Prospectus
April
26, 2024
Class: A
(ALAAX ), C (CLIAX ), R
(RLIAX ), Y (ALAYX ), R5
(ILAAX ), R6 (IIASX )
Invesco
Income Allocation Fund
As with all
other mutual fund securities, the U.S. Securities and Exchange Commission (SEC)
has not approved or disapproved these securities or passed upon the adequacy of
this prospectus. Any representation to the contrary is a criminal
offense.
An investment
in the Fund:
■
is not FDIC
insured;
■
may lose
value; and
■
is not
guaranteed by a bank.
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Back
Cover |
Invesco
Income Allocation Fund
The Fund's
investment objective is current income and, secondarily, growth of
capital.
This table
describes the fees and expenses that you may pay if you buy, hold and sell
shares of the Fund.
The
table and Examples below do not reflect any transaction fees
that may be charged by financial intermediaries or commissions that a
shareholder may be required to pay directly to its financial intermediary when
buying or selling Class Y or Class R6 shares.
You may
qualify for sales charge discounts if you and your family invest, or agree to
invest in the future, at least $50,000 in the
Invesco Funds. More information about these and other discounts
is available from your financial professional and in the section “Shareholder
Account Information – Initial Sales Charges (Class A Shares Only)” on page A-3
of the prospectus and the section “Purchase, Redemption and Pricing of Shares –
Purchase and Redemption of Shares” on page L-1 of the statement of additional
information (SAI).
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Class: |
A |
C |
R |
Y |
R5 |
R6 |
Maximum
Sales Charge (Load) Imposed on
Purchases
(as a percentage of offering price) |
% |
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Maximum
Deferred Sales Charge (Load) (as a
percentage
of original purchase price or
redemption
proceeds, whichever is less) |
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% |
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Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the
value
of your investment) | ||||||
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Class: |
A |
C |
R |
Y |
R5 |
R6 |
Management
Fees |
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Distribution
and/or Service (12b-1) Fees |
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Other
Expenses |
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Acquired
Fund Fees and Expenses |
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Total
Annual Fund Operating Expenses |
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1 |
A
contingent deferred sales charge may apply in some cases. See “Shareholder
Account
Information-Contingent
Deferred Sales Charges
(CDSCs).” |
The
Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. This
Example does not include commissions and/or other forms of compensation that
investors may pay on transactions in Class Y and Class R6 shares. The Example
also assumes that your investment has a 5% return each year and that the Fund’s
operating expenses remain the same.
Although
your actual costs may be higher or lower, based on these assumptions,
your costs would be:
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1
Year |
3
Years |
5
Years |
10
Years |
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Class
A |
$ |
$ |
$ |
$ |
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Class
C |
$ |
$ |
$ |
$ |
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Class
R |
$ |
$ |
$ |
$ |
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Class
Y |
$ |
$ |
$ |
$ |
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Class
R5 |
$ |
$ |
$ |
$ |
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Class
R6 |
$ |
$ |
$ |
$ |
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1
Year |
3
Years |
5
Years |
10
Years |
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Class
A |
$ |
$ |
$ |
$ |
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Class
C |
$ |
$ |
$ |
$ |
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Class
R |
$ |
$ |
$ |
$ |
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Class
Y |
$ |
$ |
$ |
$ |
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Class
R5 |
$ |
$ |
$ |
$ |
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Class
R6 |
$ |
$ |
$ |
$ |
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The Fund is a
“fund of funds,” and invests its assets in other underlying mutual funds advised
by Invesco Advisers, Inc. (Invesco or the Adviser) and exchange-traded funds
(ETFs) and other pooled investment vehicles advised by Invesco Capital
Management LLC (Invesco Capital) or mutual funds, ETFs and other pooled
investment vehicles advised by unaffiliated advisers (the underlying funds).
Invesco and Invesco Capital are affiliates of each other as they are both
indirect wholly-owned subsidiaries of Invesco Ltd. The Fund invests its assets
in a selection of underlying funds which invest primarily in international or
domestic equities, fixed-income securities or real estate investment trusts
(REITs). The Fund’s target allocation is to invest 60%-70% of its total assets
in underlying funds that invest primarily in fixed-income securities and 30%-40%
of its total assets in underlying funds that invest primarily in equity
securities, including REITs.
The
Adviser uses a three-step process to create the Fund’s portfolio including:
(1) a strategic asset allocation by the Adviser among broad asset classes; (2)
the actual selection by the Adviser of underlying funds to represent the broad
asset classes and the determination by the Adviser of target weightings in these
underlying funds; in the case where there are multiple funds in a broad asset
class, the Adviser attempts to balance the amount of active risk contributed by
each underlying fund in order to determine the allocation; and (3) the ongoing
monitoring of the Fund’s asset class allocations, underlying funds and target
weightings in the underlying funds.
The
Adviser rebalances the Fund’s investments in the underlying funds on an annual
basis to keep them at their target weightings. Although the Adviser has the
ability to rebalance on a more frequent basis if it believes it is appropriate
to do so, the Fund’s asset class weightings may not match the above percentage
weightings during a quarter due to market fluctuations, cash flows and other
factors. The Adviser may change the Fund’s asset class allocations, the
underlying funds or the target weightings in the underlying funds without notice
to, or approval by, shareholders.
1 Invesco
Income Allocation Fund
2 Invesco
Income Allocation Fund
3 Invesco
Income Allocation Fund
4 Invesco
Income Allocation Fund
5 Invesco
Income Allocation Fund
■
■
■
■
■
■
6 Invesco
Income Allocation Fund
Fund
performance reflects any applicable fee waivers and expense reimbursements.
Performance returns would be lower without applicable fee waivers and expense
reimbursements.
All
Fund performance shown assumes the reinvestment of dividends and capital
gains and the effect of the Fund’s expenses.
Updated
performance information is available on the Fund's website at www.invesco.com/us .
Annual Total Returns
The bar chart
does not reflect sales loads. If it did, the annual total returns shown would be
lower.
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Class
A |
Period
Ended |
Returns |
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- |
Average Annual Total Returns (for the periods ended December 31, 2023)
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Inception
Date |
1
Year |
5
Years |
10
Years |
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Class
A |
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Return
Before Taxes |
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% |
% |
% |
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Return
After Taxes on Distributions |
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- |
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Return
After Taxes on Distributions and Sale of
Fund
Shares |
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Class
C |
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Class
R |
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Class
Y |
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Class
R5 |
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Class
R6 |
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1 |
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Custom
Invesco Income Allocation Index2 |
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S&P
500®
Index expenses
or taxes) |
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1
2
Management
of the Fund
Investment
Adviser: Invesco Advisers, Inc. (Invesco or the Adviser)
|
Portfolio
Managers |
Title |
Length
of Service on the Fund |
|
Jeffrey
Bennett, CFA |
Portfolio
Manager |
2020 |
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Alessio
de Longis, CFA |
Portfolio
Manager |
2023 |
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7 Invesco
Income Allocation Fund
Purchase
and Sale of Fund Shares
You may
purchase, redeem or exchange shares of the Fund on any business day through your
financial adviser or by telephone at 800-959-4246. Shares of the Fund, other
than Class R5 and Class R6 shares, may also be purchased, redeemed or exchanged
on any business day through our website at www.invesco.com/us or by mail to
Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO
64121-9078.
The
minimum investments for Class A, C, R and Y shares for fund accounts are
as follows:
|
Type
of Account |
Initial
Investment
Per
Fund |
Additional
Investments
Per
Fund |
Asset
or fee-based accounts managed by your financial
adviser |
None |
None |
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Employer
Sponsored Retirement and Benefit Plans and
Employer
Sponsored IRAs |
None |
None |
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IRAs
and Coverdell ESAs if the new investor is purchasing
shares
through a systematic purchase plan |
$25 |
$25 |
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All
other types of accounts if the investor is purchasing shares
through
a systematic purchase plan |
50 |
50 |
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IRAs
and Coverdell ESAs |
250 |
25 |
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All
other accounts |
1,000 |
50 |
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With
respect to Class R5 and Class R6 shares, there is no minimum initial
investment for Employer Sponsored Retirement and Benefit Plans investing through
a retirement platform that administers at least $2.5 billion in retirement plan
assets. All other Employer Sponsored Retirement and Benefit Plans must meet a
minimum initial investment of at least $1 million in each Fund in which it
invests.
For
all other institutional investors purchasing Class R5 or Class R6 shares, the
minimum initial investment in each share class is $1 million, unless such
investment is made by (i) an investment company, as defined under the Investment
Company Act of 1940, as amended (1940 Act), that is part of a family of
investment companies which own in the aggregate at least $100 million in
securities, or (ii) an account established with a 529 college savings plan
managed by Invesco, in which case there is no minimum initial
investment.
There
are no minimum investment amounts for Class R6 shares held through
retail omnibus accounts maintained by an intermediary, such as a broker, that
(i) generally charges an asset-based fee or commission in addition to those
described in this prospectus, and (ii) maintains Class R6 shares and makes them
available to retail investors.
Tax
Information
The Fund’s
distributions generally are taxable to you as ordinary income, capital gains, or
some combination of both, unless you are investing through a tax-advantaged
arrangement, such as a 401(k) plan, 529 college savings plan or individual
retirement account. Any distributions from a 401(k) plan or individual
retirement account may be taxed as ordinary income when withdrawn from such plan
or account.
Payments
to Broker-Dealers and Other Financial Intermediaries
If you
purchase the Fund through a broker-dealer or other financial intermediary (such
as a bank), the Fund, the Fund’s distributor or its related companies may pay
the intermediary for the sale of Fund shares and related services. These
payments may create a conflict of interest by influencing the broker-dealer or
other intermediary and your salesperson or financial adviser to recommend the
Fund over another investment. Ask your salesperson or financial adviser or visit
your financial intermediary’s website for more information.
Investment Objective(s), Strategies, Risks and Portfolio Holdings
Objective(s)
and Strategies
The Fund’s
investment objective is current income and, secondarily, growth of capital. The
Fund’s investment objectives may be changed by the Board of Trustees (the Board)
without shareholder approval.
The
Fund is a “fund of funds,” and invests its assets in other underlying
mutual funds
advised by Invesco and ETFs and other pooled investment vehicles advised by
Invesco Capital or mutual funds, ETFs and other pooled investment vehicles
advised by unaffiliated advisers (the underlying funds). Invesco and Invesco
Capital are affiliates of each other as they are both indirect wholly-owned
subsidiaries of Invesco Ltd. The Fund invests its assets in a selection of
underlying funds which invest primarily in international or domestic equities,
fixed-income securities or REITs. The Fund’s target allocation is to invest
60%-70% of its total assets in underlying funds that invest primarily in
fixed-income securities and 30%-40% of its total assets in underlying funds that
invest primarily in equity securities, including REITs.
The
Adviser uses a three-step process to create the Fund’s portfolio including:
(1) a strategic asset allocation by the Adviser among broad asset classes; (2)
the actual selection by the Adviser of underlying funds to represent the broad
asset classes and the determination by the Adviser of target weightings in these
underlying funds; in the case where there are multiple funds in a broad asset
class, the Adviser attempts to balance the amount of active risk contributed by
each underlying fund in order to determine the allocation; and (3) the ongoing
monitoring of the Fund’s asset class allocations, underlying funds and target
weightings in the underlying funds.
The
Adviser rebalances the Fund’s investments in the underlying funds on an annual
basis to keep them at their target weightings. Although the Adviser has the
ability to rebalance on a more frequent basis if it believes it is appropriate
to do so, the Fund’s asset class weightings may not match the above percentage
weightings during a quarter due to market fluctuations, cash flows and other
factors. The Adviser may change the Fund’s asset class allocations, the
underlying funds or the target weightings in the underlying funds without notice
to, or approval by, shareholders.
In
anticipation of or in response to market, economic, political, or other
conditions,
the Fund’s portfolio managers may temporarily use a different investment
strategy for defensive purposes. If the Fund’s portfolio managers do so,
different factors could affect the Fund’s performance and the Fund may not
achieve its investment objective.
The
Fund’s investments in the types of securities and other investments described in
this prospectus vary from time to time, and, at any time, the Fund may not be
invested in all of the types of securities and other investments described in
this prospectus. The Fund may also invest in securities and other investments
not described in this prospectus.
For
more information, see “Description of the Funds and Their Investments
and Risks” in the Fund’s SAI.
Risks
The principal
risks of investing in the Fund and the underlying funds are:
Market
Risk. The market
values of an underlying fund’s investments, and therefore the value of an
underlying fund’s shares, will go up and down, sometimes rapidly or
unpredictably. Market risk may affect a single issuer, industry or section of
the economy, or it may affect the market as a whole. The value of an underlying
fund’s investments may go up or down due to general market conditions that are
not specifically related to the particular issuer, such as real or perceived
adverse economic conditions, changes in the general outlook for revenues or
corporate earnings, changes in interest or currency rates, regional or global
instability, or adverse investor sentiment generally. The value of an underlying
fund’s investments may also go up or down due to factors that affect an
individual issuer or a particular industry or
8 Invesco
Income Allocation Fund
sector, such
as changes in production costs and competitive conditions within an industry. In
addition, natural or environmental disasters, widespread disease or other public
health issues, war, military conflict, acts of terrorism, economic crisis or
other events may have a significant impact on the value of an underlying fund’s
investments, as well as the financial markets and global economy generally. Such
circumstances may also impact the ability of the Adviser to effectively
implement an underlying fund’s investment strategy. During a general downturn in
the financial markets, multiple asset classes may decline in value. When markets
perform well, there can be no assurance that specific investments held by an
underlying fund will rise in value.
