOR CLASS
- --------------------------------------------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
YEAR ENDED MAY 31
- --------------------------------------------------------------------------------------------------------------------
2003 2002 2001 2000 1999
PER SHARE DATA
Net Asset Value -- Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====================================================================================================================
INCOME AND DISTRIBUTIONS FROM
INVESTMENT OPERATIONS
NET INVESTMENT INCOME EARNED AND
DISTRIBUTED TO SHAREHOLDERS 0.01 0.02 0.05 0.05 0.04
====================================================================================================================
Net Asset Value -- End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====================================================================================================================
TOTAL RETURN 0.72% 1.67% 5.24% 4.74% 4.36%
RATIOS
Net Assets -- End of Period ($000 Omitted) $ 67,097 $ 75,720 $ 75,380 $ 86,060 $ 91,509
Ratio of Expenses to Average Net Assets(a)(b) 0.85% 0.85% 0.86% 0.86% 0.86%
Ratio of Net Investment Income to Average
Net Assets(b) 0.72% 1.65% 5.10% 4.63% 4.28%
(a) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by Investment Adviser, which is
before any expense offset arrangements (which may include custodian fees).
(b) Various expenses of the Fund were voluntarily absorbed by IFG and for the years ended May 31, 2003,
2002, 2001, 2000 and 1999. If such expenses had not been voluntarily absorbed, ratio of expenses
to average net assets would have been 1.11%, 1.04%, 1.18%, 1.16% and 1.08%, respectively, and
ratio of net investment income to average net assets would have been 0.46%, 1.46%, 4.78%, 4.33% and
4.06%, respectively.
OTHER INFORMATION
UNAUDITED
The table below provides information about each of the Independent and
Interested Directors. Their affiliations represent their principal occupations.
NUMBER OF
FUNDS IN
POSITION(S) HELD WITH FUND
COMPANY, TERM OF COMPLEX OTHER
OFFICE AND LENGTH PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS
NAME, ADDRESS AND AGE OF TIME SERVED* DURING PAST FIVE YEARS* DIRECTOR HELD BY DIRECTOR
- ------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT DIRECTORS
Bob A. Baker Vice Chairman of Consultant (2000-present). 48
37 Castle Pines Dr. N. the Board Formerly, President and
Castle Rock, Colorado (Since 2003) Chief Executive Officer
(1988-2000) of AMC Cancer
Age: 66 Research Center, Denver,
Colorado. Until Mid-December
1988, Vice Chairman of the
Board of First Columbia
Financial Corporation,
Englewood, Colorado;
formerly, Chairman of the
Board and Chief Executive
Officer of First Columbia
Financial Corporation.
Sueann Ambron, Ph.D. Director Dean of the Business School, 48
University of Colorado (Since 2003) College of Business,
at Denver University of Colorado of
1250 14th Street Denver (2000-present).
Denver, Colorado Formerly, President and
Chief Executive Officer of
Age: 58 Avulet, Inc., Sunnyvale,
California (1998-1999), Vice
President and General
Manager, Multimedia Services
Division, Motorola, Inc.,
Schoumburg, Illinois
(1996-1998).
Victor L. Andrews, Ph.D. Director Professor Emeritus, Chairman 48
34 Seawatch Drive Emeritus and Chairman and
Savannah, Georgia CFO of the Roundtable of the
Department of Finance of
Age: 72 Georgia State University;
and President, Andrews
Financial Associates, Inc.
(consulting firm). Formerly,
member of the faculties of
the Harvard Business School;
and the Sloan School of
Management of MIT.
Lawrence H. Budner Director Trust Consultant. Formerly, 48
7608 Glen Albens Circle Senior Vice President and
Dallas, Texas Senior Trust Officer of
InterFirst Bank, Dallas,
Age: 72 Texas.
OTHER INFORMATION
UNAUDITED
NUMBER OF
FUNDS IN
POSITION(S) HELD WITH FUND
COMPANY, TERM OF COMPLEX OTHER
OFFICE AND LENGTH PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS
NAME, ADDRESS AND AGE OF TIME SERVED* DURING PAST FIVE YEARS* DIRECTOR HELD BY DIRECTOR
- ------------------------------------------------------------------------------------------------------------------------------------
James T. Bunch Director Co-President and Founder of 48
Green, Manning & Bunch,
3600 Republic Plaza (since 2000) Ltd., Denver, Colorado
370 Seventeenth Street (1988-present); Director and
Denver, Colorado Vice President of Western
Golf Association and Evans
Age: 60 Scholars Foundation; and
Excutive Committee, United
States Golf Association.
Formerly, General Counsel
and Director of Boettcher &
Company, Denver, Colorado;
and formerly, Chairman and
Managing Partner of Davis,
Graham & Stubbs, Denver,
Colorado.
Gerald J. Lewis Director Chairman of Lawsuit 48 Director of General Chemical
701 "B" Street (since 2000) Resolution Services, San Group, Inc., Hampdon, New
Suite 2100 Diego, California Hampshire (1996-present).
San Diego, California (1987-present). Formerly, Director of Wheelabrator
Associate Justice of the Technologies, Inc., Fisher
California Court of Appeals; Scientific, Inc., Henley
Age: 69 and of Counsel, Latham & Manufacturing, Inc., and
Watkins, San Diego, California Coastal Properties,
California (1987-1997). Inc.
John W. McIntyre Director Retired. Trustee of Gables 48
7 Piedmont Center Residential Trust. Trustee
Suite 100 and Chairman of the J.M. Tull
Atlanta, Georgia Charitable Foundation;
Director of Kaiser Foundation
Age: 72 Health Plans of Georgia, Inc.
Formerly, Vice Chairman of
the Board of Directors of The
Citizens and Southern
Corporation and Chairman of
the Board and Chief Executive
Officer of The Citizens and
Southern Georgia Corporation
and The Citizens and Southern
National Bank. Formerly,
Trustee of INVESCO Global
Health Sciences Fund and
Trustee of Employee's
Retirement System of Georgia,
Emory University.
Larry Soll, Ph. D. Director Retired. Formerly, Chairman 48 Director of Synergen since
2358 Sunshine Canyon Dr. (since 1997) of the Board (1987-1994), incorporation in 1982;
Boulder, Colorado Chief Executive Officer Director of Isis
(1982-1989 and 1993-1994) and Pharmaceuticals, Inc.
Age: 60 President (1982-1989) of
Synergen Inc.; and formerly,
Trustee of INVESCO Global
Health Sciences Fund.
OTHER INFORMATION
UNAUDITED
NUMBER OF
FUNDS IN
POSITION(S) HELD WITH FUND
COMPANY, TERM OF COMPLEX OTHER
OFFICE AND LENGTH PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS
NAME, ADDRESS AND AGE OF TIME SERVED* DURING PAST FIVE YEARS* DIRECTOR HELD BY DIRECTOR
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTORS AND OFFICERS
These directors are "interested persons" of IFG as defined in the Act, and they
are interested persons by virtue of the fact that he/she is an officer or
director of IFG, IDI or an affiliate of IFG.
Mark H. Williamson Chairman of the Board President and Chief Executive 48
4350 South Monaco Street (since 1999). Formerly, Officer AIM Investment
Denver, Colorado President (1998-2002); Management and Chief
and Chief Executive Executive Officer of the AIM
Age: 51 Officer (1998-2002). Division of AMVESCAP PLC
(2003-present). Formerly,
Chief Executive Officer,
Managed Products Division,
AMVESCAP PLC (2001-present).
Formerly, Chairman of the
Board (1998-2002), President
(1998-2002), and Chief
Executive Officer (1998-2002)
of INVESCO Funds Group, Inc.
and of INVESCO Distributors,
Inc. Formerly, Chief
Operating Officer and
Chairman of the Board of
INVESCO Global Health
Sciences Fund; formerly,
Chairman and Chief Executive
Officer of NationsBanc
Advisors, Inc.; and formerly,
Chairman of NationsBanc
Investments, Inc.
Raymond R. Cunningham President (2003-present), President (2003-present) and 48 Director of INVESCO Funds
4350 South Monaco Street Chief Executive Officer Chief Executive Officer Group, Inc. and Chairman of
Denver, Colorado (2003-present) and (2003-present) of INVESCO the Board of INVESCO
Director (2001-present). Funds Group, Inc.; Distributors, Inc.