■
Market
Disruption Risks Related to Armed Conflict. As a result
of increasingly interconnected global economies
and financial
markets, armed conflict between countries or in a geographic region, for example
the current conflicts
between
Russia
and Ukraine
in Europe
and Hamas and
Israel in the
Middle
East,
has
the potential
to adversely impact an underlying fund’s investments. Such
conflicts,
and other
corresponding events, have had, and could continue to have, severe negative
effects on regional and global economic and financial markets, including
increased volatility, reduced liquidity, and overall uncertainty. The negative
impacts may be particularly acute in certain sectors.
The
timing and
duration of such conflicts, resulting sanctions, related events and other
implications cannot be predicted. The foregoing may result in a negative impact
on Fund performance and the value of an investment in an underlying fund, even
beyond any direct investment exposure underlying fund may have to issuers
located in or with significant exposure to an impacted country or
geographic
regions.
Fund
of Funds Risk. The Fund’s
performance depends on that of the underlying funds in which it invests.
Accordingly, the risks associated with an investment in the Fund include the
risks associated with investments in the underlying funds. The Fund will
indirectly pay a proportional share of the fees and expenses of the underlying
funds in which it invests. There is a risk that the Fund will vary from its
target weightings (if any) in the underlying funds due to factors such as market
fluctuations. There can be no assurance that the underlying funds will achieve
their investment objectives, and their performance may be lower than their
represented asset classes. Underlying Funds that are not affiliated with the
Fund may change their portfolio managers, investment objectives, investment
strategies, policies or practices without the approval of the Fund, which may
cause the Fund to withdraw its investments therein at a disadvantageous
time.
Exchange-Traded
Funds Risk. In addition
to the risks associated with the underlying assets held by the exchange-traded
fund, investments in exchange-traded funds are subject to the following
additional risks: (1) the market price of an exchange-traded fund’s shares may
trade above or below its net asset value; (2) an active trading market for the
exchange-traded fund’s shares may not develop or be maintained; (3) trading an
exchange-traded fund’s shares may be halted if the listing exchange’s officials
deem such action appropriate; (4) a passively-managed exchange-traded fund may
not accurately track the performance of the reference asset; and (5) a
passively-managed exchange-traded fund would not necessarily sell a security
because the issuer of the security was in financial trouble unless the security
is removed from the index that the exchange-traded fund seeks to track.
Investment in exchange-traded funds may involve duplication of management fees
and certain other expenses, as the Fund or an underlying fund indirectly bears
its proportionate share of any expenses paid by the exchange-traded funds in
which it invests. Further, certain exchange-traded funds in which the Fund or an
underlying fund may invest are leveraged. Investing in leveraged exchange-traded
funds may result in economic leverage, which does not result in the possibility
of the Fund or an underlying fund incurring obligations beyond its investments,
but nonetheless permits the Fund or an underlying fund to gain exposure that is
greater than would be the case in an unlevered instrument, which can result in
greater volatility.
Index
Risk. Unlike many
investment companies that are “actively managed,” certain underlying funds are
“passive” investors and therefore do not utilize investing strategies that seek
returns in excess of their respective Underlying Index. Therefore, an underlying
fund would not necessarily buy or sell a security unless that security is added
or removed, respectively, from its respective Underlying Index, even if that
security generally is underperforming. If a specific security is removed from an
Underlying Index, certain underlying funds may be forced to sell shares of the
security at an inopportune time or for a price lower than the security’s current
market value. An Underlying Index may not contain the appropriate mix of
securities for any particular economic cycle. Unlike with an actively managed
fund, the Adviser does not use techniques or defensive strategies designed to
lessen the impact of periods of market volatility or market decline. This means
that, based on certain market and economic conditions, an underlying fund’s
performance could be lower than other types of mutual funds with investment
advisers that actively manage their portfolio assets to take advantage of market
opportunities.
Allocation
Risk. The Fund’s
investment performance depends, in part, on how its assets are allocated among
the underlying funds or asset classes. The Adviser’s evaluations and assumptions
regarding the asset classes or the underlying funds in which the Fund invests
may be incorrect, causing the Fund to be invested (or not invested) in one or
more asset classes or underlying funds at an inopportune time. The Adviser’s
allocation of the Fund’s assets among asset classes and underlying funds may
therefore not produce the desired results and could cause the Fund to perform
poorly or underperform the Fund’s benchmark and other available
funds.
■
Affiliated
Portfolio Risk. In managing
the Fund, the Adviser will have authority to select and substitute underlying
funds. The Adviser may be subject to potential conflicts of interest in
selecting underlying funds because the fees paid to the Adviser or its
affiliates by some underlying funds for advisory services are higher than the
fees paid by other underlying funds. In addition, the Fund's portfolio managers
may also serve as portfolio managers of the underlying funds. However, the
Adviser monitors the investment process to seek to identify, address and resolve
any potential issues and has adopted certain compliance procedures which are
designed to address these types of conflicts.
Debt
Securities Risk. The prices
of debt securities held by an underlying fund will be affected by changes in
interest rates, the creditworthiness of the issuer and other factors. An
increase in prevailing interest rates typically causes the value of existing
debt securities to fall and often has a greater impact on longer-duration debt
securities and higher quality debt securities. Falling interest rates will cause
an underlying fund to reinvest the proceeds of debt securities that have been
repaid by the issuer at lower interest rates. Falling interest rates may also
reduce an underlying fund’s distributable income because interest payments on
floating rate debt instruments held by an underlying fund will decline. An
underlying fund could lose money on investments in debt securities if the issuer
or borrower fails to meet its obligations to make interest payments and/or to
repay principal in a timely manner. If an issuer seeks to restructure the terms
of its borrowings or an underlying fund is required to seek recovery upon a
default in the payment of interest or the repayment of principal, an underlying
fund may incur additional expenses. Changes in an issuer’s financial strength,
the market’s perception of such strength or in the credit rating of the issuer
or the security may affect the value of debt securities. An underlying fund’s
credit analysis applied to an underlying fund’s debt securities may fail to
anticipate such changes, which could result in buying a debt security at an
inopportune time or failing to sell a debt security in advance of a price
decline or other credit event.
Changing
Fixed Income Market Conditions Risk. Increases in
the federal funds and equivalent foreign rates or other changes to monetary
policy or regulatory actions may expose fixed income markets to heightened
volatility and reduced liquidity for certain fixed income investments,
9 Invesco
Income Allocation Fund
particularly
those with longer maturities. It is difficult to predict the impact of interest
rate changes on various markets. In addition, decreases in fixed income dealer
market-making capacity may also potentially lead to heightened volatility and
reduced liquidity in the fixed income markets. As a result, the value of an
underlying fund’s investments and share price may decline. Changes in central
bank policies could also result in higher than normal redemptions by
shareholders, which could potentially increase an underlying fund’s portfolio
turnover rate and transaction costs and potentially lower an underlying fund’s
performance returns.
Mortgage-
and Asset-Backed Securities Risk. Mortgage-
and asset-backed securities, including collateralized debt obligations and
collateralized mortgage obligations, differ from conventional debt securities
because principal is paid back over the life of the security rather than at
maturity. Mortgage- and asset-backed securities are subject to prepayment or
call risk, which is the risk that a borrower's payments may be received earlier
or later than expected due to changes in prepayment rates on underlying loans.
Faster prepayments often happen when interest rates are falling. As a result, an
underlying fund may reinvest these early payments at lower interest rates,
thereby reducing an underlying fund's income. Mortgage- and asset-backed
securities also are subject to extension risk. An unexpected rise in interest
rates could reduce the rate of prepayments and extend the life of the mortgage-
and asset-backed securities, causing the price of the mortgage- and asset-backed
securities and an underlying fund’s share price to fall and would make the
mortgage- and asset-backed securities more sensitive to interest rate changes.
An unexpectedly high rate of defaults on the mortgages held by a mortgage pool
will adversely affect the value of mortgage-backed securities and will result in
losses to an underlying fund. Privately-issued mortgage-backed securities and
asset-backed securities may be less liquid than other types of securities and an
underlying fund may be unable to sell these securities at the time or price it
desires. During periods of market stress or high redemptions, an underlying fund
may be forced to sell these securities at significantly reduced prices,
resulting in losses. Liquid privately-issued mortgage-backed securities and
asset-backed securities can become illiquid during periods of market stress.
Privately issued mortgage-related securities are not subject to the same
underwriting requirements for the underlying mortgages that are applicable to
those mortgage-related securities that have government or government-sponsored
entity guarantees. As a result, the mortgage loans underlying privately issued
mortgage-related securities may, and frequently do, have less favorable
collateral, credit risk, liquidity risk or other underwriting characteristics
than government or government-sponsored mortgage-related securities and have
wider variances in a number of terms including interest rate, term, size,
purpose and borrower characteristics. An underlying fund may invest in mortgage
pools that include subprime mortgages, which are loans made to borrowers with
weakened credit histories or with lower capacity to make timely payments on
their mortgages. Liquidity risk is even greater for mortgage pools that include
subprime mortgages.
Municipal
Securities Risk. The risk of
a municipal obligation generally depends on the financial and credit status of
the issuer. Constitutional amendments, legislative enactments, executive orders,
administrative regulations, voter initiatives, and the issuer’s regional
economic conditions may affect the municipal security’s value, interest
payments, repayment of principal and an underlying fund’s ability to sell the
security. Municipal obligations may be more susceptible to downgrades or
defaults during recessions or similar periods of economic stress. Municipal
securities structured as revenue bonds are generally not backed by the taxing
power of the issuing municipality but rather the revenue from the particular
project or entity for which the bonds were issued. If the Internal Revenue
Service determines that an issuer of a municipal security has not complied with
applicable tax requirements, interest from the security could be treated as
taxable, which could result in a decline in the security’s value. In addition,
there could be changes in applicable tax laws or tax treatments that reduce or
eliminate the current federal income tax exemption on
municipal
securities or otherwise adversely affect the current federal or state tax status
of municipal securities.
Senior
Loans and Other Loans Risk. There are a
number of risks associated with an investment in Senior Loans including credit
risk, interest rate risk, liquidity risk, valuation risk and prepayment risk.
These risks are typically associated with debt securities but may be heightened
in part because of the limited public information regarding Senior Loans. Senior
Loans generally are floating rate loans, which are subject to interest rate risk
as the interest paid on the floating rate loans adjusts periodically based on
changes in widely accepted reference rates. Lack of an active trading market,
restrictions on resale, irregular trading activity, wide bid/ask spreads and
extended trade settlement periods may impair an underlying fund’s ability to
sell Senior Loans within its desired time frame or at an acceptable price and
its ability to accurately value existing and prospective investments. Extended
trade settlement periods may result in cash not being immediately available to
an underlying fund. As a result, an underlying fund may have to sell other
investments or engage in borrowing transactions to raise cash to meet its
obligations. The risk of holding Senior Loans is also directly tied to the risk
of insolvency or bankruptcy of the issuing banks. The value of Senior Loans can
be affected by and is sensitive to, changes in government regulation and to
economic downturns in the United States and abroad. These risks could cause an
underlying fund to lose income or principal on a particular investment, which in
turn could affect an underlying fund’s returns. Newly originated loans
(including reissuances and restructured loans) may possess lower levels of
credit document protections than has historically been the case. Accordingly, in
the event of default an underlying fund may experience lower levels of
recoveries than has historically been the norm.
In
addition to the risks typically associated with debt securities senior
loans are
also subject to the risk that a court could subordinate a senior loan, which
typically holds a senior position in the capital structure of a borrower, to
presently existing or future indebtedness or take other action detrimental to
the holders of senior loans. Loans usually have mandatory and optional
prepayment provisions. If a borrower prepays a loan, an underlying fund will
have to reinvest the proceeds in other loans or financial assets that may pay
lower rates of return.
Loans
are subject to the risk that the value of the collateral, if any, securing a
loan may decline, be insufficient to meet the obligations of the borrower, or be
difficult to liquidate. In the event of a default, an underlying fund may have
difficulty collecting on any collateral and would not have the ability to
collect on any collateral for an uncollateralized loan. In addition, the
lenders’ security interest or their enforcement of their security under the loan
agreement may be found by a court to be invalid or the collateral may be used to
pay other outstanding obligations of the borrower. An underlying fund’s access
to collateral, if any, may be limited by bankruptcy, other insolvency laws, or
by the type of loan an underlying fund has purchased. As a result, a
collateralized loan may not be fully collateralized and can decline
significantly in value.
Loan
investments are often issued in connection with highly leveraged transactions.
Such transactions include leveraged buyout loans, leveraged recapitalization
loans, and other types of acquisition financing. These obligations are subject
to greater credit risks than other investments including a greater possibility
that the borrower may default or enter bankruptcy. Highly leveraged loans also
may be less liquid than other loans. If an underlying fund voluntarily or
involuntarily sold those types of loans, it might not receive the full value it
expected.
Due
to restrictions on transfers in loan agreements and the nature of the private
syndication of loans including, for example, the lack of publicly-available
information, some loans are not as easily purchased or sold as publicly-traded
securities. Some loans are illiquid, which may make it difficult for an
underlying fund to value them or dispose of them at an acceptable price when it
wants to. Additionally, valuation of Senior Loans may require greater research
due to limited public information available and elements of judgment may play a
greater role in valuation since there may
10 Invesco
Income Allocation Fund
be a lack of
objective data available. The market price of investments in floating rate loans
is expected to be less affected by changes in interest rates than fixed-rate
investments because floating rate loans pay a floating rate of interest that
will fluctuate as market interest rates do and therefore should more closely
track market movements in interest rates.
Direct
investments in loans and, to a lesser degree, investments in participation
interests in or assignments of loans may be limited. A limited availability of
loans could reduce the amount of attractive investments for an underlying fund.
If market demand for loans increases, the interest paid by loans that an
underlying fund holds may decrease. Due to the possible limited availability of
loans in the market at a given time in which an underlying fund can invest,
there is a risk that an underlying fund may not be able to invest a sufficient
amount in loans at all times to meet its 80% asset investment requirement
(including borrowings for investment purposes).
Compared
to securities and to certain other types of financial assets, purchases and
sales of loans take relatively longer to settle. This extended settlement
process can (i) increase the counterparty credit risk borne by an underlying
fund; (ii) leave an underlying fund unable to timely vote, or otherwise act with
respect to, loans it has agreed to purchase; (iii) delay an underlying fund from
realizing the proceeds of a sale of a loan; (iv) inhibit an underlying fund’s
ability to re-sell a loan that it has agreed to purchase if conditions change
(leaving an underlying fund more exposed to price fluctuations); (v) prevent an
underlying fund from timely collecting principal and interest payments; and (vi)
expose an underlying fund to adverse tax or regulatory consequences. To the
extent the extended loan settlement process gives rise to short-term liquidity
needs, such as the need to satisfy redemption requests, an underlying fund may
hold cash, sell investments or temporarily borrow from banks or other lenders.
If an underlying fund undertakes such measures, an underlying fund’s ability to
pay redemption proceeds in a timely manner, as well as an underlying fund’s
performance, may be adversely affected.
If
an underlying fund invests in a loan via a participation, an underlying
fund will be
exposed to the ongoing counterparty risk of the entity providing exposure to the
loan (and, in certain circumstances, such entity’s credit risk) in addition to
the exposure an underlying fund has to the creditworthiness of the borrower. The
terms of the participation may not entitle an underlying fund to all rights of a
direct lender under the loan (for example, with respect to consent, voting or
enforcement rights). Therefore, an underlying fund’s rights under a
participation interest for a particular loan may be more limited than the rights
of the original lender or an investor who acquires an assignment of that loan.
Where an underlying fund invests in a loan via a participation, an underlying
fund generally will have no right of direct recourse against the borrower or
ability to otherwise directly enforce the terms of the loan
agreement.
In
certain circumstances, loans may not be deemed to be securities, and in the
event of fraud or misrepresentation by a borrower or an arranger, lenders will
not have the protection of the anti-fraud provisions of the federal securities
laws, as would be the case for bonds or stocks. Instead, in such cases, lenders
generally rely on the contractual provisions in the loan agreement itself, and
common-law fraud protections under applicable state law.
Collateralized
Loan Obligations Risk. CLOs are
subject to the risks of substantial losses due to actual defaults by underlying
borrowers, which will be greater during periods of economic or financial stress.
CLOs may also lose value due to collateral defaults and disappearance of
subordinate tranches, market anticipation of defaults, and investor aversion to
CLO securities as a class. The risks of CLOs will be greater if an underlying
fund invests in CLOs that hold loans of uncreditworthy borrowers or if an
underlying fund holds subordinate tranches of the CLO that absorb losses from
the defaults before senior tranches. In addition, CLOs carry risks including
interest rate risk and credit risk.
Covenant
Lite Loans Risk. Because
covenant lite loans contain few or no financial maintenance covenants, covenant
lite loans may not include
terms that
permit the lender of the loan to monitor the borrower’s financial performance
and, if certain criteria are breached, declare a default, which would allow the
lender to restructure the loan or take other action intended to help mitigate
losses. As a result, an underlying fund may experience relatively greater
difficulty or delays in enforcing its rights on its holdings of covenant lite
loans than its holdings of loans or securities with financial maintenance
covenants, which may result in losses to an underlying fund, especially during a
downturn in the credit cycle.
High
Yield Debt Securities (Junk Bond) Risk. An
underlying fund’s investments in high yield debt securities (commonly referred
to as “junk bonds”) and other lower-rated securities will subject an underlying
fund to substantial risk of loss. These securities are considered to be
speculative with respect to the issuer’s ability to pay interest and principal
when due and are more susceptible to default or decline in market value due to
adverse economic, regulatory, political or company developments than higher
rated or investment grade securities. Prices of high yield debt securities tend
to be very volatile. These securities are less liquid than investment grade debt
securities and may be difficult to sell at a desirable time or price,
particularly in times of negative sentiment toward high yield
securities.
U.S.
Government Obligations Risk.
Obligations
of U.S. government
agencies and
authorities receive varying levels of support and may not be backed by the full
faith and credit of the U.S. government, which could affect an underlying fund’s
ability to recover should they default. No assurance can be given that the U.S.
government will provide financial support to its agencies and authorities if it
is not obligated by law to do so.
Subordinated
Debt Risk. Perpetual
subordinated debt is a type of hybrid instrument that has no maturity date for
the return of principal and does not need to be redeemed by the issuer. These
investments typically have lower credit ratings and lower priority than other
obligations of an issuer during bankruptcy, presenting a greater risk for
nonpayment. This risk increases as the priority of the obligation becomes lower.
Payments on these securities may be subordinated to all existing and future
liabilities and obligations of subsidiaries and associated companies of an
issuer. Claims of creditors of such subsidiaries and associated companies will
have priority over the issuer and an underlying fund to the assets of those
subsidiaries and associated companies. Additionally, some perpetual subordinated
debt does not restrict the ability of an issuer’s subsidiaries to incur further
unsecured indebtedness.
Defaulted
Securities Risk. Defaulted
securities pose a greater risk that principal will not be repaid than
non-defaulted securities. An underlying fund will generally not receive interest
payments on defaulted securities and may incur costs to protect its investment.
Defaulted securities and any securities received in an exchange for such
securities may be subject to restrictions on resale. Investments in defaulted
securities and obligations of distressed issuers are considered speculative and
the prices of these securities may be more volatile than non-defaulted
securities.
Unrated
Securities Risk. Because an
underlying fund purchases securities that are not rated by any nationally
recognized statistical rating organization, the investment adviser may
internally assign ratings to those securities, after assessing their credit
quality and other factors, in categories similar to those of nationally
recognized statistical rating organizations. There can be no assurance, nor is
it intended, that the investment adviser’s credit analysis process is consistent
or comparable with the credit analysis process used by a nationally recognized
statistical rating organization. Unrated securities are considered
“investment-grade” or “below-investment-grade” if judged by the investment
adviser to be comparable to rated investment- grade or below-investment-grade
securities. The investment adviser’s rating does not constitute a guarantee of
the credit quality. In addition, some unrated securities may not have an active
trading market or may trade less actively than rated securities, which means
that an underlying fund might have difficulty selling them promptly at an
acceptable price.
11 Invesco
Income Allocation Fund
Credit
Linked Notes Risk. Risks of
credit linked notes include those risks associated with the underlying reference
obligation including but not limited to market risk, interest rate risk, credit
risk, default risk and, in some cases, foreign currency risk. In the case of a
credit linked note that is “funded,” the par amount of the security will
represent the maximum loss that could be incurred on the investment and no
leverage is introduced. An investor in a credit linked note bears counterparty
risk or the risk that the issuer of the credit linked note will default or
become bankrupt and not make timely payment of principal and interest of the
structured security. Credit linked notes may be less liquid than other
investments and therefore harder to dispose of at the desired time and price. In
addition, credit linked notes may be leveraged and, as a result, small changes
in the value of the underlying reference obligation may produce disproportionate
losses to an underlying fund.
TBA
Transactions Risk. TBA
transactions involve the risk that the securities received may be less favorable
than what was anticipated by an underlying fund when entering into the TBA
transaction. TBA transactions also involve the risk that the counterparty will
fail to deliver the securities, exposing an underlying fund to further losses.
Whether or not an underlying fund takes delivery of the securities at the
termination date of a TBA transaction, an underlying fund will nonetheless be
exposed to changes in the value of the underlying investments during the term of
the agreement. If an underlying fund sells short TBA mortgages that it does not
own and the mortgages increase in value, an underlying fund may be required to
pay a higher price than anticipated to purchase the deliverable mortgages to
settle the short sale and thereby incur a loss. A short position in TBA
mortgages poses more risk than holding the same TBA mortgages long. It is
possible that the market value of the mortgage securities an underlying fund
holds in long positions will decline at the same time that the market value of
the mortgage securities an underlying fund has sold short increases, thereby
magnifying any losses. The more an underlying fund pays to purchase the mortgage
securities sold short, the more it will lose on the transaction, which adversely
affects its share price. The loss on a long position is limited to what an
underlying fund originally paid for the TBA mortgage, together with any
transaction costs. In short transactions, there is no limit on how much the
price of a security can increase, thus an underlying fund’s exposure is
theoretically unlimited. An underlying fund normally closes a short sale of TBA
mortgages that it does not own by purchasing mortgage securities on the open
market and delivering them to the broker. An underlying fund may not always be
able to complete or “close out” the short position by purchasing mortgage
securities at a particular time or at an acceptable price. An underlying fund
incurs a loss if an underlying fund is required to buy the deliverable mortgage
securities at a time when they have appreciated in value from the date of the
short sale. An underlying fund will incur increased transaction costs associated
with selling TBA mortgages short. In addition, taking short positions results in
a form of leverage. As a result, changes in the value of an underlying fund’s
investments will have a larger effect on its share price than if it did not
engage in these transactions.
Zero
Coupon or Pay-In-Kind Securities Risk. Zero coupon
and pay-in-kind securities may be subject to greater fluctuation in value and
less liquidity in the event of adverse market conditions than comparably rated
securities paying cash interest at regular interest payment periods. Prices on
non-cash-paying instruments may be more sensitive to changes in the issuer’s
financial condition, fluctuation in interest rates and market demand/supply
imbalances than cash-paying securities with similar credit ratings, and thus may
be more speculative. Investors may purchase zero coupon and pay-in-kind
securities at a price below the amount payable at maturity. Because such
securities do not entitle the holder to any periodic payments of interest prior
to maturity, this prevents any reinvestment of interest payments at prevailing
interest rates if prevailing interest rates rise. The higher yields and interest
rates on pay-in-kind securities reflect the payment deferral and increased
credit risk associated with such instruments and that such investments may
represent a higher credit risk than coupon
loans.
Pay-in-kind securities may have a potential variability in valuations because
their continuing accruals require continuing judgments about the collectability
of the deferred payments and the value of any associated collateral. Special tax
considerations are associated with investing in certain lower-grade securities,
such as zero coupon or pay-in-kind securities.
Dollar
Roll Transactions Risk. Dollar roll
transactions occur in connection with TBA transactions and involve the risk that
the market value of the securities an underlying fund is required to purchase
may decline below the agreed upon repurchase price of those securities. When an
underlying fund uses a dollar roll transaction, it is also subject to the risk
that the other party to the agreement will not be able to perform. If the
broker/dealer to whom an underlying fund sells securities becomes insolvent, an
underlying fund’s right to purchase or repurchase securities may be restricted.
Dollar roll transactions add a form of leverage to an underlying fund’s
portfolio because an underlying fund makes a commitment to purchase a security
at a future date for an agreed upon price. Leverage may make the Fund’s returns
more volatile and increase the risk of loss. In addition, dollar roll
transactions may increase an underlying fund’s portfolio turnover rate because
they generally are rolled over every month. Increased portfolio turnover may
result in increased brokerage costs which may lower an underlying fund’s actual
return.
Investing
in Stocks Risk. Common
stock represents an ownership interest in a company. It ranks below preferred
stock and debt securities in claims for dividends and in claims for assets of
the issuer in a liquidation or bankruptcy. Common stocks may be exchange-traded
or over-the-counter securities. Over-the-counter securities may be less liquid
than exchange-traded securities.