Age: 52 Formerly, Vice President Chairman of the Board (2003-
(2001-2002). present), President
(2003-present), and Chief
Executive Officer
(2003-present) of INVESCO
Distributors, Inc. Formerly,
Chief Operating Officer
(2002-2003) and Senior Vice
President (1999-2002) of
INVESCO Funds Group, Inc. and
INVESCO Distributors, Inc.;
and Formerly, Senior Vice
President of GT Global -
North America (1992-1998).
Richard W. Healey Director Senior Vice President of 40 Director of INVESCO Funds
4350 South Monaco Street (since 2000) INVESCO Funds Group, Inc.; Group, Inc. and INVESCO
Denver, Colorado Senior Vice President of Distributors, Inc.
INVESCO Distributors, Inc.
Age: 48 Formerly, Senior Vice
President of GT Global -
North America (1996-1998) and
The Boston Company
(1993-1996).
OTHER INFORMATION
UNAUDITED
NUMBER OF
FUNDS IN
POSITION(S) HELD WITH FUND
COMPANY, TERM OF COMPLEX OTHER
OFFICE AND LENGTH PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS
NAME, ADDRESS AND AGE OF TIME SERVED* DURING PAST FIVE YEARS* DIRECTOR HELD BY DIRECTOR
- ------------------------------------------------------------------------------------------------------------------------------------
Glen A. Payne Secretary Senior Vice President,
4350 South Monaco Street General Counsel and Secretary
Denver, Colorado of INVESCO Funds Group, Inc.;
Senior Vice President,
Age: 55 Secretary and General Counsel
of INVESCO Distributors, Inc.
Formerly, Secretary of
INVESCO Global Health
Sciences Fund; General
Counsel of INVESCO Trust
Company (1989-1998); and
employee of a U.S. regulatory
agency, Washington, D.C.
(1973-1989).
Ronald L. Grooms Chief Accounting Senior Vice President and Director of INVESCO Funds
4350 South Monaco Street Officer, Chief Treasurer of INVESCO Funds Group, Inc. and INVESCO
Denver, Colorado Financial Officer Group, Inc.; and Senior Vice Distributors, Inc.
and Treasurer President and Treasurer of
Age: 56 INVESCO Distributors, Inc.
Formerly, Treasurer and
Principal Financial and
Accounting Officer of INVESCO
Global Health Sciences Fund;
and Senior Vice President and
Treasurer of INVESCO Trust
Company (1988-1998).
William J. Galvin, Jr. Assistant Secretary Senior Vice President and Director of INVESCO Funds
4350 South Monaco Street Assistant Secretary of Group, Inc. and INVESCO
Denver, Colorado INVESCO Funds Group, Inc.; Distributors, Inc.
and Senior Vice President and
Age: 46 Assistant Secretary of
INVESCO Distributors, Inc.
Formerly, Trust Officer of
INVESCO Trust Company
(1995-1998).
Pamela J. Piro Assistant Treasurer Vice President and Assistant
4350 South Monaco Street Treasurer of INVESCO Funds
Denver, Colorado Group, Inc.; and Assistant
Treasurer of INVESCO
Age: 42 Distributors, Inc. Formerly,
Assistant Vice President
(1996-1997).
Tane T. Tyler Assistant Secretary Vice President and Assistant
4350 South Monaco Street (since 2002) General Counsel of INVESCO
Denver, Colorado Funds Group, Inc.
Age: 37
* Except as otherwise indicated, each individual has held the position(s) shown for at least the last five years.
The Statement of Additional Information ("SAI") includes additional information about Fund directors and is available, without
charge, upon request. To obtain a free copy of the current SAI, call 1-800-525-8085.
[INVESCO ICON] INVESCO(R)
1-800-525-8085
Personal Account Line: 1-800-424-8085
Advisor Services: 1-800-959-4246
invescofunds.com
INVESCO Distributors, Inc.,(SM) Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
Effective 7/1/03, A I M Distributors, Inc. became the distributor of the retail
INVESCO funds
11 Greenway Plaza, Suite 100 Houston, Texas 77046
This information must be preceded or accompanied by a current prospectus.
AMF 900472 7/03
ITEM 2. CODE OF ETHICS
INVESCO FUNDS GROUP, INC. & INVESCO DISTRIBUTORS, INC.
CODE OF ETHICS AND BUSINESS POLICIES
REVISED JULY 2002
INTRODUCTION
------------
INVESCO's code of ethics and business policies adhere strictly to sound
investment principles and practices and to the highest of ethical standards. Our
policies are intended to ensure full conformity to the rules and regulations of
our regulatory organizations.
The responsibility for following the policies and procedures rests with you, the
employee. While INVESCO has a variety of procedures to oversee compliance, a
conscientious, professional, and ethical attitude on your part will ensure that
we fulfill the rules, regulations and business customs of our industry.
Every attempt has been made to cover all requirements, however, your good
judgment is required for the success of INVESCO's compliance program. You should
be familiar with the procedures and policies in this manual.
Occasionally, questions may arise which cannot be answered through this manual.
In this instance, questions should be directed to the Legal & Compliance
department.
Disciplinary sanctions such as suspension, with or without pay, or termination
of employment may be imposed against any person who fails to adhere to the
policies and procedures set forth in this manual.
On an annual basis, each INVESCO officer, director, and employee will be
required to provide a written certification that he or she has read and
understands the policies in the manual, recognizing that he or she is subject to
the policies. In addition, on an annual basis each INVESCO officer, director,
and employee will be required to certify in writing the disclosure of all
personal securities transactions and reportable accounts.
Questions regarding the contents of this manual should be directed to:
Stephanie Barres, Director Broker Dealer Compliance, ext. 6475
Jim Lummanick, Chief Compliance Officer, ext. 6526
CODE OF ETHICS
--------------
As members of an organization serving the public, all employees are guided in
their actions by the highest ethical and professional standards.
1. The general conduct of all employees must at all times reflect the
professional nature of the business we are in. INVESCO employees are
judicious, accurate, objective and reasonable in dealing with both clients
and other parties. The personal integrity of all employees must be beyond
the slightest shadow of a doubt.
2. All INVESCO personnel must act within the spirit and the letter of all
federal, state, and local laws and regulations pertaining to the securities
business.
3. At all times, the interest of the client has precedence over any personal
interest.
4. All officers, directors and employees shall obtain prior written approval
before placing a securities transaction (as listed in the following INVESCO
policies).
5. INVESCO personnel will not accept compensation of any sort for services,
from any outside source without the permission of the CEO or their
representative.
6. When personal interests conflict with the interests of INVESCO and its
clients, the employee will report the conflict to the Legal & Compliance
department for resolution.
7. Recommendations and actions of INVESCO are confidential and private matters
between INVESCO and its clients. It is INVESCO's policy to prohibit, prior
to general public release, the transmission, distribution or communication
of any information regarding securities transaction of client accounts
except to broker/dealers in the ordinary course of business.
8. No information obtained during the course of employment regarding
particular securities (including reports and recommendations of INVESCO)
may be transmitted, distributed, or communicated to anyone who is not
affiliated with INVESCO. In addition, an employee in possession of this
information may not use this information for their own personal gain.
9. The policies and guidelines set forth in this Code of Ethics must be
strictly adhered to by all INVESCO employees. Severe disciplinary actions,
including dismissal, may be imposed for violations of this Code, including
the guidelines that follow.
FIDUCIARY CONDUCT
-----------------
The following principles will assist us as INVESCO and AMVESCAP employees in
governing our conduct as fiduciaries:
1. AMVESCAP seeks to maintain the same high fiduciary standards throughout the
world, even though those standards may not be legally required, or even
recognized, in some countries.
2. Clients must be provided with timely and accurate information regarding
their accounts.
3. Processes have been established for the proper maintenance, control and
protection of client assets. Fiduciary assets must be segregated from
AMVESCAP assets and property.
4. Fiduciary duties are delegated only when the client consents, and where
permitted by applicable law. Reasonable care, skill and caution must be
exercised in selection of agents and the review of their performance.
5. INVESCO and AMVESCAP are each responsible for making investment decisions
on behalf of clients which conform to the prospectus, contract , or other
controlling document.