The
value of an underlying fund’s portfolio may be affected by changes in the stock
markets. Stocks and other equity securities fluctuate in price in response to
changes to equity markets in general. Stock markets may experience significant
short-term volatility and may fall or rise sharply at times. Adverse events in
any part of the equity or fixed-income markets may have unexpected negative
effects on other market segments. Different stock markets may behave differently
from each other and U.S. stock markets may move in the opposite direction from
one or more foreign stock markets.
The
prices of individual stocks generally do not all move in the same direction at
the same time. However, individual stock prices tend to go up and down more
dramatically than those of certain other types of investments, such as bonds. A
variety of factors can negatively affect the price of a particular company’s
stock. These factors may include, but are not limited to: poor earnings reports,
a loss of customers, litigation against the company, general unfavorable
performance of the company’s sector or industry, or changes in government
regulations affecting the company or its industry. To the extent that securities
of a particular type are emphasized (for example foreign stocks, stocks of
small- or mid-sized companies, growth or value stocks, or stocks of companies in
a particular industry), fund share values may fluctuate more in response to
events affecting the market for those types of securities.
Growth
Investing Risk. Growth
companies are companies whose earnings and stock prices are expected to grow at
a faster rate than the overall market. If a growth company’s earnings or stock
price fails to increase as anticipated, or if its business plans do not produce
the expected results, the value of its securities may decline sharply. Growth
companies can be new or established companies that may be entering a growth
cycle in their business and therefore may experience greater stock price
fluctuations and risks of loss than larger, more established companies. Their
anticipated growth may come from developing new products or services or from
expanding into new or growing markets. Growth companies may be applying new
technologies, new or improved distribution methods or new business models that
could enable them to capture an important or dominant market position. They may
have a special area of expertise or the ability to take advantage of changes in
demographic or other factors in a more profitable way. Newer growth companies
generally tend to invest a large part of their earnings in research, development
or capital assets.
12 Invesco
Income Allocation Fund
Although
newer growth companies may not pay any dividends for some time, their stocks may
be valued because of their potential for price increases. Growth investing has
gone in and out of favor during past market cycles and is likely to continue to
do so. During periods when growth investing is out of favor or when markets are
unstable, it may be more difficult to sell growth company securities at an
acceptable price and the securities of growth companies may underperform the
securities of value companies or the overall stock market. Growth stocks may
also be more volatile than other securities because of investor
speculation.
Value
Investing Risk. Value
investing entails the risk that if the market does not recognize that a selected
security is undervalued, the prices of that security might not appreciate as
anticipated. A value investing approach could also lead to acquiring fewer
securities that might experience rapid price increases during times of market
advances. This could cause the investments to underperform strategies that seek
capital appreciation by employing only a growth or other non-value approach.
Value investing has also gone in and out of favor during past market cycles and
is likely to continue to do so. During periods when value investing is out of
favor or when markets are unstable, the securities of value companies may
underperform the securities of growth companies or the overall stock
market.
Equity
Linked Notes Risk. Investments
in ELNs are susceptible to the risks of their underlying securities or index,
which could include management risk, market risk and, as applicable, foreign
securities and currency risks. ELNs are also subject to certain debt securities
risks, such as interest rate and credit risks. Should the prices of the
underlying securities or index move in an unexpected manner, an underlying fund
may not achieve the anticipated benefits of an investment in an ELN, and may
realize losses, which could be significant and could include an underlying
fund's entire principal investment. An ELN investment is also subject to
counterparty risk, which is the risk that the issuer of the ELN will default or
become bankrupt and an underlying fund may not be repaid the principal amount
of, or income from, its investment. ELNs may also be less liquid than more
traditional investments and an underlying fund may be unable to sell ELNs at a
desirable time or price. In addition, the price of ELNs may not correlate with
the underlying securities, index or a fixed income investment.
Short
Position Risk. An
underlying fund will incur a loss on a short position if the price of the asset
sold short increases from the short sale price. Because an underlying fund’s
potential loss on a short position arises from increases in the value of the
asset sold short, the extent of such loss, like the price of the asset sold
short, is theoretically unlimited. Short sales are speculative transactions and
involve greater reliance on the Adviser’s ability to accurately anticipate the
future value of an asset or markets in general. Any gain on a short position is
decreased, and any loss is increased, by the amount of any payment, dividend,
interest or other transaction costs that an underlying fund may be required to
pay with respect to the asset sold short. The counterparty to a short position
or market factors, such as a sharp increase in prices, may prevent an underlying
fund from closing out a short position at a desirable time or price and may
reduce or eliminate any gain or result in a loss. In a rising market, an
underlying fund’s short positions will cause the underlying fund to underperform
the overall market and its peers that do not engage in shorting. If an
underlying fund holds both long and short positions, both positions may decline
simultaneously, in which case the short positions will not provide any buffer
(hedge) from declines in value of the underlying fund’s long positions. Certain
types of short positions involve leverage, which may exaggerate any losses,
potentially more than the actual cost of the investment, and will increase the
volatility of an underlying fund’s returns.
Dividend
Risk. As a group,
securities that pay high dividends may fall out of favor with investors and
underperform companies that do not pay high dividends. Also, changes in the
dividend policies of such companies and the capital resources available for such
companies' dividend payments may affect an underlying fund. There is the
possibility that dividend-paying companies could reduce or eliminate the payment
of dividends in the future
or an
anticipated acceleration of dividends may not occur. High-dividend stocks may
not experience high earnings growth or capital appreciation. An underlying
fund’s performance during a broad market advance could suffer because dividend
paying stocks may not experience the same capital appreciation as non-dividend
paying stocks.
Depending
upon market conditions, dividend-paying stocks that meet an underlying
fund’s investment criteria may not be widely available, or may be highly
concentrated in only a few market sectors. This may increase the volatility of
an underlying fund’s returns and may limit the ability of an underlying fund to
produce current income while remaining fully diversified. In addition, the value
of dividend-paying common stocks can decline when interest rates rise, as
fixed-income investments become more attractive to investors. Because the
potential for interest rates to rise becomes greater during a low interest rate
environment, this risk may be greater in a period of low interest
rates.
REIT
Risk/Real Estate Risk.
Investments
in real estate related instruments may be adversely affected by economic, legal,
cultural, environmental or technological factors that affect property values,
rents or occupancies. Real estate companies, including REITs or similar
structures, tend to be small- and mid-cap companies and their shares may be more
volatile and less liquid than larger companies. The value of investments in real
estate related companies may be affected by the quality of management, the
ability to repay loans, the utilization of leverage and financial covenants
related thereto, whether the company carries adequate insurance and
environmental factors.
Liquidity
Risk. An
underlying fund may be unable to sell illiquid investments at the time or price
it desires and, as a result, could lose its entire investment in such
investments. An investment may be illiquid due to a lack of trading volume in
the investment or if the investment is privately placed and not traded in any
public market or is otherwise restricted from trading. Liquid securities can
become illiquid during periods of market stress. If a significant amount of an
underlying fund’s securities become illiquid, an underlying fund may not be able
to timely pay redemption proceeds and may need to sell securities at
significantly reduced prices.
Issuer
Focus Risk. Although an
underlying fund is classified as a diversified fund, it may focus its
investments in a relatively small number of issuers. The greater an underlying
fund's exposure to any single investment or issuer, the greater the losses an
underlying fund may experience upon any single economic, market, business,
political, regulatory, or other occurrence. As a result, there may be more
fluctuation in the price of an underlying fund's shares.
Foreign
Securities Risk. The value of
an underlying fund's foreign investments may be adversely affected by political
and social instability in the home countries of the issuers of the investments,
by changes in economic or taxation policies in those countries, or by the
difficulty in enforcing obligations in those countries. Foreign investments also
involve the risk of the possible seizure, nationalization or expropriation of
the issuer or foreign deposits (in which an underlying fund could lose its
entire investments in a certain market) and the possible adoption of foreign
governmental restrictions such as exchange controls. Foreign companies generally
may be subject to less stringent regulations than U.S. companies, including
financial reporting requirements and auditing and accounting controls, and may
therefore be more susceptible to fraud or corruption. Also, there may be less
publicly available information about companies in certain foreign countries than
about U.S. companies making it more difficult for an underlying fund’s adviser
to evaluate those companies. The laws of certain countries may put limits on an
underlying fund’s ability to recover its assets held at a foreign bank if the
foreign bank, depository or issuer of a security, or any of their agents, goes
bankrupt. Trading in many foreign securities may be less liquid and more
volatile than U.S. securities due to the size of the market or other factors.
Changes in political and economic factors in one country or region could
adversely affect conditions in another country or region. Investments in foreign
securities may also expose an underlying fund to time-zone arbitrage risk. At
times, an underlying fund may emphasize
13 Invesco
Income Allocation Fund
investments
in a particular country or region and may be subject to greater risks from
adverse events that occur in that country or region. Unless an underlying fund
has hedged its foreign currency exposure, foreign securities risk also involves
the risk of negative foreign currency rate fluctuations, which may cause the
value of securities denominated in such foreign currency (or other instruments
through which an underlying fund has exposure to foreign currencies) to decline
in value. Currency exchange rates may fluctuate significantly over short periods
of time. Currency hedging strategies, if used, are not always successful. For
instance, currency forward contracts, if used, could reduce performance if there
are unanticipated changes in currency exchange rates.
Emerging
Market Securities Risk. Emerging
markets (also referred to as developing markets) are generally subject to
greater market volatility, political, social and economic instability,
uncertainty regarding the existence of trading markets and more governmental
limitations on foreign investment than more developed markets. In addition,
companies operating in emerging markets may have greater concentration in a few
industries resulting in greater vulnerability to regional and global trade
conditions and also may be subject to lower trading volume and greater price
fluctuations than companies in more developed markets. Unexpected market
closures may also affect investments in emerging markets. Settlement procedures
may differ from those of more established securities markets, and settlement
delays may result in the inability to invest assets or dispose of portfolio
securities in a timely manner. As a result there could be subsequent declines in
value of the portfolio security, a decrease in the level of liquidity of the
portfolio, or, if there is a contract to sell the security, a possible liability
to the purchaser.
Such
countries’ economies may be more dependent on relatively few industries or
investors that may be highly vulnerable to local and global changes. Emerging
market countries may also have higher rates of inflation or deflation and more
rapid and extreme fluctuations in inflation rates and greater sensitivity to
interest rate changes. Further, companies in emerging market countries generally
may be subject to less stringent regulatory, disclosure, financial reporting,
accounting, auditing and recordkeeping standards than companies in more
developed countries and, as a result, the nature and quality of such information
may vary. Information about such companies may be less available and reliable
and, therefore, the ability to conduct adequate due diligence in emerging
markets may be limited which can impede an underlying fund’s ability to evaluate
such companies. In addition, certain emerging market countries may impose
material limitations on Public Company Accounting Oversight Board (PCAOB)
inspection, investigation and enforcement capabilities, which can hinder the
PCAOB’s ability to engage in independent oversight or inspection of accounting
firms located in or operating in certain emerging markets. There is no guarantee
that the quality of financial reporting or the audits conducted by audit firms
of emerging market issuers meet PCAOB standards.
Securities
law in many emerging market countries is relatively new and unsettled.
Therefore, laws regarding foreign investment in emerging market securities,
securities regulation, title to securities, and shareholder rights may change
quickly and unpredictably. Emerging market countries also may have less
developed legal systems allowing for enforcement of private property rights
and/or redress for injuries to private property (including bankruptcy,
confiscatory taxation, expropriation, nationalization of a company’s assets,
restrictions on foreign ownership of local companies, restrictions on
withdrawing assets from the country, protectionist measures and practices such
as share blocking). Certain governments may require approval for the
repatriation of investment income, capital or the proceeds of sales of
securities by foreign investors. The ability to bring and enforce actions in
emerging market countries, or to obtain information needed to pursue or enforce
such actions, may be limited and shareholder claims may be difficult or
impossible to pursue. In addition, the taxation systems at the federal, regional
and local levels in emerging market countries may be less transparent and
inconsistently enforced, and subject to sudden change.
Emerging
market countries may have a higher degree of corruption and fraud than
developed market countries, as well as counterparties and financial institutions
with less financial sophistication, creditworthiness and/or resources. The
governments in some emerging market countries have been engaged in programs to
sell all or part of their interests in government-owned or controlled
enterprises. However, in certain emerging market countries, the ability of
foreign entities to participate in privatization programs may be limited by
local law. There can be no assurance that privatization programs will be
successful.
Other
risks of investing in emerging market securities may include additional
transaction costs, delays in settlement procedures, unexpected market closures,
and lack of timely information.
Depositary
Receipts Risk.
Depositary
receipts involve many of the same risks as those associated with direct
investment in foreign securities. In addition, the underlying issuers of certain
depositary receipts, particularly unsponsored or unregistered depositary
receipts, are under no obligation to distribute shareholder communications to
the holders of such receipts or to pass through to them any voting rights with
respect to the deposited securities. An underlying fund may therefore receive
less timely information or have less control than if it invested directly in the
foreign issuer.