6. INVESCO and all employees should seek open and responsive relationships
with the various industry regulators.
GUIDELINES FOR AVOIDING PROHIBITED ACTS
---------------------------------------
INVESCO employees are prohibited from the following ("Prohibited Acts"):
1. Soliciting or recommending purchases, sales or reinvestment in securities
not in accordance with the client's investment objectives and guidelines.
2. Attempting to use their influence to cause any client account to purchase,
sell or retain any securities for the purpose of seeking any form of
personal gain.
3. Warranting the value or price of any security or guaranteeing its future
performance.
4. Promising or representing that an issuer of securities will meet its
obligations or will fulfill its investment or business objectives in the
future.
5. Agreeing to protect a client against loss by repurchasing a security at
some future time.
6. Owning or taking title to any funds or assets of a client.
7. Maintaining a joint brokerage or bank account with any client; sharing any
benefit, profit or loss resulting from securities transactions with any
client; or entering into any business transaction with any client.
8. Borrowing money or securities from any client, regardless of the
relationship between the client and INVESCO representative.
9. Owning, operating, managing or otherwise engaging in or being employed by
any outside business activity on either a full-time or part-time basis
without the prior written approval of the President or CEO or their
representative.
10. Violating or failing to abide by INVESCO's policy designed to detect and
prevent insider trading, and INVESCO policy regarding buying and selling
AMVESCAP shares or ADRs.
11. Entering orders in any account for which there is no client. Any employee
who becomes aware of any conduct which might violate the Prohibited Acts
listed above, any laws or regulations, or improper or unauthorized actions,
should report such conduct to their supervisor. Any questions about the
conduct required by INVESCO should be directed to the Legal & Compliance
department.
NEED-TO-KNOW POLICY
-------------------
THIS POLICY IS TO BE READ IN CONJUNCTION WITH THE INVESCO PERSONAL SECURITIES
TRADING POLICIES.
In conjunction with the policies regarding insider trading and material
information, INVESCO maintains a Need-to-Know Policy. This policy has been
adopted to prevent even the appearance of impropriety.
As INVESCO diversifies its products and services, we must be aware that
potential conflicts may arise. For instance, in the normal course of business
with a retirement plan, INVESCO may receive confidential information about the
plan's company (such as imminent lay-offs, poor earnings, etc.) that may be
material to a portfolio manager holding the stock and trying to determine to buy
or sell the securities.
In consideration of our professional responsibilities, and under law, INVESCO
must not use nonpublic information improperly to benefit INVESCO, a client, or
an individual. INVESCO personnel should always make every effort to avoid even
the appearance of misusing nonpublic information.
In light of this, INVESCO employees who have nonpublic information must not
disclose it to anyone who does not have a "need to know." This policy, also know
as a "Fire Wall," is designed to keep the information confidential. While there
may be times in which trading or other activities must be restricted, reliance
on a successful operating Fire Wall allows INVESCO to minimize such
restrictions. The Fire Wall permits INVESCO personnel in non-affected areas to
continue to engage in activities involving a particular company's securities.
Under the Fire Wall policy, those on the "informed" side of the wall have a
special duty to ensure that appropriate standards or confidentiality are
maintained. For those on the "uninformed" side of the wall, a corresponding duty
exists. All INVESCO personnel are prohibited from making any effort to obtain
nonpublic information that may be in the possession of other parts of the
organization. Again, INVESCO employees who have nonpublic information must not
disclose it to anyone who does not have a need to know.
When material information is communicated, whether to other personnel or to
those outside the organization, the second person is then "brought over the
wall" and is then prohibited from effecting transactions in the concerned
company securities until the information is made public. Therefore, extreme care
should be taken to ensure that they are not put in a position of nonpublic
information about other transactions that might prejudice or inhibit the
appropriate performance of their other functions in their normal area of
operation.
Any questions as to whether a piece of information is material or should not be
communicated should be directed to the Legal & Compliance department of INVESCO.
ANTI-MONEY LAUNDERING
---------------------
The attempted use of financial institutions and instruments to launder money is
a significant problem that has resulted in the passage of strict laws in many
countries. Money laundering attempts to disguise money derived from illegal
activity including drug trafficking, terrorism, organized crime, fraud, and many
other crimes. Money launderers go to great lengths to hide the sources of their
funds. Among the most common stratagems are placing cash in legitimate financial
institutions (such as mutual funds), layering between numerous financial
institutions, and integrating the laundered proceeds back into the economy as
apparently legitimate funds.
INVESCO maintains strict policies regarding this matter. Such policies are
outlined in the Supervisory Procedures Manual and should be reviewed for
compliance with such procedures. The manual may be obtained through the Legal &
Compliance Department.
AML Policy
----------
ANTI-TRUST
----------
The laws of many countries are designed to protect consumers from illegal
competitive actions such as price fixing and dividing markets. It is AMVESCAP's
policy and practice to compete based on the merits of our products and services.
We do not fix or control prices with competitors, divide up territories or
markets, limit the production or sale of products, boycott certain suppliers or
customers, unfairly control or restrict trade in any way, restrict a
competitor's marketing practices, or disparage a competitor. We should never
discuss products, pricing or markets with competitors with the intent to fix
prices or divide markets.
INTERNATIONAL TRADE CONTROLS
----------------------------
From time to time, various countries may impose restrictions upon the ability of
businesses in their jurisdiction to engage in commerce with designated
individuals, countries or companies. These laws are commonly referred to as
boycotts or trade embargoes.
Similarly, many countries contribute the names of criminal or terrorist
organizations or individuals to a common database and require financial
institutions to screen customer lists against the database as part of their
"Know Your Customer" obligations. We must be aware of and, where appropriate,
adhere to any such restrictions.
GIFTS AND GRATUITIES
--------------------
This policy is in compliance with the National Association of Securities Dealers
Regulation, Inc. (NASDR) Conduct Rule 3060 (a), which states:
No officer, director, or employee of INVESCO shall directly or indirectly accept
in any one-year gifts, gratuities or favors in excess of $100 per individual per
year from any one broker/dealer without the prior written approval of the Legal
& Compliance Department.
In connection with the retail sale or distribution of shares of the INVESCO
Funds products (retail, variable, etc.), no officer director, or employee
covered by this policy may offer or pay to any broker/dealer anything of
material value over $50, and no broker/dealer may solicit or accept anything of
material value (over $50). See NASDR Conduct Rules 2820 & 2830.
Gifts or gratuities of any amount to any fiduciary of an existing or prospective
ERISA account, or any associated person thereof, should be pre-approved in
writing by the Legal & Compliance Department. The U.S. Department of Labor (DOL)
has specific regulations regarding this issue which may necessitate a review for
individual clients.
Lavish or frequent entertainment may be considered a gift.
NASDR Rules require that the receipt of a gift or the giving of a gift must be
documented. Recordkeeping for gifts received is maintained in the Legal &
Compliance Department. Recordkeeping for National and Institutional Sales is
maintained by the administrative group of that area and is to be available to
regulators or Compliance upon request.
To report a gift, complete the GIFT REPORTING FORM and forward to Stephanie
Barres, Mail Stop 50-101.
ACTIVITIES OUTSIDE OF INVESCO
-----------------------------
If you wish to accept a position with a corporation (public or private),
charitable organization, foundation or similar group, you should seek prior
approval. Submit a memorandum, detailing the proposed activity to your
supervisor, the President or Chief Executive Officer and to the General Counsel.
Please use the OUTSIDE ACTIVITIES FORM to report your proposed employment.
The memorandum should state the compensation or benefits, direct or indirect,
that you will receive from your participation and the nature of the time
commitment involved. These types of requests will be treated on a case-by-case
basis with the interests of INVESCO and its clients being paramount.
PARTICIPATING IN A BOARD OF DIRECTORS
-------------------------------------
Employees may be asked to serve on the Board of Directors of another company,
whether for profit or not-for-profit, charitable foundations, etc. Approval for
such a position must be obtained.
If authorization to serve on the board of directors of a company is granted, the
INVESCO officer, director or employee serving as a director shall refrain from
any direct or indirect involvement in the consideration for purchase or sale and
in the purchase or sale by any INVESCO client. For example, securities of the
company of which the INVESCO officer, director or employee serves as a director,
or any securities of an affiliate of such company, should not be purchased for
INVESCO clients.
As an outside board member or officer, an employee may come into possession of
material non-public information about the outside company, or other public
companies. It is critical that a proper information barrier be in place between
AMVESCAP business units and the outside organization, and that the employee does
not communicate such information to other AMVESCAP employees or business units
in violation of any such information barrier.
GUIDELINES
----------
There is no absolute prohibition on an INVESCO employee participating in outside
activities. As a practical matter, however, there may be circumstances in which
it would not be in INVESCO's best interest to allow employees to participate in
outside activities. The first consideration must be whether the activity will
take so much of the employee's time that it will affect his or her performance.
As important, however, is whether the activity will subject the employee to
conflicts of interest that will reflect poorly on both him or her and INVESCO.
Our business is such that we must adhere strictly to the highest ethical
standards and strive to avoid even the appearance of impropriety and conflict.
It is impossible to anticipate every conflict that may arise, but activities
should be limited to those that have the least probability of creating them. For
example, serving on the board of a publicly traded company has clear potential
for conflict, while serving on the board of a charitable organization generally
does not normally pose a conflict.
Another consideration is that under the law, INVESCO and its employees must not
use non-public material information improperly to benefit themselves or
INVESCO's clients. It is conceivable, for example, that as an advisory board
member, you may receive material non-public information about certain public
companies. If this occurs, you would be prohibited from effecting transactions
(either for your account or client accounts) until the information either is
made available to the public or ceases to be material. You would also be
required to keep the information confidential and, pursuant to our Code of
Ethics and Insider Trading Policies, avoid using the information to effect
trades.
Additionally, even if you are positive that you do not have any "insider
information," unforeseen market events may make it look as if you did -- e.g.,
you sell securities of a company that subsequently reports an adverse event
(e.g., loss of a major customer, departure of key employees, etc.). It is
virtually impossible to prove a negative -- that you didn't know about the event
- -- and it may make it difficult to win any lawsuit that is brought or to
mitigate any resulting adverse publicity.
BUSINESS CARD POLICY
--------------------
It is the policy of INVESCO, that the business cards of the officers and
employees of INVESCO be accurate, clear, and not misleading to the recipient.
The SEC and NASDR categorize business cards as advertising material, and thus
apply all general marketing rules to business cards. Accordingly, when
developing and disseminating business cards, certain guidelines should be
followed. Also, as with all advertising and marketing materials, approval should
be obtained from the Legal & Compliance department.
Standard INVESCO business cards prepared by the Marketing Communications group
meet all the necessary requirements. INVESCO Funds employees should only use
business cards ordered from the Communications group.
All business cards and stationary must list the appropriate Office of
Supervisory Jurisdiction (OSJ) as registered with the NASD.
ANTI-BRIBERY AND DEALINGS WITH GOVERNMENT OFFICIALS
---------------------------------------------------
Many of the countries in which AMVESCAP conducts its business prohibit the
improper influencing of governmental officials by the payment of bribes, gifts,
political contributions, lavish hospitality or by other means. Our policy
requires adherence to those restrictions.
In general, all travel and entertainment we provide to governmental officials
must be pre-approved within the appropriate AMVESCAP business unit. If approved,
a written confirmation that such expenses do not violate local law must be
obtained from an appropriate third party (e.g., the business unit's legal
counsel or the government official's supervisor).
Gifts, other than those of nominal value, may not be given to or accepted from
such officials. These prohibitions extend to any consultants or agents we may
retain on behalf of AMVESCAP.
EMPLOYEE POLITICAL AND CHARITABLE CONTRIBUTIONS
-----------------------------------------------
INVESCO realizes, as active members of the community and involved citizens, its
employees often participate in political and charitable projects and activities
that may include donations and contributions by employees to political
candidates or charitable organizations.
Although INVESCO encourages civic and community involvement by its employees,
INVESCO desires to avoid any situation that raises a conflict of interest or
that creates an appearance of impropriety in the context of INVESCO's business
relationships. Specifically, this policy prohibits employees from making
political or charitable contributions when the solicitation or request for such
contributions implies that continued or future business with INVESCO depends on
making such a contribution. Similarly, no contribution should be made that
creates the appearance that INVESCO stands to benefit from a business
relationship because of an employee's contribution.
We may not, under any circumstances, use Company funds to make political
contributions without prior approval, nor may we represent our personal
political views as being those of the Company.
CAMPAIGN CONTRIBUTIONS
----------------------
Both federal and state campaign finance laws include limits on political
contributions that employees may make. Under federal law, the maximum amount an
individual may contribute to a political candidate is $1,000 per election. The
limits imposed by state law vary.
All contributions made by employees must be entirely voluntary and should only
be in an amount that is determined by the employee. Additionally, the
contribution should be unlikely to influence the candidate's judgment regarding
any continued or future business with INVESCO. No contributions should be made
that create the appearance of any of the conflicts discussed. In no case may any
contribution exceed the applicable federal or state limitations.
If an employee is unsure if a particular political contribution would be in
compliance with this policy, they should consult the Legal & Compliance
department.
CONTRACT RECORDKEEPING & REVIEW
-------------------------------
INVESCO requires that all contractual relationships entered into with
unaffiliated entities be in writing, reviewed and approved by the Legal and
Compliance Department, and fully executed by all parties. In addition, INVESCO
monitors all current contracts for amendment to reflect changed circumstances,
tracks the expiration date for timely renewal if necessary, superceding events,
and other activities that could affect the contractual relationship.
INVESCO's Legal and Compliance Department has instituted procedures to ensure
that these minimum requirements are fully met. All contracts should be submitted
to the Legal & Compliance Department for review prior to signing the contract.
All signed original agreements entered into on behalf of INVESCO should be sent
to the Legal & Compliance department for inclusion in the contract database and
for disaster recovery purposes.
Only officers (Assistant Vice President, Vice President, and Senior Vice
President) of INVESCO Funds Group, Inc., and of INVESCO Distributors, Inc., may
sign contracts on behalf of INVESCO. Contact your department head to determine
the appropriate officer to sign a contract.
PERFORMANCE DATA SOURCE
-----------------------
Mutual fund performance calculations provide a way to measure whether a mutual
fund's investments are providing a profit to its shareholders. Performance
measurement also offers a common basis for investors to compare one mutual fund
against another mutual fund. To provide information that accurately reflects the
financial status of a fund, the SEC and other industry organizations and
accounting authorities specify various methods of computing mutual fund
"performance." These methods include "total return" and "average annual return,"
among others.
In addition, the SEC and the NASD specify very strictly not only the performance
calculation methods, but the way in which those calculations must be presented
in prospectuses, advertising and sales literature, and indeed, in every
communication of mutual fund "performance" to the public.
The SEC and other regulators impose penalties for violation of the various
regulations relating to calculation and use of performance numbers. To ensure
total compliance, INVESCO must strictly control the source and use of its mutual
funds' performance statistics. The Financial Reports area of the INVESCO
Portfolio Accounting Department is the sole source of INVESCO Mutual Fund
performance calculations. Reference may be made to invescofunds.com website
total return performance displays, as the Financial Reports department reviews
this information on a daily and monthly basis.
ONLY FINANCIAL REPORTS' PERFORMANCE CALCULATIONS MAY BE USED OR REFERENCED BY
ANY EMPLOYEE, CLIENT REPRESENTATIVE, OR OTHER PERSON IN ANY CAPACITY PURPORTING
TO SPEAK ON BEHALF OF THE INVESCO MUTUAL FUNDS.
COMPLAINTS
----------
The complaint process is governed by both the SEC and NASD. If a complaint is
received in an official letter from the SEC, NASD, State or other regulatory
organization, immediately send all original paperwork to Director of Broker
Dealer Compliance in Legal & Compliance Department.
Complaints from shareholders are addressed through the Transfer Agency as
outlined in INVESCO's Supervisory Procedures Manual.
Complaints regarding non-shareholder matters (for example, complaints regarding
separately-managed accounts) are generally resolved by the Investment Division
and/or Institutional Sales. The Legal & Compliance Department should be advised
of the existence of such complaints and the ultimate resolution.