Preferred
Securities Risk. Preferred
securities are subject to issuer-specific and market risks applicable generally
to equity securities. Preferred stock has a set dividend rate and ranks ahead of
common stocks and behind debt securities in claims for dividends and for assets
of the issuer in a liquidation or bankruptcy. Preferred securities also may be
subordinated to bonds or other debt instruments in an issuer’s capital
structure, subjecting them to a greater risk of non-payment than these more
senior securities. For this reason, the value of preferred securities will
usually react more strongly than bonds and other debt securities to actual or
perceived changes in the company’s financial condition or prospects. Preferred
securities may be less liquid than many other securities, such as common stocks,
and generally offer no voting rights with respect to the issuer.
Small-
and Mid-Capitalization Companies Risk. Investing
in securities of small- and mid-capitalization companies involves greater risk
than customarily is associated with investing in larger, more established
companies. Stocks of small- and mid-capitalization companies tend to be more
vulnerable to changing market conditions, may have little or no operating
history or track record of success, and may have more limited product lines and
markets, less experienced management and fewer financial resources than larger
companies. These companies’ securities may be more volatile and less liquid than
those of more established companies. They may be more sensitive to changes in a
company’s earnings expectations and may experience more abrupt and erratic price
movements. Smaller companies’ securities often trade in lower volumes and in
many instances, are traded over-the-counter or on a regional securities
exchange, where the frequency and volume of trading is substantially less than
is typical for securities of larger companies traded on national securities
exchanges. Therefore, the securities of smaller companies may be subject to
wider price fluctuations and it might be harder for an underlying fund to
dispose of its holdings at an acceptable price when it wants to sell them. In
addition, investors might seek to trade Fund shares based on their knowledge or
understanding of the value of smaller company securities (this is sometimes
referred to as “price arbitrage”), which could interfere with the efficient
management of an underlying fund. Since small- and mid-cap companies typically
reinvest a high proportion of their earnings in their business, they may not pay
dividends for some time, particularly if they are newer companies. It may take a
substantial period of time to realize a gain on an investment in a small- or
mid-cap company, if any gain is realized at all. The relative sizes of companies
may change over time as the securities market changes, and an underlying fund is
not required to sell the securities of companies whose market capitalizations
have grown or decreased due to market fluctuations.
14 Invesco
Income Allocation Fund
Alternative
Investment Strategies Risk. An
underlying fund utilizes alternative investment strategies, which are strategies
that the portfolio manager expects to result in investment performance that does
not correlate with the performance of traditional asset classes, such as equity
and fixed-income investments. An underlying fund also seeks to utilize a diverse
mix of alternative investment strategies, in the hope that individual strategies
yield low performance correlation to other alternative investment strategies
used by an underlying fund. However, alternative investments may be more
volatile or illiquid, particularly during periods of market instability, and an
underlying fund cannot guarantee that diverse alternative investment strategies
will yield uncorrelated performance under all market conditions. In addition,
the particular mix of alternative investments in an underlying fund’s portfolio
may not be sufficiently diversified. An underlying fund is subject to the risk
that its alternative investments may undergo a correlation shift, resulting in
returns that are correlated with the broader market and/or with an underlying
fund’s other alternative investments.
Quantitative
Models Risk.
Quantitative models are based upon many factors that measure individual
securities relative to each other. Quantitative models may be highly reliant on
the gathering, cleaning, culling and analysis of large amounts of data from
third parties and other external sources. Any errors or imperfections in the
factors, or the data on which measurements of those factors are based, could
adversely affect the use of the quantitative models. The factors used in models
may not identify securities that perform well in the future, and the securities
selected may perform differently from the market as a whole or from their
expected performance.
When-Issued,
Delayed Delivery and Forward Commitment Risks. When-issued
and delayed delivery transactions are subject to market risk as the value or
yield of a security at delivery may be more or less than the purchase price or
the yield generally available on securities when delivery occurs. In addition,
an underlying fund is subject to counterparty risk because it relies on the
buyer or seller, as the case may be, to consummate the transaction, and failure
by the counterparty to complete the transaction may result in an underlying fund
missing the opportunity of obtaining a price or yield considered to be
advantageous. These transactions have a leveraging effect on an underlying fund
because an underlying fund commits to purchase securities that it does not have
to pay for until a later date. These investments therefore increase an
underlying fund’s overall investment exposure and, as a result, its volatility.
Typically, no income accrues on securities an underlying fund has committed to
purchase prior to the time delivery of the securities is made.
Infrastructure-Related
Companies Risk. An
underlying fund will concentrate its investments in the infrastructure industry.
Infrastructure-related companies are subject to a variety of factors that may
adversely affect their business or operations, including costs associated with
environmental, governmental and other regulations, high interest costs in
connection with capital construction programs, high leverage, the effects of
economic slowdowns, surplus capacity, increased competition, fluctuations of
fuel prices, the effects of energy conservation policies, unfavorable tax laws
or accounting policies, and other factors. Infrastructure-related companies are
also affected by environmental damage due to a company’s operations or an
accident, difficulty in raising capital in adequate amounts on reasonable terms
in periods of high inflation and unsettled capital markets, increased
susceptibility to terrorist acts or political actions, and general changes in
market sentiment towards infrastructure assets.
MLP
Risk. An
underlying fund invests in securities of MLPs, which are subject to the
following risks:
■
Limited
Partner Risk. An MLP is a
public limited partnership or a limited liability company taxed as a partnership
under the Internal Revenue Code of 1986, as amended (the Code). Although the
characteristics of MLPs closely resemble a traditional limited partnership, a
major difference is that MLPs may trade on a public exchange or in the
over-the-counter market. The risks of investing in an MLP are similar to those
of investing in a partnership, including
more flexible
governance structures, which could result in less protection for investors than
investments in a corporation. Investors in an MLP normally would not be liable
for the debts of the MLP beyond the amount that the investor has contributed but
investors may not be shielded to the same extent that a shareholder of a
corporation would be. In certain circumstances, creditors of an MLP would have
the right to seek return of capital distributed to a limited partner, which
right would continue after an investor sold its investment in the MLP. In
addition, MLP distributions may be reduced by fees and other expenses incurred
by the MLP.
■
Equity
Securities Risk. Investment
in MLPs involves risks that differ from investments in common stock, including
risks related to limited control and limited rights to vote on matters affecting
the MLP, risks related to potential conflicts of interest between the MLP and
the MLP’s general partner, dilution risks and cash flow risks. MLP common units
can be affected by macro-economic and other factors affecting the stock market
in general, expectations of interest rates, investor sentiment towards MLPs,
changes in a particular issuer’s financial condition, or unfavorable or
unanticipated poor performance of a particular issuer. Prices of common units of
individual MLPs and other equity securities also can be affected by fundamentals
unique to the partnership or company, including earnings power and coverage
ratios. In the event of liquidation, common unit holders are intended to have a
preference to the remaining assets of the issuer over holders of subordinated
units. Subordinated units generally do not provide arrearage rights.
■
Liquidity
Risk. The ability
to trade on a public exchange or in the over-the-counter market provides a
certain amount of liquidity not found in many limited partnership investments.
However, MLP interests may be less liquid or trade less frequently than
conventional publicly traded securities, and therefore more difficult to trade
at desirable times and/or prices. Where certain MLP securities experience
limited trading volumes, the prices of such MLPs may display abrupt or erratic
movements at times and it may be more difficult for an underlying fund to buy
and sell significant amounts of such securities without an unfavorable impact on
prevailing market prices. As a result, these securities may be difficult to
dispose of at a fair price at the times when the sub-adviser believes it is
desirable to do so. This may affect adversely an underlying fund’s ability to
make dividend distributions.
■
Interest
Rate Risk. MLPs
generally are considered interest-rate sensitive investments and, accordingly,
during periods of interest rate volatility these investments may not provide
attractive returns.
■
General
Partner Risk. The holder
of the general partner or managing member interest can be liable in certain
circumstances for amounts greater than the amount of the holder’s investment in
the general partner or managing member.
■
MLP
Tax Risk. MLPs taxed
as partnerships do not pay U.S. federal income tax at the partnership level,
subject to the application of certain partnership audit rules. Rather, each
partner is allocated a share of the partnership’s income, gains, losses,
deductions and expenses. A change in current tax law, or a change in the
underlying business mix of a given MLP, could result in an MLP being classified
as a corporation for U.S. federal income tax purposes, which would result in
such MLP being required to pay U.S. federal income tax on its taxable income.
This classification would have the effect of reducing the amount of cash
available for distribution by the MLP. Thus, if any of the MLPs owned by an
underlying fund were treated as a corporation for U.S. federal income tax
purposes, it could result in a reduction of the value of an underlying fund’s
investment, and consequently your investment in an underlying fund and lower
income. MLPs taxed as partnerships file a partnership tax return for U.S.
federal, state and local income tax purposes and communicate to each investor in
such MLP the investor’s allocable share of the
15 Invesco
Income Allocation Fund
MLP’s income,
gains, losses, deductions and expenses via a “Schedule K-1.” Each year, an
underlying fund will send you an annual tax statement (Form 1099) to assist you
in completing your federal, state and local tax returns. An MLP might need to
amend its partnership tax return and, in turn, send amended Schedules K-1 to
investors in the MLP, such as an underlying fund. When necessary, an underlying
fund will send you a corrected Form 1099 to reflect Schedule K-1 information
reclassified by an MLP, which could, in turn, require you to amend your federal,
state or local tax returns.
Additionally,
if an underlying fund were to invest more than 25% of its total assets
in MLPs that are taxed as partnerships this could cause an underlying fund to
lose its status as a regulated investment company under Subchapter M of the
Code.
Exchange-Traded
Notes Risk.
Exchange-traded notes are subject to the credit risk of the issuer, and the
value of the exchange-traded note may drop due to a downgrade in the issuer's
credit rating, despite the underlying market benchmark or assets remaining
unchanged. The value of an exchange-traded note may also be influenced by time
to maturity, level of supply and demand for the exchange-traded note, volatility
and lack of liquidity in the underlying market, changes in the applicable
interest rates, and economic, legal, political, or geographic events that affect
the referenced underlying market or assets. Exchange-traded notes are also
subject to the risk that the other party to the contract will not fulfill its
contractual obligations, which may cause losses or additional costs to an
underlying fund. When an underlying fund invests in exchange-traded notes it
will bear its proportionate share of any fees and expenses borne by the
exchange-traded note. For certain exchange-traded notes, there may be
restrictions on an underlying fund’s right to redeem its investment, which is
meant to be held until maturity.
Derivatives
Risk. A derivative
is an instrument whose value depends largely on (and is derived from) the value
of an underlying security, currency, commodity, interest rate, index or other
asset (each referred to as an underlying asset). In addition to risks relating
to the underlying assets, the use of derivatives may include other, possibly
greater, risks, which are described below. These risks are greater for certain
underlying funds than mutual funds that do not use derivative instruments or
that use derivative instruments to a lesser extent than certain underlying funds
to implement their investment strategies.
■
Counterparty
Risk. Certain
derivatives do not trade on an established exchange (referred to as
over-the-counter (OTC) derivatives) and are simply financial contracts between
an underlying fund and a counterparty. When an underlying fund is owed money on
an OTC derivative, an underlying fund is dependent on the counterparty to pay
or, in some cases, deliver the underlying asset, unless an underlying fund can
otherwise sell its derivative contract to a third party prior to its expiration.
Many counterparties are financial institutions such as banks and broker-dealers
and their creditworthiness (and ability to pay or perform) may be negatively
impacted by factors affecting financial institutions generally. In addition, in
the event that a counterparty becomes bankrupt or insolvent, an underlying
fund’s ability to recover the collateral that an underlying fund has on deposit
with the counterparty could be delayed or impaired. For derivatives traded on a
centralized exchange, an underlying fund generally is dependent upon the
solvency of the relevant exchange clearing house (which acts as a guarantor for
each contractual obligation under such derivatives) for payment on derivative
instruments for which an underlying fund is owed money.
■
Leverage
Risk. Many
derivatives do not require a payment up front equal to the economic exposure
created by holding a position in the derivative, which creates a form of
leverage. As a result, an adverse change in the value of the underlying asset
could result in an underlying fund sustaining a loss that is substantially
greater than the amount invested in the derivative or the anticipated value of
the
underlying
asset. In addition, some derivatives have the potential for unlimited loss,
regardless of the size of an underlying fund’s initial investment. Leverage may
therefore make an underlying fund’s returns more volatile and increase the risk
of loss. In certain market conditions, losses on derivative instruments can grow
larger while the value of an underlying fund’s other assets fall, resulting in
an underlying fund’s derivative positions becoming a larger percentage of an
underlying fund’s investments.