Employee's should ensure that all complaints are addressed in a timely fashion.
Contact Legal and Compliance with questions regarding such items.
COMMUNICATIONS WITH REGULATORS
------------------------------
It is the policy of INVESCO to cooperate fully with regulatory agencies. Most
inquiries from regulators are of a routine nature. At the same time, however,
even a casual inquiry from a regulatory agency may develop into a non-routine
matter. This most often occurs due to misunderstandings over the information
that the regulator is seeking, or statements made by people without a full
knowledge of the facts. Moreover, even routine regulatory requests often involve
interview with employees and production of records, which can be time-consuming.
Finally, there have been instances in which persons have attempted to obtain
confidential information by impersonating regulators. While such
misrepresentation is blatantly illegal, it has occurred.
Our principal regulators - the Securities and Exchange Commission (SEC) and the
National Association of Securities Dealers, Inc. (NASD) - are aware of the
issues that their requests can raise. For that reason, the SEC, NASD and other
regulators generally initiate their contacts with INVESCO through the Legal and
Compliance Department. That way, the Legal and Compliance Department can
ascertain quickly the scope of the inquiry and arrange to provide any
information sought in a manner that is most efficient for the regulator and
least disruptive to our business operations.
For these reasons, any contact by a regulatory agency must be referred
immediately to the Chief Compliance Officer, Assistant General Counsel or
General Counsel. If the initial contact is made by telephone, simply and
politely advise the caller that it is INVESCO's policy to direct any regulatory
inquiry to the Legal and Compliance Department, and then transfer the call.
PENDING OR THREATENED LITIGATION
--------------------------------
INVESCO continuously strives to meet and exceed the highest standards in the
conduct of its own business, and expects no less of the companies and personnel
with which it has legal, commercial and investment relationships. However, the
possibility always exists that INVESCO may become involved in litigation, either
in its own respect or as a result of its advisory or other status with respect
to the INVESCO Mutual Funds and its other investment accounts.
In virtually all instances, INVESCO receives formal notice of litigation by what
is called "service of process." This is often done by hand delivery of the legal
complaint and accompanying documents to the INVESCO offices, and, occasionally,
by mail. When process is presented for service upon INVESCO Funds Group, INVESCO
Distributors, Inc., the INVESCO Mutual Funds or other INVESCO affiliated entity,
the INVESCO public receptionist is directed to call the INVESCO Legal &
Compliance Department, which shall notify and direct an appropriate Company
officer to accept such service on behalf of INVESCO. The INVESCO public
receptionist and INVESCO mailroom are directed to forward to the INVESCO Legal &
Compliance Department all litigation materials received via hand delivery, U.S.
Postal Service, or any other delivery service.
INVESCO's General Counsel is responsible for all matters involving litigation
initiated by or filed against INVESCO, although the General Counsel may delegate
to selected Legal and Compliance Department staff such matters as the General
Counsel deems appropriate and necessary. The General Counsel (or designee) shall
coordinate with INVESCO's Company Affairs (Public Relations) department
preparation and release of all litigation-related communications directed to the
public. INVESCO's General Counsel reports on all pending, threatened or existing
litigation to the executive management of INVESCO on a periodic basis, and as
events develop, and shall proceed in litigation matters as the executive
management of INVESCO may direct.
Corporate Information Systems Security Policy
---------------------------------------------
This policy is an addendum to the IFG and IDI Code of Ethics and Business
Policies Manual. All employees are responsible for the compliance with the
Corporate Information Systems Security Policy.
Questions regarding this policy should be addressed with each employees
department manager and then with their department's IT liaison.
INVESCO PERSONAL SECURITIES TRADING POLICIES
(Substantially identical to the policies applicable to
all AMVESCAP entities Globally)
I. CORE PRINCIPLES (ALL EMPLOYEES)
A. Employees have a duty to serve the best interests of clients and not
to engage in conduct that is in conflict with such interests.
B. Employees are prohibited from misusing "inside information".
C. Employees are permitted to acquire shares of AMVESCAP PLC ("AMVESCAP")
through authorized share purchase schemes (including the AMVESCAP
International Sharesave Plan) and otherwise in a manner consistent
with applicable law.
D. Employees are encouraged to invest in mutual funds, unit trusts and
other collective investment vehicles sponsored by subsidiaries of
AMVESCAP.
E. Subject to certain exceptions set forth in these Policies employees
are permitted to invest in other securities if they observe applicable
laws and regulations and both the letter and spirit of these Policies.
II. PROHIBITION AGAINST INSIDER TRADING (ALL EMPLOYEES)
A. TERMS AND DEFINITIONS - As used in this Section II, certain key terms
have the following meanings:
1. "INSIDER" - The concept of "Insider" is broad, and includes at a
minimum all directors, officers and employees of a company.
Directors, officers and employees of AMVESCAP and its subsidiary
companies are deemed to be Insiders of AMVESCAP. In addition, any
person may be a temporary Insider if he/she enters into a
special, confidential relationship with a company in the conduct
of its affairs and, as a result, has access to non-public
information developed for the company's purposes. Thus, any
person associated with AMVESCAP or any of its subsidiaries may
become a temporary Insider of a company which is advised by a
subsidiary or for which a subsidiary performs other services.
Temporary Insiders of a company may also include, for example,
its attorneys, accountants, consultants and other agents, or
employees of its bank lenders and major customers.
2. "INSIDER TRADING" - While the law concerning "Insider Trading" is
not static, it generally includes: (1) trading by an Insider
while in possession of Material or Market/Price Sensitive
Non-Public Information; (2) trading by non-insiders while in
possession of Material or Market/Price Sensitive Non-Public
Information either improperly obtained by the non-insider or
disclosed to the non-insider by an Insider in violation of the
Insider's duty to keep it confidential; and (3) communicating
Material or Market/Price Sensitive Non-Public Information to
others.
3. "MATERIAL INFORMATION" (U.S. terminology) and "Market or Price
Sensitive Information" (U.K. terminology) - These terms generally
include (1) any information that a reasonable investor would
likely consider to be important to making an investment decision;
and (2) any information that is reasonably certain to have a
substantial effect on the price of a company's securities.
Examples of Material or Market/Price Sensitive Information
include (but are not limited to) changes in dividends or dividend
policy, earnings estimates or changes in previously released
earnings estimates, developments concerning significant merger or
acquisition proposals, developments in major litigation, and
significant changes in management.
4. "NON-PUBLIC INFORMATION" - Information is "non-public" until it
has been effectively communicated to the market and the market
has had time to "absorb" the information. For example,
information found in a report filed with the Securities and
Exchange Commission, or appearing in Dow Jones, Reuters Economic
Services, The Wall Street Journal or other publications of
general circulation would be considered public.
B. GENERAL PROHIBITION - All Directors, officers and employees (including
contract employees and part-time personnel) of AMVESCAP, its
subsidiaries and affiliated companies worldwide, are prohibited from
engaging in Insider Trading. This prohibition applies to both personal
and client accounts.
C. REPORTING OBLIGATION - Any Director, officer or employee (including
any contract or part-time employee) who possesses or believes that
he/she may possess Material or Market/Price Sensitive Non-Public
Information about any issuer of securities must report the matter
immediately to the Legal & Compliance department, which will review
the matter and provide further instructions as to the appropriate
handling of the information.
III. POLICIES AND PROCEDURES GOVERNING PERSONAL SECURITIES
TRANSACTIONS GENERALLY
A. COVERED PERSONS - The policies and procedures set forth in this
Section III apply to Directors, officers and employees of AMVESCAP,
its subsidiaries and affiliated companies ("AMVESCAP Companies") who
are deemed to be "Covered Persons" as defined herein. The term
"Covered Persons" includes all such Directors, officers and employees
except those who have been determined to be "Exempt Persons" by the
relevant management committee of an operating division of AMVESCAP or
its designee ("Relevant Management Committee").