■
Liquidity
Risk. There is a
smaller pool of buyers and sellers for certain derivatives, particularly OTC
derivatives, than more traditional investments such as stocks. These buyers and
sellers are often financial institutions that may be unable or unwilling to buy
or sell derivatives during times of financial or market stress. Derivative
instruments may therefore be less liquid than more traditional investments and
an underlying fund may be unable to sell or exit its derivative positions at a
desirable time or price. This risk may be more acute under adverse market
conditions, during which an underlying fund may be most in need of liquidating
its derivative positions. To the extent that an underlying fund is unable to
exit a derivative position because of market illiquidity, an underlying fund may
not be able to prevent further losses of value in its derivatives holdings and
the liquidity of an underlying fund and its ability to meet redemption requests
may be impaired to the extent that a substantial portion of an underlying fund’s
otherwise liquid assets must be used as margin. Another consequence of
illiquidity is that an underlying fund may be required to hold a derivative
instrument to maturity and take or make delivery of the underlying asset that an
underlying fund’s adviser would otherwise avoid.
■
Regulatory
Risk. Changes in
government regulation of derivative instruments could affect the character,
timing and amount of the Fund’s taxable income or gains, and may limit or
prevent the Fund from using certain types of derivative instruments as a part of
its investment strategy, which could make the investment strategy more costly to
implement or require the Fund to change its investment
strategy.
■
Other
Risks. Compared to
other types of investments, derivatives may be harder to value and may also be
less tax efficient, as described under the “Taxes” section of the prospectus. In
addition, changes in government regulation of derivative instruments could
affect the character, timing and amount of an underlying fund’s taxable income
or gains, and may limit or prevent an underlying fund from using certain types
of derivative instruments as a part of its investment strategy, which could make
the investment strategy more costly to implement or require an underlying fund
to change its investment strategy. Derivatives strategies may not always
be successful. For example, to the extent that an underlying fund uses
derivatives for hedging or to gain or limit exposure to a particular market or
market segment, there may be imperfect correlation between the value of the
derivative instrument and the value of the instrument being hedged or the
relevant market or market segment, in which case an underlying fund may not
realize the intended benefits. There is also the risk that during adverse market
conditions, an instrument which would usually operate as a hedge provides no
hedging benefits at all. An underlying fund’s use of derivatives may be limited
by the requirements for taxation of an underlying fund as a regulated investment
company.
Sector
Focus Risk. An
underlying fund may from time to time have a significant amount of its assets
invested in one market sector or group of related industries. The prices of
stocks of issuers in a sector or group of industries may go up and down in
response to changes in economic conditions, government regulations, availability
of basic resources or supplies, or other events that affect that industry or
sector more than others.
In this
event, an underlying fund’s performance will depend to a greater extent on the
overall condition of the sector or group of industries and there
16 Invesco
Income Allocation Fund
is increased
risk that an underlying fund will lose significant value if conditions adversely
affect that sector or group of industries. Information about certain underlying
funds' investments in a particular market sector or group of industries is
available in their annual and semi-annual reports to shareholders and in their
reports on Form N-PORT filed with the SEC.
Geographic
Focus Risk. An
underlying fund may from time to time have a substantial amount of its assets
invested in securities of issuers located in a single country or a limited
number of countries. If an underlying fund focuses its investments in this
manner, adverse economic, political or social conditions in those countries may
have a significant negative impact on an underlying fund’s investment
performance. This risk is heightened if an underlying fund focuses its
investments in emerging market countries or developed countries prone to periods
of instability. The Schedule of Investments included in certain underlying funds
annual and semi-annual reports identifies the countries in which certain
underlying funds had invested and the level of investment, as of the date of the
reports.
Industry
Concentration Risk. In following
its methodology, the Underlying Index from time to time may be concentrated to a
significant degree in securities of issuers operating in a single industry or
group of industries. To the extent that the Underlying Index concentrates in the
securities of issuers in a particular industry or group of industries, an
underlying fund will also concentrate its investments to approximately the same
extent. By concentrating its investments in an industry or group of industries,
an underlying fund may face more risks than if it were diversified broadly over
numerous industries or groups of industries. Such industry-based risks, any of
which may adversely affect the companies in which an underlying fund invests,
may include, but are not limited to legislative or regulatory changes, adverse
market conditions and/or increased competition within the industry or group of
industries. In addition, at times, such industry or group of industries may be
out of favor and underperform other industries, groups of industries or the
market as a whole. Information about an underlying fund’s exposure to a
particular industry or group of industries will be available in an underlying
fund’s Annual and Semi-Annual Reports to Shareholders, as well as on required
forms filed with the SEC.
Issuer-Specific
Changes Risk. The
performance of an an underlying fund depends on the performance of individual
securities to which an an underlying fund has exposure. The value of an
individual security or particular type of security may be more volatile than the
market as a whole and may perform worse than the market as a whole, causing the
value of its securities to decline. Poor performance may be caused by poor
management decisions, competitive pressures, changes in technology, expiration
of patent protection, disruptions in supply, labor problems or shortages,
corporate restructurings, fraudulent disclosures or other factors. Issuers may,
in times of distress or at their own discretion, decide to reduce or eliminate
dividends, which may also cause their stock prices to decline.
Borrowing
Risk. Borrowing
money to buy securities exposes an underlying fund to leverage because an
underlying fund seeks to achieve a return on a capital base larger than the
assets that shareholders have contributed to an underlying fund. Borrowing will
cause an underlying fund’s share price to be more volatile because leverage will
exaggerate the effect of any increase or decrease in the value of an underlying
fund’s portfolio securities. An underlying fund may also be required to
liquidate positions when it may not be advantageous to do so in order to repay
borrowed money when due. In addition, an underlying fund will incur interest
expenses and other fees on borrowed money. There can be no assurance that an
underlying fund’s borrowing strategy will enhance and not reduce the underlying
fund’s returns.
Non-Diversification
Risk. An
underlying fund is non-diversified, meaning it can invest a greater portion of
its assets in the obligations or securities of a small number of issuers or any
single issuer than a diversified fund can. Because a large percentage of an
underlying fund’s assets may be invested in a limited number of issuers, a
change in the value
of one or a
few issuers’ securities will affect the value of an underlying fund more than
would occur in a diversified fund.
Financial
Markets Regulatory Risk. Policy
changes by the U.S. government or its regulatory agencies and other governmental
actions and political events within the U.S. and abroad, changes to the monetary
policy by the Federal Reserve or other regulatory actions, the U.S. government’s
inability at times to agree on a long-term budget and deficit reduction plan or
other legislation aimed at addressing financial or economic conditions, the
threat of a federal government shutdown, and threats not to increase or suspend
the federal government’s debt limit, may affect investor and consumer
confidence, increase volatility in the financial markets, perhaps suddenly and
to a significant degree, result in higher interest rates, and even raise
concerns about the U.S. government’s credit rating and ability to service its
debt. Such changes and events may adversely impact an underlying fund, including
by adversely impacting an underlying fund’s operations, universe of potential
investment options, and return potential.
Active
Trading Risk. Active
trading of an underlying fund’s portfolio securities may result in high
brokerage costs, which may lower an underlying fund’s actual return. Active
trading also may increase the proportion of an underlying fund’s gains that are
short term, which are taxed at a higher rate than long term gains.
Management
Risk. The Fund is
actively managed and depends heavily on its Adviser’s judgment about markets,
interest rates or the attractiveness, relative values, liquidity, or potential
appreciation of particular investments made for the Fund’s portfolio. Similarly,
certain underlying funds are actively managed and depend heavily on their
advisers’ judgments about markets, interest rates or the attractiveness,
relative values, liquidity, or potential appreciation of particular investments
made for their portfolios. The Fund and certain underlying funds could
experience losses if these judgments prove to be incorrect. There can be no
guarantee that the Fund’s Adviser’s and certain underlying funds’ advisers'
investment techniques or investment decisions will produce the desired results.
Because the investment process of the Fund relies heavily on its asset
allocation process, market movements that are counter to the portfolio managers’
expectations may have a significant adverse effect on the Fund’s net asset
value. Similarly, because the investment processes of certain underlying funds
rely heavily on their security selection processes, market movements that are
counter to the portfolio managers’ expectations may have a significant adverse
effect on certain underlying funds’ net asset values. Additionally, legislative,
regulatory, or tax developments may adversely affect management of the Fund and
underlying funds and, therefore, their abilities to achieve their investment
objectives.
Portfolio
Holdings
A description
of Fund policies and procedures with respect to the disclosure of Fund portfolio
holdings is available in the SAI, which is available at
www.invesco.com/us.
Fund Management
The
Adviser(s)
Invesco
serves as the Fund’s investment adviser. The Adviser manages the investment
operations of the Fund as well as other investment portfolios that encompass a
broad range of investment objectives, and has agreed to perform or arrange for
the performance of the Fund’s day-to-day management. The Adviser is located at
1331 Spring Street, N.W., Suite 2500, Atlanta, Georgia 30309. The Adviser, as
successor in interest to multiple investment advisers, has been an investment
adviser since 1976.
Sub-Advisers. Invesco has
entered into one or more Sub-Advisory Agreements with certain affiliates to
serve as sub-advisers to the Fund (the Sub-Advisers). Invesco may appoint the
Sub-Advisers from time to time to provide discretionary investment management
services, investment advice, and/or order execution services to the Fund. The
Sub-Advisers and the Sub-Advisory Agreements are described in the
SAI.
17 Invesco
Income Allocation Fund
Exclusion
of Adviser from Commodity Pool Operator Definition
With respect
to the Fund, the Adviser has claimed an exclusion from the definition of
“commodity pool operator” (CPO) under the Commodity Exchange Act (CEA) and the
rules of the Commodity Futures Trading Commission (CFTC) and, therefore, is not
subject to CFTC registration or regulation as a CPO. In addition, the Adviser is
relying upon a related exclusion from the definition of “commodity trading
advisor” (CTA) under the CEA and the rules of the CFTC with respect to the
Fund.
The
terms of the CPO exclusion require the Fund, among other things, to adhere to
certain limits on its investments in “commodity interests.” Commodity interests
include commodity futures, commodity options and swaps, which in turn include
non-deliverable forwards. The Fund is permitted to invest in these instruments
as further described in the Fund’s SAI. However, the Fund is not intended as a
vehicle for trading in the commodity futures, commodity options or swaps
markets. The CFTC has neither reviewed nor approved the Adviser’s reliance on
these exclusions, or the Fund, its investment strategies or this
prospectus.
Adviser
Compensation
The Adviser
does not receive a management fee from the Fund.
A
discussion regarding the basis for the Board’s approval of the investment
advisory agreement and investment sub-advisory agreements of the Fund is
available in the Fund’s most recent annual or semi-annual report to
shareholders.
Portfolio
Managers
The following
individuals are jointly and primarily responsible for determining the asset
class allocation, underlying fund selections and target weightings for the
Fund:
■
Jeffrey
Bennett, CFA, Portfolio Manager, who has been responsible for the Fund since
2020 and has been associated with Invesco and/or its affiliates since 2019. From
2016 to 2019, he was associated with OppenheimerFunds, a global asset management
firm.
■
Alessio de
Longis, CFA, Portfolio Manager, who has been responsible for the Fund since 2023
and has been associated with Invesco and/or its affiliates since 2019. Prior to
joining Invesco, Mr. de Longis was associated with OppenheimerFunds, a global
asset management firm, since 2004.
The
portfolio managers are assisted by investment professionals from the Invesco
Investment Solutions Team. Members of the team may change from time to
time.
The
underlying funds are managed by portfolio managers.
More
information on the Fund's portfolio managers and the portfolio managers
managing the affiliated underlying funds may be found at www.invesco.com/us. The
website is not part of this prospectus.
The
Fund's SAI provides additional information about the portfolio managers'
investments in the Fund, a description of the compensation structure and
information regarding other accounts managed.
Other Information
Sales
Charges
Purchases of
Class A shares of the Fund are subject to the maximum 5.50% initial sales charge
as listed under the heading “Category VI Initial Sales Charges” in the
“Shareholder Account Information—Initial Sales Charges (Class A Shares Only)”
section of the prospectus. Purchases of Class C shares are subject to a
contingent deferred sales charge (CDSC) if you sell Class C shares within one
year of purchase; however, the CDSC shall not apply to the purchases of Class C
shares where the selling broker-dealer was not paid a commission at the time of
purchase. For more information on CDSCs, see the “Shareholder Account
Information—Contingent Deferred Sales Charges (CDSCs)” section of this
prospectus.
Dividends
and Distributions
The Fund
expects, based on its investment objective and strategies, that its
distributions, if any, will consist of ordinary income, capital gains, or some
combination of both.
Dividends
The Fund
generally declares and pays dividends from net investment income, if any,
monthly.
Capital
Gains Distributions
The Fund
generally distributes long-term and short-term capital gains (net of any
available capital loss carryovers), if any, at least annually. Capital gains
distributions may vary considerably from year to year as a result of
the Fund's normal investment activities and cash flows. During a time of
economic volatility, the Fund may experience capital losses and unrealized
depreciation in value of investments, the effect of which may be to reduce or
eliminate capital gains distributions for a period of time. Even though
the Fund may experience a current year loss, it may nonetheless distribute
prior year capital gains.
18 Invesco
Income Allocation Fund
Financial Highlights
The financial
highlights show the Fund’s financial history for the past five fiscal years or,
if shorter, the period of operations of the Fund or any of its share classes.
The financial highlights table is intended to help you understand the Fund’s
financial performance. Certain information reflects financial results for a
single Fund share.