B. EXEMPT PERSONS - An "Exempt Person" must meet all of the following
criteria:
1. Work in a position which is unrelated to any AMVESCAP
Company's investment management, investment policy or
investment strategy activities and who has no day-to-day
access to information on current investment strategy,
portfolio holdings and portfolio transactions;
2. Demonstrate lack of day-to-day access to such information by
factors such as physical separation (e.g. employment in a
facility physically separated from the locations where
investment-related activities occur) and lack of access to
computer systems that would provide access to portfolio
information;
3. Annually sign a statement to the effect that such person has
no actual access to such information, and that if he/she
comes into contact with such information he/she will
promptly notify the Legal & Compliance department who will
determine, based on a review of the employee's
circumstances, whether he/she may continue to be designated
as an "Exempt Person".
NOTE: Each exempt person's status will be reviewed
periodically by the Legal & Compliance Department. If any
one of the above requirements is not met, the employee will
immediately be considered to be a covered person.
C. GENERAL POLICY
1. Covered Persons may not engage in personal securities
transactions that create an actual or potential conflict of
interest with client trading activity. Thus Covered Persons
have a fiduciary responsibility to ensure that all client
trading activity in a security is completed before engaging
in personal securities transact
2. For purposes of this Section III the term "personal
securities transaction" includes any transaction by a
Covered Person for a "Covered Account", defined as any
account: (a) in which a Covered Person has a direct or
indirect financial interest; or (b) over which such Covered
Person has direct or indirect control over the purchase or
sale of securities. Such Covered Accounts may include, but
are not limited to, accounts of a spouse, minor child,
relative, friend, or personal business associate.
D. PRE-CLEARANCE REQUIREMENTS
1. General Requirement:
a. A Covered Person may not engage in a personal securities
transaction unless it has been pre-cleared by the Legal &
Compliance department following a determination that the
transaction does not give rise to an actual or potential
conflict of interest with client activity in the same
security. This determination shall not be made, and
pre-clearance shall not be given, if there has been a client
account transaction in the same security within seven (7)
calendar days of the proposed personal securities
transaction (the "7-Day Rule").
b. Subject to oversight by the Relevant Management Committee,
the Legal & Compliance department has responsibility for
setting the policy for determining which client accounts
will be matched against each Covered Person's personal
securities transactions.
c. The pre-clearance requirements and procedures set forth in
this paragraph D apply to personal securities transactions
in any security that is not the subject of an exception set
forth in paragraph F below, and specifically apply to
transactions in shares of AMVESCAP and to transactions in
shares of closed-end investment companies and closed-end
investment trusts managed by an AMVESCAP company.
d. In the case of personal securities transactions involving
the purchase or sale of an option on an equity security, the
Legal & Compliance department will determine whether to
pre-clear the transaction by matching the personal
securities transaction against client account activity in
both the option and the underlying security.
e. It shall be the responsibility of the Legal & Compliance
department following pre-clearance of a personal securities
transaction, to monitor client account activity in the same
security for the following seven (7) calendar days to
determine whether the appearance of a conflict is present,
either in conjunction with a particular transaction or as
the result of a pattern of trading activity and, if so,
whether any additional action (such as disgorgement of
profits) is warranted.
2. PRE-CLEARANCE PROCEDURES - The Legal & Compliance Department
shall be responsible for setting appropriate procedures (and
documentation) to carry out the pre-clearance requirements set
forth in this paragraph D. These procedures shall include the
following:
a. A Covered Person must complete and submit to the Legal &
Compliance department a pre-clearance request form setting forth
details of each proposed personal securities transaction;
b. The Legal & Compliance department will review the form and notify
the covered person whether the request is authorized or denied
(as time-stamped on the form).
1. Investment Division personnel should seek final approval
from the Chief Investment Officer; and Trading Desk
personnel should seek approval from the Head Trader.
c. The Covered Person is permitted to trade WITHIN ONE TRADING DAY
following the date of approval. If the trade is not executed
during the time period a new pre-clearance request form must be
submitted.
3. DE MINIMIS EXEMPTION
A pre-clearance request relating to a proposed personal
securities transaction involving 2,000 or fewer shares (or 20 or
fewer contracts, in the case of options) of an issuer that has at
least US $1 billion (or non-US. currency equivalent) in market
capitalization shall not be subject to the 7-Day Rule or other
provisions of sub-paragraph D.1, provided that:
(a) Any pre-clearance approval given for such transaction shall
be valid for ten (10) calendar days only; and
(b) The de minimis exemption may be used once every thirty (30)
days for a specific security.
E. REPORTING REQUIREMENTS
1. INITIAL REPORTS BY COVERED PERSONS - Within 10 days of
commencement of employment each Covered Person must provide to
the Legal & Compliance department a complete list of all of his
or her Covered Accounts, including individual securities held
within those accounts or in certificate form.
2. REPORTS OF TRADE CONFIRMATIONS - Within (ten) 10 calendar days of
settlement of each personal securities transaction, the Covered
Person engaging in the transaction must submit or ensure their
broker mails a duplicate copy of the broker-dealer confirmation
for such transaction to the Legal & Compliance department. (Note:
The duplicate confirmation must be generated by the broker-dealer
and mailed directly to the legal/compliance department. Employee
delivered Photostat copies are not acceptable unless requested by
the Legal & Compliance department.)
3. ANNUAL UPDATE AND CERTIFICATION - No later that February 1 of
each year, each Covered Person must file with the
legal/compliance department an annual account statement that
lists, as of December 31 of each prior year, all Covered Accounts
of such Covered Person and all securities holdings of such
Covered Accounts. Annually, each Covered Person must execute and
provide his/her legal/compliance department with a certificate of
compliance with these Policies and any other personal trading
policies then in effect which apply to such Covered Person.
F. EXCEPTIONS TO PRE-CLEARANCE AND REPORTING REQUIREMENTS
1. The following securities are not subject to either the
pre-clearance requirements or the reporting requirements set
forth in this Section III:
a. Open-end mutual funds and open-end unit trusts, other than
INVESCO Funds accounts.
b. Variable annuities, variable life products and other similar
unit-based insurance products issued by insurance companies
and insurance company separate accounts.
c. U.S. (Federal) Government Securities, and d. Money market
instruments (as defined by the Legal & Compliance
department).
2. INDEPENDENT DIRECTORS - Personal securities transactions of an
Independent Director of AMVESCAP are not subject to either the
pre-clearance or reporting requirements set forth in this Section
III except with respect to personal securities transactions in
the shares of AMVESCAP or shares of any closed-end investment
company or investment trust served by such Independent Director
in a Director or Trustee capacity. For purposes of this
exception, the term "Independent Director" includes (a) any
Director of AMVESCAP (i) who is neither an officer nor employee
of AMVESCAP or of any AMVESCAP Company, or (ii) who is not
otherwise "connected with" AMVESCAP or any AMVESCAP Company
within the meaning of the London Stock Exchange Yellow Book;
3. Personal securities transactions in the following are NOT SUBJECT
TO THE PRE-CLEARANCE REQUIREMENTS set forth in this Section III
BUT ARE SUBJECT TO THE REPORTING REQUIREMENTS:
o INVESCO Funds mutual fund accounts;
o Securities acquired through automatic dividend
reinvestment plans;
o Securities acquired through the receipt or exercise of
rights or warrants issued by a company on a pro rata
basis to all holders of a class of security;
o A City Index (e.g., IG Index) (UK only);
o Futures contracts;
o Commodities contracts;
o Futures or Options on a stock market index, a foreign
currency or commodity; and
o Exchange Traded Funds (ETFs) such as NASDAQ 100 shares,
S & P Depository Receipts, etc.
4. DELEGATED DISCRETIONARY ACCOUNTS - Pre-clearance is not required
for transactions in a Covered Account as to which a Covered
Person is not exercising power over investment discretion,
provided that:
a. The Covered Account is the subject of a written
contract providing for the delegation by the Covered
Person of substantially all investment discretion to
another party;
b. The Covered Person has provided the Legal & Compliance
department with a copy of such written agreement and a
Pre-Approval Request;
c. The Covered Person certifies in writing that he/she has
not discussed, and will not discuss, potential
investment decisions with the party to whom investment
discretion has been delegated; and
d. The Covered Person complies with all reporting
requirements outlined in paragraph E above, and also
provides or makes provision for the delivery of monthly
and/or quarterly statements of discretionary account
holdings to the Legal & Compliance department.