The
total returns in the table represent the rate that an investor would
have earned
(or lost) on an investment in the Fund (assuming reinvestment of all dividends
and distributions).
This
information has been audited by PricewaterhouseCoopers LLP, an independent
registered public accounting firm, whose report, along with the Fund’s financial
statements, is included in the Fund’s annual report, which is available upon
request.
|
|
Net
asset
value,
beginning
of
period |
Net
investment
income(a)
|
Net
gains
(losses)
on
securities
(both
realized
and
unrealized) |
Total
from
investment
operations |
Dividends
from
net
investment
income |
Distributions
from
net
realized
gains |
Total
distributions |
Net
asset
value,
end
of
period |
Total
return(b)
|
Net
assets,
end
of period
(000's
omitted) |
Ratio
of
expenses
to
average
net
assets
with
fee waivers
and/or expenses
absorbed(c)
|
Ratio
of
expenses
to
average net
assets
without
fee
waivers
and/or expenses
absorbed |
Ratio
of net
investment
income
to
average
net
assets |
Portfolio
turnover
(d)
|
|
Class
A | ||||||||||||||
|
Year
ended 12/31/23 |
$10.10 |
$0.45 |
$0.25 |
$0.70 |
$(0.42
) |
$— |
$(0.42
) |
$10.38 |
7.14
% |
$336,482 |
0.43
% |
0.43
% |
4.41
% |
41
% |
|
Year
ended 12/31/22 |
11.84 |
0.35 |
(1.73
) |
(1.38
) |
(0.36
) |
— |
(0.36
) |
10.10 |
(11.78
) |
366,254 |
0.37 |
0.43 |
3.25 |
30 |
|
Year
ended 12/31/21 |
11.37 |
0.34 |
0.51 |
0.85 |
(0.38
) |
— |
(0.38
) |
11.84 |
7.56 |
458,085 |
0.25 |
0.42 |
2.90 |
16 |
|
Year
ended 12/31/20 |
11.60 |
0.40 |
(0.17
) |
0.23 |
(0.46
) |
(0.00
) |
(0.46
) |
11.37 |
2.33 |
414,703 |
0.25 |
0.43 |
3.65 |
66 |
|
Year
ended 12/31/19 |
10.76 |
0.49 |
1.12 |
1.61 |
(0.53
) |
(0.24
) |
(0.77
) |
11.60 |
15.19 |
434,337 |
0.25 |
0.44 |
4.28 |
14 |
|
| ||||||||||||||
|
Class
C | ||||||||||||||
|
Year
ended 12/31/23 |
10.11 |
0.37 |
0.27 |
0.64 |
(0.35
) |
— |
(0.35
) |
10.40 |
6.43 |
20,704 |
1.18 |
1.18 |
3.66 |
41 |
|
Year
ended 12/31/22 |
11.85 |
0.27 |
(1.73
) |
(1.46
) |
(0.28
) |
— |
(0.28
) |
10.11 |
(12.43
) |
29,588 |
1.12 |
1.18 |
2.50 |
30 |
|
Year
ended 12/31/21 |
11.38 |
0.25 |
0.51 |
0.76 |
(0.29
) |
— |
(0.29
) |
11.85 |
6.76 |
46,368 |
1.00 |
1.17 |
2.15 |
16 |
|
Year
ended 12/31/20 |
11.61 |
0.31 |
(0.16
) |
0.15 |
(0.38
) |
(0.00
) |
(0.38
) |
11.38 |
1.56 |
57,434 |
1.00 |
1.18 |
2.90 |
66 |
|
Year
ended 12/31/19 |
10.78 |
0.41 |
1.10 |
1.51 |
(0.44
) |
(0.24
) |
(0.68
) |
11.61 |
14.22 |
78,374 |
1.00 |
1.19 |
3.53 |
14 |
|
| ||||||||||||||
|
Class
R | ||||||||||||||
|
Year
ended 12/31/23 |
10.11 |
0.42 |
0.26 |
0.68 |
(0.40
) |
— |
(0.40
) |
10.39 |
6.86 |
3,693 |
0.68 |
0.68 |
4.16 |
41 |
|
Year
ended 12/31/22 |
11.84 |
0.32 |
(1.72
) |
(1.40
) |
(0.33
) |
— |
(0.33
) |
10.11 |
(11.91
) |
3,470 |
0.62 |
0.68 |
3.00 |
30 |
|
Year
ended 12/31/21 |
11.38 |
0.31 |
0.50 |
0.81 |
(0.35
) |
— |
(0.35
) |
11.84 |
7.20 |
5,115 |
0.50 |
0.67 |
2.65 |
16 |
|
Year
ended 12/31/20 |
11.60 |
0.37 |
(0.16
) |
0.21 |
(0.43
) |
(0.00
) |
(0.43
) |
11.38 |
2.17 |
4,975 |
0.50 |
0.68 |
3.40 |
66 |
|
Year
ended 12/31/19 |
10.77 |
0.46 |
1.11 |
1.57 |
(0.50
) |
(0.24
) |
(0.74
) |
11.60 |
14.80 |
6,847 |
0.50 |
0.69 |
4.03 |
14 |
|
| ||||||||||||||
|
Class
Y | ||||||||||||||
|
Year
ended 12/31/23 |
10.10 |
0.47 |
0.26 |
0.73 |
(0.45
) |
— |
(0.45
) |
10.38 |
7.41 |
20,642 |
0.18 |
0.18 |
4.66 |
41 |
|
Year
ended 12/31/22 |
11.83 |
0.38 |
(1.73
) |
(1.35
) |
(0.38
) |
— |
(0.38
) |
10.10 |
(11.48
) |
28,227 |
0.12 |
0.18 |
3.50 |
30 |
|
Year
ended 12/31/21 |
11.37 |
0.37 |
0.50 |
0.87 |
(0.41
) |
— |
(0.41
) |
11.83 |
7.74 |
48,311 |
0.00 |
0.17 |
3.15 |
16 |
|
Year
ended 12/31/20 |
11.60 |
0.42 |
(0.16
) |
0.26 |
(0.49
) |
(0.00
) |
(0.49
) |
11.37 |
2.59 |
49,435 |
0.00 |
0.18 |
3.90 |
66 |
|
Year
ended 12/31/19 |
10.76 |
0.52 |
1.11 |
1.63 |
(0.55
) |
(0.24
) |
(0.79
) |
11.60 |
15.48 |
70,139 |
0.00 |
0.19 |
4.53 |
14 |
|
| ||||||||||||||
|
Class
R5 | ||||||||||||||
|
Year
ended 12/31/23 |
10.09 |
0.48 |
0.26 |
0.74 |
(0.45
) |
— |
(0.45
) |
10.38 |
7.53 |
65 |
0.16 |
0.16 |
4.68 |
41 |
|
Year
ended 12/31/22 |
11.83 |
0.38 |
(1.73
) |
(1.35
) |
(0.39
) |
— |
(0.39
) |
10.09 |
(11.55
) |
93 |
0.11 |
0.16 |
3.51 |
30 |
|
Year
ended 12/31/21 |
11.37 |
0.37 |
0.50 |
0.87 |
(0.41
) |
— |
(0.41
) |
11.83 |
7.74 |
136 |
0.00 |
0.16 |
3.15 |
16 |
|
Year
ended 12/31/20 |
11.60 |
0.42 |
(0.16
) |
0.26 |
(0.49
) |
(0.00
) |
(0.49
) |
11.37 |
2.59 |
367 |
0.00 |
0.16 |
3.90 |
66 |
|
Year
ended 12/31/19 |
10.77 |
0.52 |
1.10 |
1.62 |
(0.55
) |
(0.24
) |
(0.79
) |
11.60 |
15.37 |
1,712 |
0.00 |
0.16 |
4.53 |
14 |
|
| ||||||||||||||
|
Class
R6 | ||||||||||||||
|
Year
ended 12/31/23 |
10.09 |
0.49 |
0.26 |
0.75 |
(0.46
) |
— |
(0.46
) |
10.38 |
7.60 |
9 |
0.10 |
0.10 |
4.74 |
41 |
|
Year
ended 12/31/22 |
11.83 |
0.38 |
(1.73
) |
(1.35
) |
(0.39
) |
— |
(0.39
) |
10.09 |
(11.51
) |
337 |
0.06 |
0.09 |
3.56 |
30 |
|
Year
ended 12/31/21 |
11.36 |
0.37 |
0.51 |
0.88 |
(0.41
) |
— |
(0.41
) |
11.83 |
7.83 |
139 |
0.00 |
0.12 |
3.15 |
16 |
|
Year
ended 12/31/20 |
11.60 |
0.45 |
(0.20
) |
0.25 |
(0.49
) |
(0.00
) |
(0.49
) |
11.36 |
2.50 |
10 |
0.00 |
0.14 |
3.90 |
66 |
|
Year
ended 12/31/19 |
10.77 |
0.53 |
1.09 |
1.62 |
(0.55
) |
(0.24
) |
(0.79
) |
11.60 |
15.37 |
187 |
0.00 |
0.13 |
4.53 |
14 |
|
| ||||||||||||||
|
(a) |
Calculated
using average shares outstanding. |
|
(b) |
Includes
adjustments in accordance with accounting principles generally accepted in
the United States of America and as such, the net asset value for
financial reporting purposes and the returns
based
upon those net asset values may differ from the net asset value and
returns for shareholder transactions. Does not include sales charges and
is not annualized for periods less than one
year,
if applicable. |
|
(c) |
In
addition to the fees and expenses which the Fund bears directly; the Fund
indirectly bears a pro rata share of the fees and expenses of the
underlying funds in which the Fund invests. Because
the
underlying funds have varied expenses and fee levels and the Fund may own
different proportions at different times, the amount of fees and expenses
incurred indirectly by the Fund will vary.
Estimated
underlying fund expenses are not expenses that are incurred directly by
your Fund. They are expenses that are incurred directly by the underlying
funds and are deducted from the value
of
the funds your Fund invests in. The effect of the estimated underlying
fund expenses that you bear indirectly is included in your Fund’s total
return. Estimated acquired fund fees from underlying
funds
were 0.46%, 0.45%, 0.45%, 0.51% and 0.52% for the years ended December 31,
2023, 2022, 2021, 2020 and 2019, respectively. |
|
(d) |
Portfolio
turnover is calculated at the fund level and is not annualized for periods
less than one year, if
applicable. |
19 Invesco
Income Allocation Fund
Hypothetical Investment and Expense Information
In connection
with the final settlement reached between Invesco and certain of its affiliates
with certain regulators, including the New York Attorney General’s Office, the
SEC and the Colorado Attorney General’s Office (the settlement) arising out of
certain market timing and unfair pricing allegations made against Invesco and
certain of its affiliates, Invesco and certain of its affiliates agreed, among
other things, to disclose certain hypothetical information regarding investment
and expense information to Fund shareholders. The chart below is intended to
reflect the annual and cumulative impact of the Fund’s expenses, including
investment advisory fees and other Fund costs, on the Fund’s returns over a
10-year period. The example reflects the following:
■
You invest
$10,000 in the Fund and hold it for the entire 10-year period;
■
Your
investment has a 5% return before expenses each year;
■
The Fund’s
current annual expense ratio includes, if applicable, any contractual fee waiver
or expense reimbursement that would apply for the period for which it was
committed;
■
Hypotheticals
both with and without any applicable initial sales charge applied;
and
■
There is no
sales charge on reinvested dividends.
There
is no assurance that the annual expense ratio will be the expense ratio for the
Fund’s classes for any of the years shown. This is only a hypothetical
presentation made to illustrate what expenses and returns would be under the
above scenarios; your actual returns and expenses are likely to differ (higher
or lower) from those shown below.
|
Class
A
(Includes
Maximum Sales
Charge) |
Year
1 |
Year
2 |
Year
3 |
Year
4 |
Year
5 |
Year
6 |
Year
7 |
Year
8 |
Year
9 |
Year
10 |
|
Annual
Expense Ratio1 |
0.89% |
0.89% |
0.89% |
0.89% |
0.89% |
0.89% |
0.89% |
0.89% |
0.89% |
0.89% |
|
Cumulative
Return Before Expenses |
5.00% |
10.25% |
15.76% |
21.55% |
27.63% |
34.01% |
40.71% |
47.75% |
55.14% |
62.90% |
|
Cumulative
Return After Expenses |
(1.62)% |
2.42% |
6.63% |
11.01% |
15.57% |
20.32% |
25.27% |
30.42% |
35.78% |
41.36% |
|
End
of Year Balance |
$9,838.40 |
$10,242.76 |
$10,663.74 |
$11,102.02 |
$11,558.31 |
$12,033.36 |
$12,527.93 |
$13,042.83 |
$13,578.89 |
$14,136.98 |
|
Estimated
Annual Expenses |
$635.83 |
$89.36 |
$93.03 |
$96.86 |
$100.84 |
$104.98 |
$109.30 |
$113.79 |
$118.47 |
$123.34 |
|
| ||||||||||
|
Class
A (Without Maximum Sales
Charge) |
Year
1 |
Year
2 |
Year
3 |
Year
4 |
Year
5 |
Year
6 |
Year
7 |
Year
8 |
Year
9 |
Year
10 |
|
Annual
Expense Ratio1 |
0.89% |
0.89% |
0.89% |
0.89% |
0.89% |
0.89% |
0.89% |
0.89% |
0.89% |
0.89% |
|
Cumulative
Return Before Expenses |
5.00% |
10.25% |
15.76% |
21.55% |
27.63% |
34.01% |
40.71% |
47.75% |
55.14% |
62.90% |
|
Cumulative
Return After Expenses |
4.11% |
8.39% |
12.84% |
17.48% |
22.31% |
27.34% |
32.57% |
38.02% |
43.69% |
49.60% |
|
End
of Year Balance |
$10,411.00 |
$10,838.89 |
$11,284.37 |
$11,748.16 |
$12,231.01 |
$12,733.70 |
$13,257.06 |
$13,801.93 |
$14,369.19 |
$14,959.76 |
|
Estimated
Annual Expenses |
$90.83 |
$94.56 |
$98.45 |
$102.49 |
$106.71 |
$111.09 |
$115.66 |
$120.41 |
$125.36 |
$130.51 |
|
| ||||||||||
|
Class
C2 |
Year
1 |
Year
2 |
Year
3 |
Year
4 |
Year
5 |
Year
6 |
Year
7 |
Year
8 |
Year
9 |
Year
10 |
|
Annual
Expense Ratio1 |
1.64% |
1.64% |
1.64% |
1.64% |
1.64% |
1.64% |
1.64% |
1.64% |
0.89% |
0.89% |
|
Cumulative
Return Before Expenses |
5.00% |
10.25% |
15.76% |
21.55% |
27.63% |
34.01% |
40.71% |
47.75% |
55.14% |
62.90% |
|
Cumulative
Return After Expenses |
3.36% |
6.83% |
10.42% |
14.13% |
17.96% |
21.92% |
26.02% |
30.25% |
35.60% |
41.17% |
|
End
of Year Balance |
$10,336.00 |
$10,683.29 |
$11,042.25 |
$11,413.27 |
$11,796.76 |
$12,193.13 |
$12,602.82 |
$13,026.27 |
$13,561.65 |
$14,119.03 |
|
Estimated
Annual Expenses |
$166.76 |
$172.36 |
$178.15 |
$184.14 |
$190.32 |
$196.72 |
$203.33 |
$210.16 |
$118.32 |
$123.18 |
|
| ||||||||||
|
Class
R |
Year
1 |
Year
2 |
Year
3 |
Year
4 |
Year
5 |
Year
6 |
Year
7 |
Year
8 |
Year
9 |
Year
10 |
|
Annual
Expense Ratio1 |
1.14% |
1.14% |
1.14% |
1.14% |
1.14% |
1.14% |
1.14% |
1.14% |
1.14% |
1.14% |
|
Cumulative
Return Before Expenses |
5.00% |
10.25% |
15.76% |
21.55% |
27.63% |
34.01% |
40.71% |
47.75% |
55.14% |
62.90% |
|
Cumulative
Return After Expenses |
3.86% |
7.87% |
12.03% |
16.35% |
20.84% |
25.50% |
30.34% |
35.37% |
40.60% |
46.03% |
|
End
of Year Balance |
$10,386.00 |
$10,786.90 |
$11,203.27 |
$11,635.72 |
$12,084.86 |
$12,551.34 |
$13,035.82 |
$13,539.00 |
$14,061.61 |
$14,604.39 |
|
Estimated
Annual Expenses |
$116.20 |
$120.69 |
$125.34 |
$130.18 |
$135.21 |
$140.43 |
$145.85 |
$151.48 |
$157.32 |
$163.40 |
|
| ||||||||||
|
Class
Y |
Year
1 |
Year
2 |
Year
3 |
Year
4 |
Year
5 |
Year
6 |
Year
7 |
Year
8 |
Year
9 |
Year
10 |
|
Annual
Expense Ratio1 |
0.64% |
0.64% |
0.64% |
0.64% |
0.64% |
0.64% |
0.64% |
0.64% |
0.64% |
0.64% |
|
Cumulative
Return Before Expenses |
5.00% |
10.25% |
15.76% |
21.55% |
27.63% |
34.01% |
40.71% |
47.75% |
55.14% |
62.90% |
|
Cumulative
Return After Expenses |
4.36% |
8.91% |
13.66% |
18.62% |
23.79% |
29.19% |
34.82% |
40.70% |
46.83% |
53.23% |
|
End
of Year Balance |
$10,436.00 |
$10,891.01 |
$11,365.86 |
$11,861.41 |
$12,378.57 |
$12,918.28 |
$13,481.52 |
$14,069.31 |
$14,682.73 |
$15,322.90 |
|
Estimated
Annual Expenses |
$65.40 |
$68.25 |
$71.22 |
$74.33 |
$77.57 |
$80.95 |
$84.48 |
$88.16 |
$92.01 |
$96.02 |
|
| ||||||||||
|
Class
R5 |
Year
1 |
Year
2 |
Year
3 |
Year
4 |
Year
5 |
Year
6 |
Year
7 |
Year
8 |
Year
9 |
Year
10 |
|
Annual
Expense Ratio1 |
0.62% |
0.62% |
0.62% |
0.62% |
0.62% |
0.62% |
0.62% |
0.62% |
0.62% |
0.62% |
|
Cumulative
Return Before Expenses |
5.00% |
10.25% |
15.76% |
21.55% |
27.63% |
34.01% |
40.71% |
47.75% |
55.14% |
62.90% |
|
Cumulative
Return After Expenses |
4.38% |
8.95% |
13.72% |
18.70% |
23.90% |
29.33% |
34.99% |
40.90% |
47.07% |
53.51% |
|
End
of Year Balance |
$10,438.00 |
$10,895.18 |
$11,372.39 |
$11,870.50 |
$12,390.43 |
$12,933.13 |
$13,499.60 |
$14,090.88 |
$14,708.06 |
$15,352.27 |
|
Estimated
Annual Expenses |
$63.36 |
$66.13 |
$69.03 |
$72.05 |
$75.21 |
$78.50 |
$81.94 |
$85.53 |
$89.28 |
$93.19 |
|
| ||||||||||
|
Class
R6 |
Year
1 |
Year
2 |
Year
3 |
Year
4 |
Year
5 |
Year
6 |
Year
7 |
Year
8 |
Year
9 |
Year
10 |
|
Annual
Expense Ratio1 |
0.56% |
0.56% |
0.56% |
0.56% |
0.56% |
0.56% |
0.56% |
0.56% |
0.56% |
0.56% |
|
Cumulative
Return Before Expenses |
5.00% |
10.25% |
15.76% |
21.55% |
27.63% |
34.01% |
40.71% |
47.75% |
55.14% |
62.90% |
|
Cumulative
Return After Expenses |
4.44% |
9.08% |
13.92% |
18.98% |
24.26% |
29.78% |
35.54% |
41.56% |
47.85% |
54.41% |
|
End
of Year Balance |
$10,444.00 |
$10,907.71 |
$11,392.01 |
$11,897.82 |
$12,426.08 |
$12,977.80 |
$13,554.01 |
$14,155.81 |
$14,784.33 |
$15,440.75 |
|
Estimated
Annual Expenses |
$57.24 |
$59.78 |
$62.44 |
$65.21 |
$68.11 |
$71.13 |
$74.29 |
$77.59 |
$81.03 |
$84.63 |
|
| ||||||||||
|
|
|
|
1 |
Your
actual expenses may be higher or lower than those
shown. |
|
2 |
The
hypothetical assumes you hold your investment for a full 10 years.
Therefore, any applicable deferred sales charge that might apply in year
one for Class C has not been
deducted. |
20 Invesco
Income Allocation Fund
Shareholder Account Information
In addition
to the Fund(s), the Adviser serves as investment adviser to many other Invesco
mutual funds that are offered to investors (Invesco Funds or Funds). The
following information is about the Invesco Funds and their share classes that
have different fees and expenses. Certain Invesco Funds have their
own
“Shareholder
Account Information Section”
that should
be consulted for specific information related to those Funds.
Some
investments in the Funds are made through accounts that are maintained by
intermediaries (and not in the name of an individual investor) and some
investments are made indirectly through products that use the Funds as
underlying investments, such as Retirement and Benefit Plans, funds of funds,
qualified tuition plans, and variable insurance contracts (these products are
generally referred to as conduit investment vehicles). If shares of the Funds
are held in an account maintained by an intermediary or in the name of a conduit
investment vehicle (and not in the name of an individual investor), the
intermediary or conduit investment vehicle may impose rules that differ from,
and/or charge a transaction or other fee in addition to, those described in this
prospectus. As a result, the availability of certain share classes and/or
shareholder privileges or services described in this prospectus will depend on
the policies, procedures and trading platforms of the financial intermediary or
conduit investment vehicle. Accordingly, through your financial intermediary you
may be invested in a share class that is subject to higher annual fees and
expenses than other share classes that are offered in this prospectus. Investing
in a share class subject to higher annual fees and expenses may have an adverse
impact on your investment return. Please consult your financial adviser to
consider your options, including your eligibility to qualify for the share
classes and/or shareholder privileges or services described in this
prospectus.
The
Fund is not responsible for any additional share class eligibility requirements,
investment minimums, exchange privileges, or other policies imposed by financial
intermediaries or for notifying shareholders of any changes to them. Please
consult your financial adviser or other financial intermediary for
details.
Unless
otherwise provided, the following are certain defined terms used throughout
this prospectus:
■
Employer
Sponsored Retirement and Benefit Plans include (i) employer sponsored pension or
profit sharing plans that qualify under section
401(a) of the
Internal Revenue Code of 1986, as amended (the Code), including 401(k), money
purchase pension, profit sharing and defined benefit plans; (ii) 403(b) and
non-qualified deferred compensation arrangements that operate similar to plans
described under (i) above, such as 457 plans and executive deferred compensation
arrangements; (iii) health savings accounts maintained pursuant to Section 223
of the Code; and (iv) voluntary employees’ beneficiary arrangements
maintained pursuant to Section 501(c)(9) of the Code.
■
Individual
Retirement Accounts (IRAs) include Traditional and Roth IRAs.
■
Employer
Sponsored IRAs include Simplified Employee Pension (SEP), Salary Reduction
Simplified Employee Pension (SAR-SEP), and Savings Incentive Match Plan for
Employees of Small Employers (SIMPLE) IRAs.
■
Retirement
and Benefit Plans include Employer Sponsored Retirement and Benefit Plans, IRAs
and Employer Sponsored IRAs.
Shareholder
Account Information and additional information is available on the
Internet at www.invesco.com/us. To access your account, go to the tab for
“Account & Services,” then click on “Accounts Overview.” For additional
information about Invesco Funds, consult the Fund’s prospectus and SAI, which
are available on that same website or upon request free of charge. The website
is not part of this prospectus.
Choosing
a Share Class
Each Fund may
offer multiple classes of shares and not all Funds offer all share classes
discussed herein. Each class represents an interest in the same portfolio of
investments. Certain classes have higher expenses than other classes which may
lower the return on your investment when compared to a less expensive class. In
deciding which class of shares to purchase, you should consider the following
attributes of the various share classes, among other things: (i) the
eligibility requirements that apply to purchases of a particular class and any
eligibility requirements of your financial intermediary, (ii) the initial
sales charges and contingent deferred sales charges (CDSCs), if any, applicable
to the class, (iii) the 12b-1 fee, if any, paid by the class, and
(iv) any services you may receive from a financial intermediary. Please
contact your financial adviser to assist you in making your decision. Please
refer to the prospectus fee table for more information on the fees and expenses
of a particular Fund’s share classes.
|
Share
Classes |
|
|
|
|
|
Class
A |
Class
C |
Class
R |
Class
Y |
Class
R5 and R6 |
|
▪ Initial
sales charge which may be
waived
or reduced1
|
▪ No
initial sales charge |
▪ No
initial sales charge |
▪ No
initial sales charge |
▪ No
initial sales charge |
|
▪ CDSC
on certain redemptions1
|
▪ CDSC
on redemptions within one
year
if a commission has been paid |
▪ No
CDSC |
▪ No
CDSC |
▪ No
CDSC |
|
▪ 12b-1
fee of up to 0.25%2
|
▪ 12b-1
fee of up to 1.00%3
|
▪ 12b-1
fee of up to 0.50% |
▪ No
12b-1 fee |
▪ No
12b-1 fee |
|
|
▪ Investors
may only open an
account
to purchase Class C
shares
if they have appointed a
financial
intermediary that allows
for
new accounts in Class C shares
to
be opened. This restriction does
not
apply to Employer Sponsored
Retirement
and Benefit Plans. |
▪ Does
not convert to Class A shares |
▪ Does
not convert to Class A shares |
▪ Does
not convert to Class A
shares |
A-1 The
Invesco Funds
MCF—04/24