THE FOREGOING EXCEPTION FROM THE PRE-CLEARANCE REQUIREMENT DOES
NOT APPLY TO TRANSACTIONS BY A DELEGATED DISCRETIONARY ACCOUNT IN
SHARES OF AMVESCAP. All employees are required to notify parties
to whom they have delegated investment discretion that such
discretion may not be exercised to purchase shares of AMVESCAP
and that any sales of AMVESCAP shares by a Covered Account which
is the subject of delegated investment discretion are subject to
the pre-clearance and reporting requirements set forth in this
Section III and the policies and provisions set forth in Section
IV below.
G. RESTRICTIONS ON CERTAIN ACTIVITIES
In order to avoid even the appearance of conduct that might be deemed
contrary to a client's best interests, Covered Persons (other than
Independent Directors of AMVESCAP) are subject to the following additional
restrictions and prohibitions relating to certain investment activities and
related conduct:
1. PROHIBITION AGAINST TRADING IN SECURITIES ON "RESTRICTED LISTS":
It is recognized that there may be occasions when AMVESCAP, an
AMVESCAP Company, or a Covered Person who is a key executive of
AMVESCAP or an AMVESCAP Company, may have a special relationship
with an issuer of securities. In such occasions the Board of
Directors of AMVESCAP or the Relevant Management Committee may
decide to place the securities of such issuer on a "restricted
list", to be maintained by the Legal & Compliance department. All
employees are prohibited from engaging in any personal securities
transactions in a security on a "restricted list".
2. PROHIBITION AGAINST SHORT-TERM TRADING ACTIVITIES: Covered
Persons are prohibited from profiting in an "opposite
transaction" in the same security within 60 days of its purchase
or sale. Generally, only those securities requiring pre-clearance
are subject to this Short-Term Trading Prohibition. However,
while options and futures transactions are generally not subject
to this Short-Term Trading Prohibition, such transactions may not
be used to circumvent the prohibition.
3. PROHIBITION AGAINST SHORT SALES:
Covered Persons are prohibited from engaging in short sales of
securities.
4. PROHIBITION AGAINST PURCHASES IN INITIAL PUBLIC OFFERINGS:
Covered Persons are prohibited from purchasing securities in
initial public offerings except in those circumstances where
different amounts of such offerings are specified for different
investor types (e.g. private investors and institutional
investors) and the purchase has been pre-cleared by the Legal &
Compliance department on the basis that it is not likely to
create any actual or potential conflict of interest.
5. RESTRICTIONS ON THE PURCHASE OF RESTRICTED SECURITIES ISSUED BY
PUBLIC COMPANIES:
Generally, Covered Persons are discouraged from investing in
restricted securities of public companies. A Covered Person may
purchase such securities if the purchase has been pre-cleared by
the Legal & Compliance department following a determination that
the proposed transaction does not present any actual or potential
conflict of interest.
6. RESTRICTIONS ON PRIVATE PLACEMENTS (INCLUDING HEDGE FUNDS):
A Covered Person may not purchase or sell any security obtained
through a private placement (including the purchase or sale of an
interest in a so-called "hedge fund") unless such transaction has
been pre-cleared by the Legal & Compliance department following a
determination that the proposed transaction does not present any
actual or potential conflict of interest.
In addition, if a Covered Person owning securities of a privately
held company knows that the company is proposing to engage in a
public offering involving securities of that company (whether or
not such securities are of the same class as the securities held
by such Covered Person), he/she must disclose this information to
the Legal & Compliance department which will determine whether
further action should be taken.
7. PARTICIPATION IN INVESTMENT CLUBS:
A Covered Person is prohibited from participating in an
investment club unless such participation has been pre-cleared
(form) by the Legal & Compliance department following its
determination that the following conditions have been satisfied:
a. the Covered Person's participation does not create any
actual or potential conflict of interest;
b. the Covered Person does not control investment
decision-making for the investment club; and
c. the Covered Person has made satisfactory arrangements
to ensure that duplicate trade confirmations of
investment club activity and quarterly statements of
investment club holdings are provided to the Legal &
Compliance department by brokers acting on behalf of
the investment club.
Should the Covered Person contribute, but not necessarily
control, investment decision-making for the investment club, all
transactions by the investment club would be subject to
pre-clearance.
Note: Exemption from trading pre-clearance for Investment Club
participation may be made by the Legal & Compliance department.
Such account activity will be periodically reviewed and if deemed
necessary, the pre-clearance exemption may be revoked at any
time.
THE FOREGOING EXCEPTION FROM THE PRE-CLEARANCE REQUIREMENT DOES
NOT APPLY TO TRANSACTIONS IN SHARES OF AMVESCAP PLC. All
employees are required to notify parties with whom they
participate in investment clubs with, that the club may not
purchase or sell shares of AMVESCAP without prior clearance, and
such transaction in AMVESCAP shares by a Covered Account are
subject to the pre-clearance and reporting requirements set forth
in this Section III and the policies and provisions set forth in
Section IV below.
IV. TRANSACTIONS IN SHARES OF AMVESCAP PLC
(ALL EMPLOYEES)
A. Personal securities transactions in shares of AMVESCAP PLC by
Directors, officers and employees of AMVESCAP and the AMVESCAP
Companies are governed by AMVESCAP's Share Dealing Code (the
"Code", a copy of which is attached hereto) adopted in accordance
with requirements of the London Stock Exchange. The Code is
incorporated by reference and made a part of these Policies so
that a violation of the Code is also deemed a violation of these
Policies. Among other provisions the Code generally prohibits all
trading in AMVESCAP shares during certain defined "closed
periods" which are typically two calendar months before annual
results and earnings announcements and one calendar month before
quarterly results and earnings announcements.
B. The prohibitions against insider trading set forth above in
Section II of these Policies and the pre-clearance and reporting
provisions set forth above in Section III of these Policies apply
to personal securities transactions in shares of AMVESCAP.
C. The foregoing provisions apply to all Directors, officers and
employees of AMVESCAP, including both Covered Persons and Exempt
Persons as defined in Section III, and apply to all personal
securities transactions by or for the benefit of such persons,
including transactions in discretionary accounts maintained for
such persons.
AMVESCAP OPTIONS AND SHARES TRANSACTIONS
Purchases and sales of AMVESCAP shares (including ordinary shares
and ADRs) is any INVESCO or AMVESCAP employee benefit accounts
are subject to controls enforced by the plan administrator.
Accordingly, these transactions are not subject to pre-clearance.
ANY OTHER PURCHASES AND SALES OF AMVESCAP ORDINARY SHARES AND
ADRS, HOWEVER, ARE SUBJECT TO PRE-CLEARANCE UNDER THE ABOVE RULES
AND PROCEDURES.
Additionally, except as part of an INVESCO or AMVESCAP employee
benefit program, Covered Persons are prohibited from engaging in
any transactions in options on AMVESCAP securities.
V. ADMINISTRATION OF POLICIES (ALL EMPLOYEES)
A. WITH THE EXCEPTION OF PART IV ABOVE, administration of these
Policies is the responsibility of the various Legal & Compliance
departments within the AMVESCAP group, subject to general
oversight by the Relevant Management Committees.
B. RESPONSIBILITY for the administration of these Policies as they
relate to transactions in AMVESCAP shares (Part IV above) rests
jointly with the AMVESCAP Company Secretary, responsible for
interpretations of the Code; its Group Compliance Officer,
responsible for determinations made in the event of possible
violations of the Code or of these Policies; and its various
Legal & Compliance departments, responsible for pre-clearance and
reporting of transactions. In any event, responsibility for these
Policies as they pertain to trading in AMVESCAP shares is subject
to general oversight by the AMVESCAP Board of Directors.
C. ADMINISTRATIVE RESPONSIBILITY FOR THESE POLICIES INCLUDES:
1. The authority to adopt such forms and procedures as may be
appropriate to implement these Policies;
2. The authority to recommend and to implement policies that
are more restrictive than those set forth in these Policies;
3. The authority, on a case by case basis, and to a limited
extent, to approve exceptions from any of the prohibitions,
restrictions or procedures set forth in Part III of these
Policies; and
4. The authority to review violations of the Policies and to
recommend to the Relevant Management Committee (or to the
AMVESCAP Board of Directors in the case of violation of the
Policies set forth in Part IV), such penalties and sanctions
as may be appropriate under the circumstances.
D. EXCEPTIONS - Where exceptions are approved under subparagraph C
(3) above, a determination shall be made, in the case of each
such exception, that it is consistent with the Core Principles
set forth in Section I of these Policies and that it does not
create an actual or potential conflict of interest. The approval
of the exception and the circumstances surrounding such approval
shall be noted in writing and reported to the Relevant Management
Committee at the next available opportunity.
E. PENALTIES AND SANCTIONS
1. Persons who are found to have violated the prohibitions
against Insider Trading set forth in Section II of these
Policies may be subject to severe penalties and sanctions
including, but not limited to, disgorgement of profits and
suspension or termination of employment. These penalties and
sanctions shall be in addition to any penalties that may be
imposed by law, including (a) civil injunctions; (b)
revocation of licenses and registrations; (c) substantial
fines; and/or (d) imprisonment.
2. Persons who are found to have knowingly violated any of the
other provisions of these Policies, including the
pre-clearance and reporting requirements, the restrictions
against certain defined activities and the rules governing
trading in shares of AMVESCAP, shall be subject to a range
of possible sanctions including, among other actions: (a)
required special education or training; (b) letters of
admonition or censure; (c) restrictions on further personal
securities transactions; (d) disgorgement of profits; and
(e) reassignment, demotion, suspension or termination of
employment.
POLICY FOR DIRECTOR AND EMPLOYEE PERSONAL DEALINGS
IN THE SHARES AND OPTIONS OF AMVESCAP PLC
(AMVESCAP POLICY 07/18/2001)
INTRODUCTION
The London Stock Exchange requires all listed companies to adopt a share dealing
policy and procedures designed to prevent members of the Board of Directors and
employees from improperly using material non-public information. We must comply
with this policy if we wish to deal in the Ordinary Shares, American Depository
Receipts ("ADRs"), or exercise share options of AMVESCAP PLC.
PERSONS COVERED BY THE POLICY
All members of the AMVESCAP PLC Board of Directors, Executive Board, and all
employees are subject to this policy. In addition, all "connected persons" of
Board members or employees are also covered.
Persons connected to directors or employees includes:
o Our spouses;
o Our dependent children under the age of 18 (including adopted,
illegitimate or step-children);
o Any body corporate, or other business entity, with which the director
or employee is "associated" i.e., where 20% or more of the equity
share capital or voting power is controlled by the director or
employee and their connected persons;
o The trustees of any trust where the beneficiaries of the trust include
any of the above connected persons (with the exception of employee
share schemes and pension schemes);
o Our business partners i.e., a person or business entity with which we
share a mutual economic interest under an agreement to share that
interest.
DEALING PROCEDURES
All of our transactions in AMVESCAP PLC ordinary shares or ADRs must be approved
in advance, including those in plans or trusts sponsored by the Company. Members
of the Board of Directors and Executive Board must obtain prior clearance from
the Group Compliance Officer. Employees must obtain approval in accordance with
the personal share dealing policies in effect in their business unit. Generally
this will mean seeking approval via their local compliance team which will be
notified by the Company Secretary of any dates when employees are not free to
deal. Details of "close periods", namely periods when employees are not free to
deal, are also circulated to all employees on the internal e-mail system.
All of our options transactions, including those through plans or trusts
sponsored by the Company, must also be approved in advance. Members of the Board
of Directors, Executive Board members, and employees must obtain approval from
the Group Company Secretary. The Request for Authorization to Deal Form must be
used for dealing in shares and ADRs. The Application Form for the Purpose of
Exercises of Share Options must be used for options transactions. We are
obligated to inform our connected persons that they are also subject to these
requirements. Any dealing they may do must be approved as described above.
PROHIBITED DEALINGS
In order to prevent even the appearance of impropriety, we must be careful to
deal in AMVESCAP shares or options only when not in possession of material
non-public information. This includes, but is not limited to the following:
o No share dealing within two months before the Company announces its
annual results or dividends;
o No share dealing within one month before the announcement of
semi-annual or quarterly results;
o The exercise of an option or right to purchase under an employee share
scheme is generally not permissible where the final exercise date
falls within the above periods, although certain transactions may be
permissible depending upon the circumstances. In any event, if you are
unsure as to your ability to exercise an option you should contact the
Company Secretary;
o No short term or day trading of shares or ADRs, i.e. purchases and
sales within a 30 day period.
Any questions regarding this policy or procedures should be referred to the
Group Compliance Officer or Group Company Secretary.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Audit Committee of the Boards of Directors of the INVESCO Mutual Funds is
composed of four of the Fund's directors who are not affiliated with the Funds'
investment adviser. All members are independent. The Board has determined that
each of the Committee members is "financially literate" and that at least two
members have "accounting or related financial management expertise" as used in
the New York Stock Exchange definitions of the terms.
Under the recently enacted Sarbanes-Oxley Act, if the Boards of Directors have
not determined that an "audit committee financial expert," a new term defined by
the SEC and based on criteria contained in the Act, is serving on the Audit
Committee, it must disclose this fact and explain why it does not have such an
expert. The Boards of Directors have determined that none of the members of the
Audit Committee meet the technical requirements of the definition. Moreover, the
Boards believe that for the following reasons it is not necessary for registered
investment companies such as the Funds, with an audit committee that meets the
New York Stock Exchange requirements of financial literacy, to have a "financial
expert" as a member of the committee.
1. The financial statements of and accounting principles applying to
registered investment companies such as the Funds are relatively
simple, straightforward and transparent compared to operating
companies. The significant accounting issues are valuation of
securities and other assets (regulated under the Investment Company
Act of 1940 and computed daily), accrual of expenses, allocation of
joint expenses shared with other entities such as insurance premiums
and disclosures of all related party transactions. Equally important
is a knowledge of the tax laws applying to registered investment
companies. None of the accounting issues involving corporate America
that have received recent publicity such as sophisticated derivative
transactions and special purpose entities are present in financial
reporting for registered investment companies.
2. During the years that the Funds has been filing financial reports
under the 1940 Act since their inception, there has never been a
requirement for a financial report or statement to be restated.
3. The current members of the Audit Committee have the experience of 23.5
years serving on this Audit Committee and in the Boards' judgement,
through this experience and experience with other public corporation's
financial affairs, they have an understanding of the relevant
generally accepted accounting principles governing the Funds'
financial statements, tax laws applying to the Funds, the Funds
internal accounting controls and audit committee functions necessary
to satisfy the objectives of the Sarbanes-Oxley Act with respect to
the financial statements, auditing process and internal controls of
the Funds.
4. The Audit Committee has the capability of employing a consultant who
satisfies the technical definition of a "financial expert" and will do
so from time to time if circumstances warrant."
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable to this filing.
ITEM 5. [RESERVED]
ITEM 6. [RESERVED]
ITEM 7. NOT APPLICABLE
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES
(a) Based on their evaluation of the Registrant's Disclosure Controls and
Procedures as of a date within 90 days of the Filing Date, the
Registrant's President and Treasurer & Chief Financial and Accounting
Officer have determined that the Disclosure Controls and Procedures
(as defined in Rule 30a-2(c) under the Act) are designed to ensure
that information required to be disclosed by the Registrant is
recorded, processed, summarized and reported by the filing date, and
that information required to be disclosed in the report is
communicated to the Registrant's management, as appropriate, to allow
timely decisions regarding required disclosure.
(b) There were no significant changes in the Registrant's internal
controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, and there were no
corrective actions with regard to the significant deficiencies and
material weaknesses.
ITEM 10. EXHIBITS
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the Registrant
intends to satisfy the Item 2 requirements through filing of an
exhibit.
Not applicable to this filing.
(b) A separate certification for each principal executive officer and
principal financial officers of the Registrant as required by Rule
30a-2 under the Act.
"Attached hereto"
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 authorized.
INVESCO MONEY MARKET FUNDS, INC.
By: /s/ Raymond R. Cunningham
------------------------------------------------------------
Raymond R. Cunningham, President and Chief Executive Officer
Date: July 31, 2003
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 authorized.
INVESCO MONEY MARKET FUNDS, INC.
By: /s/ Ronald L. Grooms
--------------------------------------------------------------------
Ronald L. Grooms, Treasurer & Chief Financial and Accounting Officer
Date: July 31, 2003